President Biden will nominate Christy Goldsmith Romero, a Democratic member of the Commodity Futures Trading Commission, to switch Martin Gruenberg as chair of the Federal Deposit Insurance Corporation, the White House said Thursday.
The intended nomination from the White House comes after Gruenberg, a Democrat, said in May he would step down once a successor is confirmed by the Senate. The FDIC chief succumbed to pressure from lawmakers who said the bank regulator needed fresh leadership after an investigation found widespread sexual harassment and other misconduct on the agency.
Goldsmith Romero, 53, has a background in enforcement and has led major actions against Wall Street banks and other financial firms during her profession.
Christy Goldsmith Romero, a Democratic member of the Commodity Futures Trading Commission, will head up Federal Deposit Insurance Corporation. CFTC
She joined the CFTC in March 2022 after a decade investigating financial crime and fraud because the watchdog of a key 2009 financial crisis bailout program.
The White House also said it plans to nominate Kristin Johnson, one other Democratic CFTC Commissioner, to be the Treasury Department’s assistant secretary for financial institutions, a key role after three banks failed in 2023. Reuters reported on Wednesday their nominations were imminent, because the Biden administration pushes for first nomination hearings the week of July 8.
In progressive circles, Goldsmith Romero is seen as a robust fit for the FDIC role and as having the management experience and skill set needed to assist fix the agency’s “toxic” environment, because the investigation described the FDIC, and address other challenges.
Goldsmith Romero “would bring to the FDIC many years of economic services experience, including useful experience because the Special Inspector General protecting taxpayers on the Troubled Asset Relief Program (SIGTARP),” said Democratic Senator Sherrod Brown, who chairs the Banking Committee that can vote on advancing the FDIC nominee.
“She has proven herself to be a robust, independent, and fair regulator who is just not afraid to do what’s right.”
During her tenure as Special Inspector General for the Troubled Asset Relief Program (SIGTARP) from 2012 to 2022, Goldsmith Romero’s office brought cases and cooperated in federal enforcement actions against major corporations, including Goldman Sachs, Morgan Stanley and General Motors.
Goldsmith Romero also received awards from the US Attorney General and Department of Justice’s Criminal Division after her office uncovered a multibillion-dollar fraud, resulting in jail terms for former executives at the previous mortgage lender Taylor, Bean & Whitaker and the failed Colonial Bank.
FDIC Chair Martin Gruenberg announced last month he was resigning. The bank regulator needed fresh leadership after an investigation found widespread sexual harassment and other misconduct on the agency. Getty Images
“One other day with Martin Gruenberg on the helm of the FDIC is one too many,” said House Financial Services Committee Chairman Patrick McHenry, a Republican. “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.”
The FDIC can be grappling with the fallout of last yr’s bank failures, which exposed supervisory weaknesses on the regulator, and is attempting to finalize a handful of contentious latest rules for Wall Street banks, including major capital hikes.
Goldsmith Romero’s nomination, a process that typically takes months, comes at a precarious time politically, just five months ahead of the November general election.
Quite a few Senate Democrats are up for re-election in narrow races, including Sherrod Brown who chairs the Banking Committee that must advance the FDIC nominee, making a potentially contentious confirmation process difficult to navigate. Democrats control the Senate by a single vote.
Goldsmith Romero, 53, has a background in enforcement and has led major actions against Wall Street banks and other financial firms during her profession. X / @ChristyGRomero
Guilty admissions
As a CFTC commissioner, Goldsmith Romero has advocated for stronger policing of US markets and stiffer penalties for misconduct.
Most notably, she has pushed for the agency to secure more admissions of wrongdoing from firms when settling enforcement actions, particularly from repeat offenders.
“We’ve seen Wall Street banks get one enforcement motion after one other … so I’m on the lookout for a greater deterrent impact,” she told Reuters in a 2022 interview.
That campaign was evidenced by a recent CFTC settlement with JPMorgan Chase, during which the bank admitted it broke the agency’s rules.
Goldsmith Romero’s nomination comes at a precarious time politically, just five months ahead of the November general election. REUTERS
She has also led the agency’s efforts to raised understand the potential impact of artificial intelligence on financial markets.
Prior to being appointed SIGTARP, Goldsmith Romero was counsel to then-Securities and Exchange Commission chairs Mary Schapiro and Christopher Cox and had investigated securities law violations.
She began her profession as a law clerk on the US Bankruptcy Court in Nevada after graduating from Brigham Young University Law School in 1995.
The White House also said Biden intends to nominate Caroline Crenshaw to a different term as commissioner on the Securities and Exchange Commission and Gordon Ito to be a member of the Financial Stability Oversight Council.
