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August 30, 2022

DOJ’s Opinion Rejecting Former FDIC Chair’s Attempted Coup and Confirming the Authority of the Majority of Directors Upholds the Rule of Law

WASHINGTON, D.C.— Dennis Kelleher, Co-Founder, President, and CEO, issued the following statement on release of the opinion of the Office of Legal Counsel at the Department of Justice regarding powers of the Chair and Board of the Federal Deposit Insurance Corp. (FDIC):

“Former Federal Deposit Insurance Corp. (FDIC) Chair McWilliams asserted that she had the unilateral authority to control the FDIC even when (1) she was a minority of one, (2) all the other presidentially appointed Directors opposed her, and (3) the FDIC Act, Bylaws, and practices did not support her actions.  Contrary to what her political and ideological allies have claimed, her action to impose such unprecedented minority rule at the FDIC was a de facto attempted coup.  The Act, Bylaws, and practices, as well as the mandated mission of the FDIC, required the other FDIC Directors to take majority action, rejecting such claim of unilateral power.

“Today’s opinion by of the Office of Legal Counsel (OLC) at the Department of Justice (DOJ) upholds the rule of law by confirming the power and authority of the majority of the Board of the FDIC and rejects the brazen claim of power and minority rule by the former Chair.  This, of course, was entirely predictable due to the clarity of the FDIC’s Act, Bylaws, and practices.

“Since being created in 1933, the FDIC has been one of the most successful agencies in the history of the United States under Republican and Democratic administrations because it has been run in a nonpartisan, apolitical manner to protect the best interests of depositors and banks.  We welcome the return to those days under the leadership of Acting Director Gruenberg and the other Directors.”

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Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.

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