The White House announced Thursday that President Biden will nominate Christy Goldsmith Romero, a Democratic commissioner at the Commodity Futures Trading Commission, to replace Martin Gruenberg as chair of the Federal Deposit Insurance Corporation.
The White House nomination comes after Grunberg, a Democrat, said in May he would step down once his successor was confirmed by the Senate. The FDIC director bowed to pressure from lawmakers who said the agency needed new leadership after an investigation found widespread sexual harassment and other misconduct at the agency.
Goldsmith Romero, 53, has a background in law enforcement and has led major litigation against Wall Street banks and other financial institutions during his career.
She joined the CFTC in March 2022 after a decade investigating financial crimes and fraud as overseer of the 2009 financial crisis bailout program.
The White House also announced it plans to nominate another Democratic commissioner at the CFTC, Christine Johnson, to be undersecretary for financial institutions at the Treasury Department, a key position after three banks failed in 2023. Reuters reported on Wednesday that their nomination is imminent, with the Biden administration pushing to hold the first nomination hearings the week of July 8.
Among progressives, Goldsmith Romero is seen as highly qualified for the FDIC role, with the management experience and skills needed to improve what the investigation described as a “toxic” environment at the bank and address other challenges.
Democratic Sen. Sherrod Brown, who chairs the Banking Committee, which votes to promote FDIC nominees, said Goldsmith Romero “will bring decades of experience in financial services to the FDIC, including valuable experience as Special Inspector General protecting taxpayers through the Troubled Asset Relief Program (SIGTARP).”
“She has demonstrated she is a strong, independent and fair regulator who is not afraid to do the right thing.”
As Special Inspector General for the Troubled Asset Relief Program (SIGTARP) from 2012 to 2022, Goldsmith Romero’s office prosecuted cases and assisted in federal enforcement actions against major companies, including Goldman Sachs, Morgan Stanley and General Motors.
Goldsmith Romero also received awards from the U.S. Attorney General and the Justice Department’s Criminal Division for her office’s uncovering of multi-billion dollar frauds that led to prison sentences for former executives of former mortgage lender Taylor Bean & Whitaker and the failed Colonial Bank.
“One more day with Martin Grunberg at the helm of the FDIC is too many,” said Republican Rep. Patrick McHenry, chairman of the House Financial Services Committee. “If confirmed, Christy Goldsmith Romero must immediately begin taking steps to reverse the harmful culture that Grunberg oversees and rebuild the trust of the FDIC’s employees and management.”
The FDIC is also grappling with the fallout from last year’s bank failures that exposed weaknesses in the regulator’s oversight and is finalizing several controversial new rules, including a major recapitalization of Wall Street banks.
Goldsmith-Romero’s nomination process, which typically takes months, comes at a politically volatile time, just five months before the November general election.
Several Senate Democrats are narrowly up for reelection, including Sherrod Brown, chairman of the Banking Committee, which must push through nominees for the Federal Deposit Insurance Corp., threatening to navigate a potentially contentious confirmation process. Democrats hold a one-vote advantage in the Senate.
Confessing Guilt
As a CFTC commissioner, Goldsmith Romero has advocated for increased oversight of U.S. markets and tougher penalties for misconduct.
Most notably, he has urged authorities to obtain more confessions of wrongdoing from companies in resolving enforcement actions, especially repeat offenders.
“We’ve seen Wall Street bank after bank face enforcement action… so I would like to see a greater deterrent effect,” she told Reuters in an interview in 2022.
This campaign was evidenced by the recent settlement between the CFTC and JPMorgan Chase, in which the bank admitted to violating CFTC regulations.
She has also led the agency’s efforts to better understand the potential impact of artificial intelligence on financial markets.
Prior to her appointment to SIGTARP, Goldsmith Romero served as counsel to then-SEC Chairs Mary Shapiro and Christopher Cox, investigating violations of securities laws.
After graduating from Brigham Young University Law School in 1995, she began her career as a law clerk in the United States Bankruptcy Court in Nevada.
The White House also said Biden intends to nominate Caroline Crenshaw to another term as a Securities and Exchange Commission commissioner and Gordon Itoo to serve as a member of the Financial Stability Oversight Council.
