Christy Goldsmith Romero Likely to Be Confirmed as FDIC Chair Despite Slow Process
Christy Goldsmith Romero is expected to be confirmed as the new U.S. Federal Deposit Insurance Corporation (FDIC) chair. However, the process may take longer due to expected delays from Republican opposition.
Background of the Nomination
President Joe Biden nominated Goldsmith Romero, currently a Democratic commissioner at the Commodity Futures Trading Commission, to replace the outgoing Martin Gruenberg. Gruenberg is stepping down after a probe revealed widespread sexual harassment at the agency.
The FDIC plays a critical role in safeguarding deposits and supervising banks. It also contributes to creating new rules that would impose stricter controls on banks and their executives. Confirming Goldsmith Romero before the November elections could ensure stable leadership at the FDIC for the foreseeable future.
Push for Quick Confirmation
The White House is pushing for her confirmation as soon as possible. Sherrod Brown, the Democratic chair of the Senate Banking Committee, wants her first hearing to be the week of July 8. To be confirmed, Goldsmith Romero needs 51 votes in an evenly divided Senate. Vice President Kamala Harris can break a tie, yet fierce opposition from Republicans could slow the process.
Isaac Boltansky, director of policy research at BTIG, noted, "The likeliest scenario in our view is that this nomination will be slow walked, face some headwinds … and stall in the near-term."
Goldsmith Romero’s Support and Experience
Goldsmith Romero is backed by Democratic progressives. She has been unanimously confirmed by the Senate twice before, indicating bipartisan support. Brad Bondi, a Washington attorney, described her as an "honest, intelligent, hardworking and fair" consensus builder.
Senator Tim Scott, the senior Republican on the Senate Banking Committee, stated he would review her qualifications but has not yet taken a stance on her nomination.
Challenges Faced
Goldsmith Romero’s nomination faces several challenges. Republican criticism of her lack of bank supervision experience is a key issue. Some hardline Republicans have vowed to oppose Biden’s nominees to protest former President Donald Trump's recent conviction.
If any Senator objects to her nomination, the confirmation must go to a full Senate debate and recorded vote. This could consume hours of floor time, which is limited with Senators out of session through early September.
Strategic Implications
Republicans may delay the confirmation process to embarrass Democrats over the FDIC scandal. Ian Katz, from Capital Alpha Partners, suggested Republicans might not go all out to defeat her but could use the delay to declare victory for having ousted Gruenberg.
If a Republican wins the 2024 presidential election, they could more easily oust Gruenberg and nominate a Republican replacement, shifting the FDIC's balance of power.
Conclusion
Despite delays, analysts predict Goldsmith Romero will eventually be confirmed. It’s a critical nomination with significant implications for the FDIC's future.
As Ed Mills, an analyst at Raymond James, noted, "Goldsmith Romero's nomination is likely, but a short time frame and limited number of Senate days in session introduces some uncertainty."
Ensuring proper management of the FDIC is essential for both the banking industry and the broader financial system.
