U.S. Regulatory Week Ahead

Dec 20

The Wall Street Journal Calls for Fed Vice Chair Barr to be Removed, The FDIC Inspector General’s Scathing Report About Harassment Under Chair Gruenberg’s Watch, And Washington Goes Totally Quiet

December 23 - 27, 2024

There is nothing going on next week in Washington – Merry Christmas and Happy Hanukkah!

As we write this, Congress is finally passing a stop-gap spending package to keep the government running for another three months. And with that, the 118th Congress comes to an end.

Enjoy the peace – it’s going to get very busy in January as the Trump Presidency begins and a whole new team of regulators with a vastly different agenda than the current team.

Quickly looking at what happened this past week, there were a couple of important events. First, we would note the Wall Street Journal’s editorial calling for Federal Reserve Board Vice Chair for Supervision Michael Barr to be removed by President Trump “for cause” – the only way a Fed Chair or Fed Governor can be fired by a President. The editorial listed a litany of Barr’s “sorry record”, and suggested Trump could name Fed Governor Michelle Bowman as Barr’s replacement. The piece is hard-hitting, and we believe it suggests Barr – who was appointed by President Biden and has said publicly he intends to stay in the job – is going to face a particularly grueling future oversight by the Republican-led Senate Banking Committee and Republican-led House Financial Services Committee.

But Barr was not the only regulator to take a beating last week. Once again, the Federal Deposit Insurance Corporation (FDIC) leadership came under withering criticism with the release of a new report from the FDIC’s Inspector General showing that more than a third of employees surveyed reported experiencing or witnessing workplace harassment. "These conditions occurred because FDIC leadership does not consistently implement the agency's policies and stated core values, specifically, fairness, accountability, and integrity," the watchdog agency said in the report. FDIC Chair Marty Gruenberg had no comment on the report and continues to refuse to resign despite presiding over such a toxic workplace. Instead, he intends to leave on January 19, the day President Trump is inaugurated (and thereby avoid being fired by Trump).

And finally, Delaware’s banking regulator signed off on the $35 billion Capitol One acquisition of Discover. While the deal has to be approved by federal regulators, it was the first major positive sign the deal may ultimately be approved.

We hope you have a joyful Christmas and a Happy Hanukkah!

U.S. Congressional Hearings

U.S. Senate

· The Senate has completed its work in the 118th Congress. The new Congress – the 119th Congress – will be sworn into office on January 3, 2025.

House of Representatives

· The House has completed its work in the 118th Congress. The new Congress – the 119th Congress – will be sworn into office on January 3, 2025.