The Federal Deposit Insurance Corp. rebuked two Democratic members of its board on Thursday after they said the agency would seek public comment regarding its regulation of bank mergers.
The announcement by Consumer Financial Protection Bureau Director Rohit Chopra and former FDIC Chair Martin Gruenberg, who both sit on the board, was quickly followed by a denial from the FDIC.
“The FDIC has longstanding internal policies and procedures for circulating and conducting votes of its board of directors, and for issuing documents for publication in the Federal Register,” it said. “In this case, there was no valid vote by the board, and no such request for information and comment has been approved by the agency for publication in the Federal Register.”
The FDIC is chaired by Jelena McWilliams, a Republican and former bank executive appointed by former President Trump in 2018. The other three board members are Democrats, with one seat currently vacant.
According to The Hill, Chopra and Gruenberg’s move indicated “a remarkable breakdown in trust among leaders of the bank regulator. While members of the FDIC board have often sparred over regulatory proposals, agency officials said Thursday that the release of one on behalf of the agency outside of the formal process is unprecedented.”
In a statement on the CFPB website, Chopra and Gruenberg said the board had “approved a request for information and comment on rules, regulations, guidance, and statements of policy regarding bank merger transactions.”
“This marks the beginning of a careful review of the effectiveness of the existing regulatory framework in meeting the requirements of the Bank Merger Act,” they said.
Chopra also wrote on the CFPB blog that “Under the federal banking laws, a bank’s ability to merge with or acquire another bank is a privilege, not a right. There are a host of questions where we need input from the public to determine how to implement existing law more effectively to ensure that families and small businesses benefit from a competitive market.”
The White House has made a priority of beefing up bank merger oversight but the FDIC’s chair historically controls the board agenda.