Democratic senators, led by Elizabeth Warren, are investigating the Federal Deposit Insurance Corp.’s (FDIC) decision to rescind hundreds of job offers for bank examiners in light of prior advice from the agency’s inspector general. The lawmakers argue that the move undermines the FDIC’s ability to oversee troubled banks like Signature Bank.
Following President Donald Trump’s executive order freezing federal civilian hiring, the FDIC canceled more than 200 job offers to bank examiners. This decision came after a series of supervisory delays and quality control issues at Signature Bank, which was facing potential failure in March 2023.
The FDIC OIG had previously advised the agency to bolster staff to prevent bank failures. The senators believe that the FDIC’s staffing levels are crucial given the seniority of its workforce and the impending retirement of many employees. They have requested an evaluation of the agency’s decision to determine whether it undermines progress on prior recommendations.
The lawmakers point to a 2024 budget approved by the FDIC Board of Directors, which significantly increased examiner positions under former Chairman Martin Gruenberg’s leadership. However, following Trump’s election, the measures were reversed, and Travis Hill expressed opposition to increasing staff.
The Democratic senators’ investigation aims to ensure that the agency takes corrective action to address its staffing issues, given the employee retirement-eligibility rates are higher than the government-wide average.
Source: https://www.americanbanker.com/news/lawmakers-citing-past-failures-warn-staffing-shortages-at-the-agency-weaken-oversight