Senator Elizabeth Warren is sounding the alarm on cuts to the Federal Deposit Insurance Corporation (FDIC), citing the potential disruption to the stability of the banking season. In a letter co-signed by several Democratic senators, Warren expressed concerns that staffing shortages at the agency could lead to catastrophic consequences for the banking system.
The FDIC’s hiring freeze and decision to rescind 200 job offers have left examiners with insufficient staff to conduct thorough exams, according to Warren. This lack of oversight may lead to quality control issues and supervisory delays, as seen in the collapse of Signature Bank in 2023.
Warren warned that a shortage of regulators can threaten the safety and soundness of the banking system, posing risks to the Deposit Insurance Fund. She has previously expressed concerns about the gutting of other regulatory agencies, including the Consumer Financial Protection Bureau (CFPB).
The CFPB was created as a result of Warren’s 2007 proposal, but its recent work has been significantly impacted by Trump’s acting director, Russel Vought. Warren accused Trump and his allies of trying to “shut down” the agency, which has delivered billions of dollars in benefits to hardworking families.
Warren emphasized that Congress is responsible for building and maintaining regulatory agencies like the CFPB. She argued that only Congress can fire financial regulators, and that Trump’s actions are a threat to the stability of the banking system.
Source: https://qz.com/elizabeth-warren-warning-banking-system-trump-fdic-cfpb-1851760186