FDIC Chairman Jelena McWilliams. FDIC photo

Weeks after a conflict arose between the FDIC chairman and board members, FDIC Chairman Jelena McWilliams has announced her resignation.

McWilliams sent a letter Friday to President Joe Biden saying that she would resign effective Feb. 4. The FDIC released a copy of the letter Friday afternoon. The letter did not provide a reason for the resignation.

“Serving the American people alongside the dedicated career professionals of the FDIC has been the highlight of my professional life,” McWilliams said in the letter. “Throughout my tenure, the agency has focused on its fundamental mission to maintain and instill confidence in our banking system while at the same time promoting innovation, strengthening financial inclusion, improving transparency, and supporting community banks and minority depository institutions, including through the creation of the Mission Driven Bank Fund.”

The controversy on the FDIC board stemmed from a request for public comments about bank mergers. Rohit Chopra, director of the CFPB, had said in a joint statement on Dec. 9 that the FDIC had approved a request for information on bank mergers. Chopra, who as CFPB director is automatically a member of the FDIC board, issued the statement with Martin Gruenberg, another FDIC board member and former FDIC chairman.

Later that afternoon, the FDIC released a statement saying it had not approved the document.

The FDIC board typically has five members, though currently the vice-chairman position is vacant. Michael Hsu, the acting comptroller of the currency, is another automatic member of the board. Chopra, Gruenberg and Hsu are Democrats while FDIC Chairman Jelena McWilliams is a Republican who was appointed to the position by then-President Donald Trump in 2018.

McWilliams wrote an op-ed the following week for the Wall Street Journal saying that she had told board members she would be willing to work with them on a document drafted by FDIC staff. McWilliams said the board instead voted on a document drafted by the CFPB.

McWilliams in the op-ed referred to the board members as attempting a “hostile takeover” of the FDIC.

With her term not expiring until 2023, McWilliams had previously indicated that she would remain as chairman for the full term.

Her resignation letter pointed to the FDIC’s work since the start of the pandemic.

“The unexpected shock of COVID-19 tested the resilience of our financial system beginning in March 2020, and the FDIC took swift actions to maintain stability and provide flexibility for banks and consumers,” McWilliams said. “The core of our financial system not only weathered the storm, but was a tangible source of strength for the American economy. The committed staff of the FDIC deserve great credit for these results, and they have my profound gratitude.”

Rob Nichols, president and CEO of the American Bankers Association, said in a statement Friday that McWilliams’s efforts during the pandemic have “allowed banks of all sizes to serve as a source of strength for the economy, while maintaining their commitment to safety and soundness.”

“We appreciate her willingness to listen to all stakeholders in addressing policy issues, and particularly appreciate her strong support for initiatives to reduce the number of unbanked Americans and promote financial inclusion,” Nichols said. “We thank Chairman McWilliams for her service at the FDIC and wish her well in her next endeavors. We also look forward to working with the new leadership at the FDIC in pursuit of commonsense banking rules that will continue to promote economic growth and opportunity.”

Consumer Bankers Association President and CEO Richard Hunt also praised McWilliams in a statement Friday. Hunt further called on the FDIC board, which typically consists of members of both political parties, to hold off on new regulations while only Democrats remain on the board.

“Following Chairman McWilliams departure, the agency – whose board members have worked to balance the will of the majority and minority for nearly a century – will be without any ideological balance for the first time in recent memory,” Hunt said. “To preserve confidence in the FDIC, the Board of Directors should not pass any new rules or regulations until a replacement Board member representing the minority party is seated.”