Three top House Democrats have asked the Federal Deposit Insurance Corp. (FDIC) to explain how the agency is preparing for a financial crisis.
The lawmakers’ letter to FDIC Chairman Jelena McWilliams, dated April 13, cited an independent report about weaknesses in the Fed’s crisis readiness. The 82-page paper issued last week by the Office of Inspector General raised questions about whether the agency is prepared for the potential financial consequences from COVID-19.
“We write today to request information regarding steps the FDIC is taking to ensure that the agency is ready for a financial crisis, particularly since we are in the midst of a deadly coronavirus pandemic that is taking thousands of lives and straining our nation’s economy,” the letter said.
It was signed by House representatives Carolyn B. Maloney (D-N.Y.), chairwoman of the Committee on Oversight and Reform; Maxine Waters (D-Calif.), chairwoman of the Committee on Financial Services; and Raja Krishnamoorthi (D-Ill.), chairman of the Subcommittee on Economic and Consumer Policy.
“The Inspector General finds that the FDIC lacks documented policies and procedures for readiness planning, including policies that define readiness authorities, roles, and responsibilities,” the lawmakers wrote. “The report also notes that the FDIC lacks an agency-wide all-hazards readiness plan and does not have a documented process for monitoring lessons learned from exercises and reviews of the prior financial crisis.”
The inspector’s report made recommendations to improve the FDIC’s crisis readiness planning, including establishing policies, documenting readiness plans, lists for employees who will provide training with their specific tasks, documenting exercises, monitoring the status of lessons learned, maintaining readiness documents and assessing and reporting readiness progress.
The FDIC agreed to seven of 11 recommendations, partially concurred with four others and provided corrective actions that are expected to be completed by March 31, 2022, the Inspector General’s report said.
“In light of the ongoing coronavirus pandemic and resulting strains on the global financial system, we urge you to act immediately to establish robust crisis readiness,” the lawmakers’ letter said.