Two Democrats who sit on the board of directors of the Federal Deposit Insurance Corporation (FDIC) issued an unauthorized request for information (RFI) to review the process of approving bank mergers. Director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra, and Martin Gruenberg, a member on the board and former Chairman of the FDIC, circumvented FDIC policies and procedures to pursue their own partisan agenda, and blatantly lied that the FDIC approved the RFI.
“Director Chopra and FDIC board member Gruenberg’s announcement is an illegitimate power grab by the Democrats to conduct a partisan overhaul of bank merger reviews in the United States. Their action breaks 88 years of the FDIC board deliberating and voting on proposals before final approval. This is another clear example of why bureaucracies such as the CFPB need to be held accountable,” said Grover Norquist, President of Americans for Tax Reform.
On December 9, Chopra and Gruenberg took the first step in writing new regulations to enforce the Bank Merger Act of 1960 without the formal vote needed from the FDIC board of directors. Subsequently, the FDIC issued a press release condemning the rogue RFI by stating that “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.”
This brazen action by Chopra and Gruenberg bolsters Republicans’ previous concerns about Chopra’s suitability for the directorship role at the CFPB and brings into question the existence of the CFPB. The CFPB is one of the only independent federal agencies that has a sole director appointed by the President, instead of a five-person commission, and is not held accountable to elected officials because it is funded through the Federal Reserve System instead of through Congressional appropriations.
The repercussions of enabling the CFPB to wield unprecedented statutory and regulatory power is finally coming to fruition. Chopra’s intentional disregard for FDIC Chairman Jelena McWilliams and the sanctity of the internal processes and procedures that have endured at the FDIC for nearly 90 years without disruption is an attempt to usurp another federal financial agency with his own political bias.
Gruenberg has previously been at the center of federal agency weaponization. Gruenberg was at the helm of the FDIC when the Obama administration launched threats against banks for conducting business with perfectly legitimate firms. In 2015, Gruenberg came under fire from House Republicans for the administration’s federal law enforcement program, Operation Choke Point.
Chairman Sherrod Brown (D-Ohio) of the Senate Committee on Banking, Housing, and Urban Affairs, issued a statement following the Chopra-Gruenberg announcement falsely claiming that the FDIC board voted in approval of the RFI. Brown’s statement is also a tacit endorsement of the illegitimate Chopra-Gruenberg announcement.
Chopra and Gruenberg should be held accountable for their actions. Their behavior is unacceptable and should be severely scrutinized.
Photo Credit: “Alex Holt, Rohit Chopra, Zakiya Smith” by New America is licensed under CC BY 2.0