Biden Taps CFTC Commissioner Goldsmith Romero to Lead FDIC Amid Scandal

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U.S. President Joe Biden plans to nominate Christy Goldsmith Romero, a Democratic member of the Commodity Futures Trading Commission (CFTC), to replace Martin Gruenberg as chair of the Federal Deposit Insurance Corporation (FDIC), the White House announced on Thursday.

This move follows Gruenberg’s announcement in May that he would step down once a successor is confirmed by the Senate. Gruenberg, a Democrat, faced pressure from lawmakers who believed the FDIC needed new leadership after an investigation revealed widespread sexual harassment and other misconduct at the agency.

Goldsmith Romero, 53, brings a strong background in enforcement to the table. She joined the CFTC in March 2022 after spending a decade investigating financial crime and fraud as the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), a key role in the 2009 financial crisis bailout program. Her tenure at SIGTARP from 2012 to 2022 saw her leading major actions against Wall Street banks and other financial firms, including cases involving Goldman Sachs, Morgan Stanley, and General Motors. She received accolades from the U.S. Attorney General and the Department of Justice’s Criminal Division for uncovering a multibillion-dollar fraud that led to jail terms for former executives at the mortgage lender Taylor, Bean & Whitaker and the failed Colonial Bank.

Goldsmith Romero’s nomination comes at a critical time for the FDIC, which is grappling with the aftermath of several bank failures in 2023 and working to finalize new rules for Wall Street banks, including significant capital hikes. Democratic Senator Sherrod Brown, who chairs the Banking Committee, praised Goldsmith Romero, stating that she “would bring to the FDIC decades of financial services experience, including valuable experience as the Special Inspector General protecting taxpayers at the Troubled Asset Relief Program (SIGTARP).” Brown emphasized her proven track record as a strong, independent, and fair regulator.

House Financial Services Committee Chairman Patrick McHenry, a Republican, echoed the need for new leadership, stating, “Another day with Martin Gruenberg at the helm of the FDIC is one too many. If confirmed, Christy Goldsmith Romero must immediately begin taking steps to reverse the toxic culture overseen by Gruenberg to rebuild trust between FDIC employees and management.”

In addition to Goldsmith Romero, the White House announced plans to nominate Kristin Johnson, another Democratic CFTC Commissioner, as the Treasury Department’s assistant secretary for financial institutions—a key role following the bank failures in 2023. Caroline Crenshaw is set to be nominated for another term as commissioner at the Securities and Exchange Commission, and Gordon Ito will be nominated as a member of the Financial Stability Oversight Council.

In progressive circles, Goldsmith Romero is seen as a suitable candidate for the FDIC role, possessing the management experience and skills needed to address the agency’s challenges. Her nomination, however, comes just five months before the November general election, during a politically precarious time. Several Senate Democrats, including Senator Brown, are up for re-election in closely contested races, potentially complicating the confirmation process.

As a CFTC commissioner, Goldsmith Romero has been a staunch advocate for stronger policing of U.S. markets and harsher penalties for misconduct. She has pushed for the agency to secure more admissions of wrongdoing from companies, particularly repeat offenders, to create a greater deterrent impact. “We’ve seen Wall Street banks get one enforcement action after another … so I’m looking for a greater deterrent impact,” she told Reuters in a 2022 interview.

Goldsmith Romero’s extensive experience in financial regulation and enforcement, combined with her commitment to addressing misconduct and fostering a healthy organizational culture, positions her as a strong candidate to lead the FDIC through its current challenges and future developments. The confirmation process will be closely watched as it unfolds in the coming months.