Bank Regulation

FDIC Chief To Revisit Banking, Lending Rules

Federal Deposit Insurance Corporation (FDIC) Chairman Jelena McWilliams is set to review policies being proposed by other Trump-appointed officials, including rules on bank capital, small-dollar loans and investments in low-income areas. According to The Wall Street Journal, McWilliams said during her first interview as chairman that her top priorities are looking into the regulatory burden on small banks, speeding up the FDIC’s review of bank charter applications, and helping banks introduce financial products for underserved communities.

“There should be pilot programs where the regulators and the banks work together” to allow testing of new products, she said. “If we can create a framework where that green light is given in a way that is safe for the consumers, why not?”

Previously, McWilliams was a Senate Banking Committee aide to Senator Richard Shelby, a Republican from Alabama. Prior to that, she served as an attorney for the Federal Reserve Board.

Her predecessor, Martin Gruenberg, remains on the FDIC’s board of directors. McWilliams revealed that she doesn’t share his reluctance to change bank capital requirements.

“I think it is appropriate for the three banking agencies to sit down and take a look at the capital [rules] with a new eye,” she said, adding that rules for both small and big banks should be examined. “Is it doing what we intended for it to do?”

Another issue McWilliams could be tackling in the future: the “hold-up” regarding the issuance of lending licenses.

If the FDIC removes the barriers for special lending licenses, FinTech firms and even stores like Walmart would be able to enter the banking market. McWilliams thinks the licenses do not pose any threat to the banking industry, and she pans to make sure the government agency “swiftly” reviews those loan license applications.

“If it meets the ILC standards as currently set up by the FDIC, I believe there should be no obstacles in the application program,” she said right before her confirmation.

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