The U.S. Financial Regulatory Week Ahead

Aug 30

September 2 - 6, 2024

Washington Gets Back to Work… Sort Of…

And What is Going on at the FDIC?

Monday is Labor Day, the last day of summer, and the virtual starter gun is being fired for what will be a busy and, at times, wild autumn in Washington. Schools are back in session, vacation is over, and Washington is back to work (except Congress, which gets back September 9th).

There really is not anything of note on the regulatory agenda this week—traditionally, this is the week everyone in Washington uses to get back in the groove of work and prep for the onslaught of regulatory meetings and rule-making, lawsuits, legislation, and of course, the November elections.

This past week, the one big event of note was yet another blow-up at the Federal Deposit Insurance Corporation (FDIC) when FDIC Board Member Jonathan McKernan released a memo blasting the Democratic members of the board—including Chair Marty Gruenberg—for how they intend to move forward in investigating senior FDIC officials for creating and maintaining a toxic workplace, including allegations against Gruenberg. In a closed-door meeting this past Wednesday, the board voted along partisan lines on how the investigation will be conducted.

McKernan said that what was voted on was a “convoluted and complicated process” that limits the information available to outside investigators. However, the public cannot judge for themselves because the board voted to keep the resolution secret and will not publish it.

To be clear as to the extent of the crisis at the FDIC caused by Gruenberg, it is worth reviewing the facts of the situation: Gruenberg, who was cited by an outside review conducted by the law firm Cleary Gottlieb as leading and allowing a highly toxic workplace at the FDIC for years (and apparently is still under investigation in some way) refuses to resign and is allowed to vote on how he should be investigated. The majority of the FDIC board also refuses to allow the public to see the resolution they voted on describing how investigations will be conducted. And Gruenberg will almost assuredly be sitting in the chair for the rest of the year because he knows, and everyone else knows, his successor will almost assuredly not be confirmed by the Senate until the spring of 2025. How the once mighty FDIC has fallen.

As we started this week’s note by saying, the regulators are not conducting much public business. The SEC has a closed meeting scheduled, and one Fed speech has been scheduled.

We hope you enjoy the week – it is going to get very busy the following week and months to come:

U.S. Congressional Hearings

U.S. Senate

· The Senate is out of session for the month of August and returns to work on September 9.

House of Representatives

· The House is out of session for the month of August and returns to work on September 9.

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

· Friday, September 6, 11:00 a.m. – Federal Reserve Board Governor Christopher J. Waller gives a speech on the economic outlook at the University of Notre Dame Department of Economics in South Bend, Indiana.

U.S. Treasury Department