President Trump Names Acting FDIC Chair
Commentary by Thomas Delaney
President Trump designated Travis Hill, former Vice Chair, as Acting Chair of the FDIC. Mr. Hill succeeds Martin Gruenberg.
In a statement, Mr. Hill highlighted his priorities and approach to the new position. He said the FDIC will:
- conduct a review of regulations, guidance and manuals;
- adopt a more "open-minded" approach to Fintech;
- improve the bank merger approval process;
- "[w]ithdraw problematic proposals from the past three years, including as to brokered deposits and corporate governance;"
- improve the supervisory process and reevaluate disclosure practices;
- enhance "preparedness for resolving large financial institutions, incorporating lessons from the far-too-costly failures of 2023;" and
- adjust capital and liquidity rules.
Commentary
Travis Hill is the new Acting Chair of the FDIC. It looks like the staff of the FDIC may receive new coloring books to ensure that, under his leadership, the agency exercises its statutory mandates by coloring within, rather than outside of the lines. In his first statement, Acting Chair Hill laid out an ambitious agenda, which includes reevaluating policy initiatives undertaken by the prior administration that have been criticized by some as overreaching, particularly in the areas of bank mergers, capital and liquidity, brokered deposits and governance.
At the same time, Mr. Hill indicated that he intends to steer the agency toward a more open-minded approach to innovation and technology adoption, including with respect to Fintech partnerships and to digital assets and tokenization. He also expressed concern for the growing compliance-related technology cost burden being shouldered by community banks, and hinted at improvements to the bank resolution process that could include an expansion of the pool of entities qualified to bid on failed banks. The breadth of Acting Chair Hill's agenda will require agency staff to work quickly to get up to speed on his preferred coloring techniques.