Warren, Colleagues Request Watchdog Probe into FDIC Rescinding More than 200 Bank Examiner Job Offers it Needs to Avoid Another Banking Collapse
“The FDIC OIG has previously concluded that staffing shortages…were one of two ‘primary causes for delays in supervisory activities’ related to Signature Bank’s failure in March 2023”
“We ask that you conduct an evaluation of this decision and determine whether it undermines progress on the FDIC OIG’s previous recommendations to the agency.”
Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), ranking member of the Senate Banking, Housing and Urban Affairs Committee, wrote to the FDIC Inspector General requesting a probe to determine whether recent the Acting Chairman’s action to rescind more than 200 job offers to bank examiners threatens the stability of the banking system. She was joined by Senators Raphael Warnock (D-Ga.), Chris Van Hollen (D-Md.), and Lisa Blunt-Rochester (D-De.), members of the Senate Banking, Housing, and Urban Affairs Committee.
In March 2023, the collapse of Signature Bank, caused an estimated $2.4 billion loss for the Deposit Insurance Fund. The FDIC was the primary federal regulator of Signature Bank, and post-mortem reviews found a series of supervisory failures, including persistent understaffing problems at the regulator.
In December 2023, the FDIC Board of Directors responded to these concerns by unanimously
approving a new budget that increased the number of bank examiner positions. But President Trump Executive Order instituting a hiring freeze on all federal civilian employees, reportedly resulted in the FDIC’s Acting Chairman rescinding more than 200 job offers to bank examiners.
“Given the implications this decision may have on the safety and soundness of the U.S. banking system and the risk it may pose to the Deposit Insurance Fund, an evaluation by your office would be consistent with your mission to ‘promote economy, efficiency and effectiveness at the Agency.’” wrote the Senators.
The Senators requested that the agency conduct an evaluation of this decision and determine whether it undermines progress on the FDIC OIG’s previous recommendations to the agency.
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