FDIC chair quits following claims of Democrats' “hostile takeover” attempt

Federal Deposit Insurance Corp. chairperson Jelena McWilliams on Friday submitted her resignation, weeks after she described a dispute with Democrats leading the independent agency as a “hostile takeover” attempt.

Why it matters: President Biden will be able to select a replacement for the Trump-appointed McWilliams, whose term was not meant to end until June 2023. The agency provides deposit insurance for all U.S. banks and is one of three federal regulators overseeing the U.S. banking system.

Context: The three-member Democratic majority voted in December to accept public feedback on any changes to the FDIC's bank merger approval process.

• McWilliams rejected an attempt by Consumer Financial Protection Bureau Director Rohit Chopra, who sits on the five-member FDIC board, to add a record of the vote to the FDIC’s official minutes.
• McWilliams is the only Republican on the board, which has another seat vacant. She did not participate in the vote, and the agency later released an official statement disputing the validity of the action.

Of note: McWilliams did not reference the incident in her resignation letter.

• “When I immigrated to this country 30 years ago, I did so with a firm belief in the American system of government,” wrote McWilliams, who was born in former Yugoslavia.
• “It has been a tremendous honor to serve this nation, and I did not take a single day for granted,” she added.

What's next: FDIC board member Martin Gruenberg, who has been serving on an expired term for three years, will become acting chair on Feb. 4.