Three nominees for the board of the federal insurer of bank deposits – including those for chairman and vice chairman – offered their views to a Senate committee Wednesday as their nominations are considered for confirmation.
Martin Gruenberg, nominee for chairman of the Federal Deposit Insurance Corp. (FDIC), now the acting chairman of the board, Travis Hill, nominee for vice chairman of the agency board, and Jonathan McKernan, nominee to be a member of the board, all appeared before the Senate Banking Committee.
Gruenberg, who has served as acting chairman since February (and has also served past terms as both chairman and vice chairman of the board during his time on the board, which began in 2005), repeated several key policy priorities for the agency that he made to the panel two weeks ago. He said those were priorities for the rest of this year and 2023 were: a strong Deposit Insurance Fund, strengthening the Community Reinvestment Act (CRA), addressing the financial risks of climate change, reviewing the bank merger process, evaluating the risks of crypto-assets to the banking system, and finalizing the Basel III capital rules.
The chairman nominee also said the banking industry is in a position of significant strength despite the current economic uncertainty. He said banks are experiencing strong loan growth and continued good asset quality measures and remain well-capitalized and highly liquid. However, he said banking continues to face significant downside risks from inflation, rising market interest rates, and geopolitical uncertainty.
“Taken together, these risks may reduce profitability, weaken credit quality and capital, and limit loan growth in coming quarters. These will be matters of ongoing supervisory attention by the FDIC for the near-term,” Gruenberg said.
If confirmed, Gruenberg would serve a five-year term; he was nominated by Biden Nov. 14.
Hill and McKernan were nominated by President Joe Biden on Sept. 22. Hill takes the vice chairman’s seat that was last filled by Thomas Hoenig, who resigned in 2018. The post has been empty since then. McKernan was nominated to fill the remaining time of the term of former Chairman Jelena McWillams, who resigned in early 2022. That term expires May 31, 2024.
According to a White House-released bio, Hill worked at the FDIC from 2018 to 2022, serving as senior advisor to the chairman and deputy to the chairman for policy (primarily for former Chairman McWilliams). Previously, he served as senior counsel at the Senate Banking Committee from 2013 to 2018. He received a Bachelor of Science from Duke University, where he studied economics and political science, and a Juris Doctor from Georgetown University Law Center.
The White House said McKernan is a senior counsel at the Federal Housing Finance Agency (FHFA), but has been on detail from FHFA to the Senate Banking Committee where he is a counsel on the committee’s Republican minority staff. He also previously served as a senior policy advisor at the Treasury Department and to former Sen. Bob Corker (R-Tenn.). McKernan was also a banking lawyer at Wilmer Cutler Pickering Hale and Dorr LLP and Hogan Lovells US LLP. McKernan received a Juris Doctor with high honors from the Duke University School of Law and undergraduate and graduate degrees in Economics from the University of Tennessee, where he graduated summa cum laude.
Both Hill and McKernan are Republican nominees.