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Banks Face Old Foe as Senate Weighs Biden’s FDIC Pick Goldsmith Romero

Biden's FDIC Nominee Goldsmith Romero Faces Senate Hearing Amid Workplace Culture Scandals and Regulatory Challenges

By Mackenzie Crow

7/11, 06:20 EDT
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Key Takeaway

  • Christy Goldsmith Romero, Biden's nominee for FDIC head, is known for her tough stance on fraud and misconduct, having helped imprison over 70 bankers during her tenure at Sigtarp.
  • If confirmed, she aims to address the FDIC's toxic workplace culture and focus on accountability for executives and boards of directors.
  • Despite Republican skepticism due to her left-leaning policies at the CFTC, she brings experience in digital assets, AI, cybersecurity, and a strong focus on diversity.

Goldsmith Romero's Nomination

Christy Goldsmith Romero, the Biden administration's nominee to lead the Federal Deposit Insurance Corp. (FDIC), is set to face a Senate hearing on Thursday. Known for her rigorous oversight during her tenure at the Office of the Special Inspector General for the Troubled Asset Relief Program (Sigtarp), where she helped convict over 70 bankers, Goldsmith Romero is expected to bring a similar level of accountability to the FDIC. Her nomination comes at a time when the FDIC is grappling with allegations of sexual harassment, discrimination, and a toxic workplace culture. Current Chair Martin Gruenberg has announced his intention to step down once a successor is confirmed.

Goldsmith Romero's approach to regulation has been described as intense yet fair. Dennis Kelleher, president and CEO of Better Markets, stated, "One thing you can take to the bank is Christy Goldsmith Romero will hold people accountable. People who engage in misconduct will be swiftly and severely punished." However, her nomination is not without controversy. Some Republicans on the Senate Banking Committee view her policies at the Commodity Futures Trading Commission (CFTC) as too left-leaning and are concerned she might bring a similar approach to the FDIC.

Regulatory Focus and Challenges

If confirmed, Goldsmith Romero is expected to focus on holding executives and boards accountable, a stance she has maintained at the CFTC. Peter Dugas, executive director at Capco, noted that her experience with digital assets, artificial intelligence, and cybersecurity at the CFTC would be valuable at the FDIC. "Having that lens going into the job of the FDIC is going to be equally important because of the speed of change in banking and financial services, generally," Dugas said.

Goldsmith Romero will also have to navigate policies opposed by banks, including the Biden administration's bank-capital overhaul. Although the CFTC isn't directly involved in this proposal, its potential impact on derivatives markets has been monitored by Goldsmith Romero and other commissioners. Some Republican lawmakers have criticized her lack of bank supervisory experience, but former Republican FDIC Chair Sheila Bair believes she has a good base of knowledge to hit the ground running.

Transforming FDIC Culture

One of the most significant challenges Goldsmith Romero will face is transforming the FDIC's workplace culture. A report by Cleary Gottlieb Steen & Hamilton revealed a "boys' club" culture that enabled sexual harassment, discrimination, and other misconduct. Vince Micone, a former deputy at Sigtarp and now a deputy assistant secretary at the Labor Department, said, "In my experience, when she heard real concerning matters involving personnel, she would address them. She wouldn’t let things fester."

Goldsmith Romero has also emphasized diversity within government. During her leadership at Sigtarp, nearly half of the employees identified as a racial or ethnic minority. Her background as the daughter of a US Navy sailor who immigrated from the Philippines and her focus on creating a respectful workplace are expected to influence her approach at the FDIC.

Street Views

  • Dennis Kelleher, Better Markets (Neutral on Christy Goldsmith Romero's regulatory approach):

    "One thing you can take to the bank is Christy Goldsmith Romero will hold people accountable. People who engage in misconduct will be swiftly and severely punished."

  • Peter Dugas, Capco (Cautiously Optimistic on Christy Goldsmith Romero's impact at FDIC):

    "Having that lens going into the job of the FDIC is going to be equally important because of the speed of change in banking and financial services, generally."

  • Sheila Bair, Former Republican FDIC Chair (Neutral on Christy Goldsmith Romero’s readiness for FDIC role):

    "She’s got a good base of knowledge on the supervisory side already... She will face a learning curve on the FDIC’s work with deposit insurance and bank resolution plans."