May 23, 2022

Volume XII, Number 143

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May 20, 2022

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FDIC Chair Blocks Majority Vote to Begin Review of Bank Merger Act Rules

Rohit Chopra, in his dual roles as CFPB Director and FDIC Board Member, criticized FDIC Chair Jelena McWilliams for preventing an FDIC Board vote to publish a Request for Information ("RFI") on the FDIC's Bank Merger Act regulations, even though the Request had support from a majority of the FDIC Board.

In his public statement, Mr. Chopra recounted that he and the two other FDIC Board members (Martin Gruenberg and Michael Hsu) drafted a RFI to assess potential revisions to the Bank Merger Act and its implementing rules in response to an Executive Order to review the Bank Merger Act’s impact on competition. According to Mr. Chopra, multiple attempts to have the draft reviewed by relevant FDIC staff were stymied. Mr. Chopra previously attempted to proceed with the RFI through a notation vote that Chair McWilliams said was invalid. Mr. Chopra then moved for a vote to publish the Request for Information at the FDIC’s board meeting on December 14.

After Mr. Chopra moved for a resolution to publish the RFI, Ms. McWilliams declined to open the matter for discussion. According to Mr. Chopra, the FDIC General Counsel "asserted, without any legal justification, that the vote of the supermajority of the Board was invalid." Mr. Chopra also stated that the General Counsel declared the FDIC Chair had implicit veto power over the Board's votes, which Mr. Chopra claimed had no legal basis. His statement concluded with a call for swift resolution of the issue, and an affirmation that a majority of the Board could not be overruled by the Chair.

FDIC Board Member and Acting Comptroller of the Currency Michael Hsu also issued a statement following the vote. He emphasized his support for the measure and expressed concern that the procedural and legal issues might hinder the FDIC's ability to ensure financial stability. He also affirmed that a Board majority should steer the FDIC's agenda.

© Copyright 2022 Cadwalader, Wickersham & Taft LLPNational Law Review, Volume XI, Number 349
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