16 05, 2024


2024-05-16T15:43:29-04:00May 16th, 2024|5- Client Report|

Gruenberg Stands His Ground

Faring somewhat better than he did yesterday (see Client Report REFORM232), FDIC Chair Gruenberg weathered repeated calls from Democrats to reform the agency’s culture without being subjected to direct demands that he resign.  That said, Ranking Member Scott (R-SC) called for a separate hearing on the Cleary report; he will not get one in the Senate, but this request suggests the one HFSC Chair McHenry (R-NC) mentioned yesterday may well be in the works.  If it is, then this may prove challenging to Mr. Gruenberg, who otherwise seems unwilling to resign and is not yet facing dismissal from the White House.  Senate Banking Republicans were as scathing as their House counterparts, with Sen. Kennedy (R-LA) comparing Mr. Gruenberg’s efforts to fix the FDIC to “asking Alec Baldwin to conduct a course in gun safety.” Sen. Warnock (D-GA) asked for and received a commitment for a ninety-day progress report on FDIC reform.  Acting Comptroller Hsu also took tough questioning today from Republicans such as Sen. Britt (R-AL), although he does not face demands for resignation.  Chair Brown (D-OH) also pressed Vice Chair Barr to join the FDIC and FRB in issuing a formal merger policy, but Mr. Barr again demurred, saying that the FRB is working with the OCC, FDIC, and DOJ on an inter-agency effort Mr. Hsu also acknowledged under questioning.   Mr. Barr also acknowledged the need to issue an incentive-compensation rule but declined to say if the FRB might join the FDIC and …

15 05, 2024


2024-05-15T16:50:27-04:00May 15th, 2024|5- Client Report|

Gruenberg Grilled on Both Sides

Democrats today were surprisingly scathing about FDIC Chair Gruenberg’s continued service, with Reps. Pressley (D-MA), Velázquez (D-NY), and Foster (D-IL) making clear they had lost confidence in him.  Ranking Member Waters (D-CA) tried to pin the blame at least as much on Mr. Gruenberg’s predecessors, but Rep. Meeks (D-NY) and others were more focused on Mr. Gruenberg, with Rep. Garcia (D-TX) getting him to agree to anger management training.  Republicans were united in blistering statements, with HFSC Chair McHenry (R-NC) closing the hearing by saying that he might convene another hearing solely on the FDIC chair given Democratic concerns about the need to focus more on the FDIC than possible given the overall regulatory agenda.  One major focus nonetheless was of course on the end-game rules, with Republicans trying to get FRB Vice Chair Barr to agree that the rule needs to be re-proposed given plans for material changes.  Mr. Barr refused to do so or to say when the QIS will be released beyond indicating that it should be in the near term.  Mr. Barr also would not outline his view on the new incentive-compensation proposal (see FSM Report COMPENSATION38) when pressed to do so by Rep. Velázquez.  We will defer a forecast of how Mr. Gruenberg is likely to fare until after tomorrow’s Sente Banking hearing, which will surely be as tough and may perhaps indicate additional sentiment that Mr. Gruenberg resign.  Should he continue to refuse to do so as …

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