The White House on Thursday nominated Christy Goldsmith Romero to replace Martin Gruenberg as chair of the Federal Deposit Insurance Corp.
Goldsmith Romero has been a commissioner with the Commodity Futures Trading Commission since March 2022. Prior to that, she spent a dozen years at the Treasury Department, including as the special inspector general for the Troubled Asset Relief Program, according to a release from the White House. She’s also served in various roles at the Securities and Exchange Commission.
Gruenberg has faced calls for his resignation – largely from Republicans, but also from key Democrats such as Sen. Sherrod Brown, D-OH – since law firm Cleary Gottlieb released its report last month detailing an environment rife with sexual harassment and discrimination at the FDIC.
Allegations that the FDIC tolerated toxic culture and ongoing misconduct have nagged the agency for years but intensified in November, after The Wall Street Journal published an exposé with interviews from dozens of employees. Cleary Gottlieb’s report landed about a week before Gruenberg testified during semiannual hearings that were intended to focus on the agency’s work.
Gruenberg said last month he would resign as chair of the agency once a successor is confirmed, which would preserve the FDIC’s Democratic majority and potentially pave the way for passage of a contentious capital requirements revamp.
Goldsmith Romero has twice received unanimous Senate confirmation for past roles, potentially upping her chances of receiving Senate confirmation for the FDIC seat. That was a factor in Biden choosing her to replace Gruenberg, CNN reported, citing an unnamed source. Senators on both sides of the aisle were informed of Biden’s intention to nominate her prior to the White House announcement, CNN reported.
In a statement Thursday, Brown said Goldsmith Romero “has proven herself to be a strong, independent, and fair regulator who is not afraid to do what’s right. I call on the entire Banking and Housing Committee, Senate leadership, and the full Senate to move quickly to bring new leadership to the FDIC at this challenging time.”
Goldsmith Romero must be ready “to hit the ground running” when it comes to acting on Cleary Gottlieb’s recommendations regarding the FDIC’s culture, House Financial Services Committee Chairman Patrick McHenry, R-NC, said in a Thursday statement.
“If confirmed, Christy Goldsmith Romero must immediately begin taking steps to reverse the toxic culture overseen by Gruenberg to rebuild trust between FDIC employees and management,” McHenry said in the statement. “The Senate must move forward with confirmation proceedings expeditiously to curtail Chair Gruenberg’s ability to further damage the agency and endanger financial stability.”
Rather than elevate someone within the FDIC, Goldsmith Romero was chosen because she’s viewed as someone with a clean slate who could overhaul the agency’s culture, CNN reported, citing an unnamed source.
In the aftermath of the 2008 financial crisis, Goldsmith Romero helped bring down the hammer on Wall Street, noted Sen. Elizabeth Warren, D-MA, who called Goldsmith Romero a “strong manager.”
“The bankers may not love her; you might want to check out how many she put in jail,” Warren told reporters, according to Politico. “But she has the kind of independence that we want.”
While Goldsmith Romero served as the special inspector general for TARP, criminal charges were brought against more than 400 people in the financial industry, 2017 report to Congress revealed; that included 55 bankers, one trader and 68 bank borrowers, The Hill reported. At the CFTC, she has often called for a more aggressive approach to supervising Wall Street, clashing with Chair Rostin Behnam on occasion, Politico reported.
Other Democrats on the Senate Banking Committee – Sens. John Fetterman of Pennsylvania, Mark Warner of Virginia and Chris Van Hollen of Maryland – indicated likely support for Goldsmith Romero’s nomination, Politico reported.
On the other side of the aisle, Sen. Tim Scott, R-SC, said he would evaluate Goldsmith Romero’s nomination “to ensure she has the qualities necessary to support employees, lead the FDIC through the changes it desperately needs, and return credibility to the independent agency,” Politico reported.
Given the Senate’s recess during the month of August, Democrats may face time constraints in moving ahead with Goldsmith Romero’s nomination.
Former FDIC Chair Sheila Bair, in a post on social media site X, said she hopes to see Goldsmith Romero “swiftly” confirmed, calling her a “strong, nonpartisan candidate” and “an experienced regulator with extensive management experience and deep understanding of bank supervision.”
