Crapo, Colleagues Introduce Legislation to Preserve FDIC Independence

Washington, D.C.--U.S. Senator Mike Crapo (R-Idaho) is joining U.S. Senators Tim Scott (R-South Carolina), Pat Toomey (R-Pennsylvania) and six additional colleagues in introducing legislation to reform the governance of the Federal Deposit Insurance Corporation (FDIC).  The bill is designed to better insulate the agency from political interference and preserve its independence.

The FDIC Board Governance Reform Act would remove the director of the Consumer Financial Protection Bureau (CFPB) and Comptroller of the Currency as permanent members of the FDIC Board of Directors and replace those seats with two presidentially-appointed, Senate-confirmed board members.  The bill would also establish lifetime service limits for FDIC board members and place clear boundaries on how long a board member may continue to serve after their Senate-confirmed term has expired.  

“Recent actions to undercut the integrity of the FDIC Board were illegitimate,” said Crapo.  “The FDIC plays a critical role in ensuring the safety and soundness of the financial system and these actions were harmful and counter-productive.  This legislation will preserve the FDIC’s storied history as an independent federal bank regulator.” 

Additional co-sponsors of the FDIC Board Governance Reform Act include Senators Ted Cruz (R-Texas), Cynthia Lummis (R-Wyoming), Bill Hagerty (R-Tennessee), Thom Tillis (R-North Carolina.), Kevin Cramer (R-North Dakota) and Jerry Moran (R-Kansas).

Full bill text is available here. 

Background: 

• The FDIC Board Governance Reform Act amends the Federal Deposit Insurance Act to remove the comptroller of the currency and CFPB director as ex officio members of the FDIC Board of Directors.
• Under the new legislation, the president would appoint all five board members, with the advice and consent of the Senate. The comptroller of the currency and CFPB director are explicitly ineligible to be appointed by the president as board members.
• The bill also limits board members from serving more than 12 years total, not including in holdover status following the expiration of the appointed term.
• Further, it limits the period a board member may serve in holdover status to the earlier of:
  • the appointment of a successor on the board; or
  • the end of the next session of Congress following the expiration of the board member’s appointed term. 

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