Senate confirms new FDIC chairman amid push for bank rule rollbacks

The Senate on Thursday voted to confirm President Trump’s nominee to lead the Federal Deposit Insurance Corporation (FDIC), the last financial regulatory agency that had been led by a holdover from the Obama administration.

Jelena McWilliams, the executive vice president and chief legal officer of Fifth Third Bank, was confirmed as the next chair of the FDIC by a 69-24 vote. She will play a major role in the Trump administration’s efforts to loosen banking rules, including some controversial Dodd-Frank Act regulations.

McWilliams, a former Senate Banking Committee staffer, was approved by the panel in February with almost unanimous support. Democrats had expressed concerns about her views on the causes of the 2007-2008 financial crisis but ended up backing her confirmation overwhelmingly.

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McWilliams’ confirmation comes as the Federal Reserve and other financial regulatory agencies prepare to roll back or update a slew of banking rules. Her ascension to the FDIC chairmanship paves the way for the agency to approve changes that have been opposed by former chairman Martin Gruenberg.

The Federal Reserve is leading an interagency effort to rewrite the Volcker Rule, a provision of Dodd-Frank that bans banks from making risky bets with their own assets. Banks have long insisted that the rule was too unclear to follow and unnecessary for smaller firms with little to no risk to broader financial system.

The Fed will hold a meeting next Wednesday on its Volcker rewrite. The plan suggests that the central bank and its fellow financial regulators are about ready to officially begin the rulemaking process.

McWilliams will also weigh in on proposed changes to several Dodd-Frank capital buffers and leverage ratio requirements the Fed is seeking to loosen, and potential updates to the Community Reinvestment Act.

The Treasury Department in April released close to a dozen recommendations of ways federal regulators could update the Community Reinvestment Act (CRA) to reflect the fundamental changes in banking seen since its passage more than 40 years ago.

The 1977 law is meant to prevent mortgage discrimination and encourage banks to invest in struggling areas in which they operate. Comptroller of the Currency Joseph Otting, a former bank president, is spearheading the formal process of revamping the CRA.