The Fight for the FDIC
While the downfall of “Build Back Better” has been getting a lot of attention, it was not the only Washington policy drama with some surprise twists and turns last month. As progressives suffered at least temporary defeat when Senator Joe Manchin (D., W.V.) refused to endorse the massive spending bill, they ended 2021 by snagging a victory in a regulatory-turf battle. While the fight merely seemed to be concerned with technical issues of bank regulation, the consequences will be far-reaching, given that progressives are looking to ram through their desired mandates — particularly Green New Deal–style energy controls — with the instrument of financial regulation.
On New Year’s Eve Day, Jelena Obrenić McWilliams suddenly announced her intention to resign from her position as chairwoman of the Federal Deposit Insurance Commission (FDIC), even though her fixed term would not come to an end until mid 2023. In a letter to President Biden, she said that she intended to resign as of February 4, clearing the way for the president to name an acting chairman of his choosing until a nominee for the position is confirmed.
Nominated by President Trump to lead the FDIC — the agency created in the New Deal to provide deposit insurance for bank accounts, and also oversee bank regulation in conjunction with other federal agencies — McWilliams was confirmed in 2018 to a statutory five-year term by a bipartisan Senate vote of 69–24.
While McWilliams’s resignation came as a surprise, it did not arrive in a political vacuum. Since October, Democratic board members of the FDIC had been attempting to wrest control of the agency from her with unprecedented actions. When McWilliams resisted their attempted “hostile takeover of the FDIC internal processes, staff and board agenda,” as she described in a Wall Street Journal op-ed, progressive activists began fuming at her with an intensity they reserve for Republican politicians and perceived moderate Democrat turncoats like Senators Joe Manchin and Kyrsten Sinema (D., Ariz.). And even though the issue at hand concerned a seemingly technical regulatory procedure, McWilliams’s progressive critics accused her of putting the “entire Biden agenda” at risk.
McWilliams became a target of the Left, even though her biography would seem to make her an unlikely villain according to its own woke criteria. Her origin story is actually not too dissimilar from that of Saule Omarova, President Biden’s now-withdrawn nominee for comptroller of the currency, whose background as an immigrant woman in finance was touted heavily by her supporters in an effort to obscure her hard-left views. Omarova withdrew her nomination after a reported five Democratic senators found her proposals for a Federal Reserve takeover of private bank deposits and ideas for using bank regulation to bankrupt energy firms and other industries the government deems “socially suboptimal” to be just a bit too extreme.
Like the Kazakhstan native Omarova, McWilliams (nee Obrenić) also grew up in a Communist country (the former Yugoslavia), went to college in the U.S., and emigrated here during her college years. Though he did not vote to confirm McWilliams, Senate Banking Committee chairman Sherrod Brown (D., Ohio) pointed to her as an example of an immigration success story in making a comparison to Omarova. “Any American citizen who fled communist repression — whether FDIC chairwoman Jelena McWilliams or OCC nominee Saule Omarova — should be lauded for her courage and her conviction,” he proclaimed at a Senate hearing.
Read the full article at National Review.