Open Markets Applauds FDIC Board for Voting to Examine Bank Mergers

Entrance to The Federal Deposit Insurance Corporation in Washington DC., March 1, 2020. ©iStock.com/JHVEPhoto.

Condemns FDIC chair’s attempt to obstruct efforts to rein in Too Big to Fail banks

WASHINGTON— Yesterday, three members of the currently four-member Federal Deposit Insurance Corporation (FDIC) Board voted to carefully review the existing regulatory process for bank mergers—with input from the public. In response, FDIC Chair and former bank executive Jelena McWilliams is now attempting to illegitimately overturn the results of the vote, and block the Board majority’s efforts to mitigate risks of Too Big to Fail banks.

The authorities of the FDIC Board are exercised by the board, not the chair. Open Markets condemns this undemocratic act by Chair McWilliams, which not only violates the FDIC bylaws but also breaches a statute established by the Federal Deposit Insurance Act.

In response, Barry Lynn, executive director of the Open Markets Institute, issued the following statement:

“We strongly welcome the long-overdue action by the FDIC’s Board to review the harms caused by decades of consolidation in banking, and work to prevent Too Big to Fail banks from getting even bigger. Over the last generation, banking consolidation has caused extensive harm to the vibrancy and stability of the American economy as a whole. Any move to significantly reverse years of dangerous consolidation will be good for the public as a whole, and for entrepreneurs, working people, and families.

“It is deeply disappointing to see an unprecedented attempt by the FDIC Chair to stymie a majority vote of the FDIC Board. Congress created an FDIC board to ensure a democratic process for safeguarding our financial institutions—not for the Director of the Consumer Financial Protection Bureau and the Comptroller of the Currency to simply rubber-stamp the whims of a minority Board member. The Open Markets Institute and other public interest groups look forward to working with the majority to protect and expand these vitally important reforms.”

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