Letters to the Administration: Letter in Support of the Majority on the FDIC Board

View or download a PDF of the letter here.

Dec. 16, 2021 

The Honorable Joseph Biden
1600 Pennsylvania Ave, NW
Washington, DC, 20500 

Dear President Biden,  

The undersigned express our support for efforts by the majority of the board of the Federal Deposit  Insurance Corp (FDIC) to govern the agency lawfully, according to its statute and bylaws, and we  condemn Chair Jelena McWilliams’s lawless attempts to override them and control the agency on her  own.  

At immediate issue is a Request for Information (RFI) regarding bank mergers approved by a majority of  the board. Chair McWilliams has blocked publication of this RFI in the Federal Register. If Chair  McWilliams refuses to submit to lawful governance by a majority of the FDIC Board, you should not  hesitate to remove her from office. There is an open legal question whether FDIC Board members are  removable at will or only for cause, but McWilliams’s conduct—openly flouting and attempting to  subvert lawful decisions by the majority of the FDIC Board—satisfies even the higher standard. 

The FDIC board is statutorily composed of five members, four of which are currently occupied.  On December 9, 2021, the majority of the Board approved the RFI regarding agency’s policy on bank  mergers. According to public reports, approval of this request began Nov. 23, 2021, with a “circulation of  written items,” (or a “notational” vote) as provided by the FDIC’s bylaws, and closed Dec. 7, 2021.1 Board members Rohit Chopra and Martin Gruenberg issued a joint statement announcing the RFI in the  afternoon of Dec. 9.2 Subsequently, a statement was posted on the FDIC website disclaiming the RFI on  the basis that it was not “approved by the FDIC” and “there was no valid vote by the Board.” 3 Public  reports also state that McWilliams has stopped FDIC staff from transmitting the RFI for official  publication. 

The Federal Deposit Insurance Act (FDI Act) vests FDIC authority in the Board. The FDIC’s bylaws, in  turn, state that a majority of the Board controls the agency’s actions. Specifically, the bylaws state: “The  management of the Corporation shall be vested in a Board of Directors consisting of 5 members.” Further,  Section 5 of Article IV of the FDIC’s bylaws establishes that a majority vote of the Board “shall be the  act of the Board of Directors.” Since the bylaws state that the “the management of the Corporation shall  be vested in the Board of Directors,” this means not only that the adoption of the RFI conformed with the  bylaws, but also that the statement issued under the banner of the FDIC declaring the RFI void was  illegitimate and in violation of the bylaws. 

Chair McWilliams has demonstrated that she is not fit to serve in this important role. Commandeering the  moniker of the FDIC to voice her minority opinion and attempting to block the legal actions of the majority of the board constitute grave misconduct. We respectfully call on you, Mr. President, to  remove the chair if she does not quickly relent.”