Martin J. Gruenberg To Be Nominated By Obama For FDIC Chairman
WASHINGTON -- President Barack Obama said Friday that he will nominate Martin J. Gruenberg to become chairman of the Federal Deposit Insurance Corp.
Gruenberg would succeed Sheila Bair, who plans to end her five-year term as one of the nation's top banking regulators on July 8. Bair was a holdover from the Bush administration and one of several regulators who helped shape the federal response to the 2008 financial crisis.
Gruenberg's nomination will require Senate confirmation.
A longtime Democratic Senate staff member, he has been No. 2 at the FDIC since August 2005. The independent regulatory agency is charged with maintaining public confidence in the banking system. It guarantees bank deposits up to $250,000.
Senate Banking Committee Chairman Tim Johnson, D-S.D., pledged quick action on the nomination.
"It is vital that we have strong leaders in place at our financial regulators as we continue the economic recovery," Johnson said.
Gruenberg's nomination is the first of several vacancies at financial regulatory agencies that Obama must fill.
The Office of the Comptroller of the Currency, which oversees most of the nation's large banks, has been without a permanent leader since John C. Dugan completed a five-year term last August. The Federal Reserve's Board of Governors has two openings and there's a vacancy atop the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, the government-run housing agencies.
Positions created by a new financial regulatory law also remain unfilled, including a Fed vice chairman for supervision, someone to run a new Office of Financial Research and an insurance oversight position.
The new Consumer Financial Protection Bureau, created by the financial overhaul law, also needs someone to run it.
Obama named consumer advocate Elizabeth Warren to create the bureau, which is supposed to open in July, but it will not become a full-fledged, empowered agency until a director is in place.
Warren's supporters want her to become the director, but she has many critics in the Senate and is unlikely to be confirmed. Senate Republicans have also promised to block a vote on any nominee to run the bureau until Democrats agree to reduce its powers.
Bair, appointed by President George W. Bush in 2006, was among the first officials to warn about the explosion of high-risk lending to borrowers with bad credit and the agency closed the most banks under her tenure since the savings and loan crisis of the 1980s and 1990s.
She also spoke up for consumers and small banks during the 2008 financial crisis, when most other regulators focused mostly on helping big Wall Street firms. After the housing bubble burst, she argued unsuccessfully for the government to force banks to reduce monthly payments for troubled homeowners facing foreclosure.
Most notably, she clashed with Treasury Secretary Timothy Geithner over a range of issues related to the Wall Street bailouts.