Senate Confirms Gruenberg as FDIC Director, but Not Chair

Before leaving for recess Thursday, the Senate confirmed Martin Gruenberg, Thomas Hoenig and Jeremiah Norton to seats on the board of the Federal Deposit Insurance Corp. while also approving Thomas Curry as comptroller of the currency.

But in an unusual move, the Senate did not confirm Gruenberg as chairman of the FDIC, or Hoenig as the agency's vice chair. Instead, the chamber left Gruenberg as the agency's vice chairman, allowing him to continue to lead the agency in an acting capacity.

The situation sparked immediate head-scratching as Washington, as industry observers tried to dissect what was going on.

The move, which occurred by unanimous consent of the Senate, represents a middle ground between the across-the-board approval of financial regulatory nominees that Senate Democrats were seeking and a refusal to move forward on any nominees by Senate Republicans given lingering anger over President Obama's controversial recess appointment of Richard Cordray to the Consumer Financial Protection Bureau.

But it also likely reflects the political realities of a presidential election year. Confirming Gruenberg as chair of the FDIC would have left him as leader of the agency for several years, well into a potential Republican administration, should the party's presidential candidate win the election this year.

By confirming Gruenberg for a board seat — but not the chairmanship — Republicans have guaranteed his ability to lead the agency in an acting capacity for the foreseeable future, but left themselves the flexibility to nominate their own FDIC chairman if they win the White House.

While Senate Republicans have never doubted Gruenberg's qualifications to serve as FDIC chair, some have privately expressed reservations about the former Democratic Senate Banking aide, viewing him as too liberal.

Although Gruenberg tends to be cautious in public, he can be dogged and determined behind the scenes, making him a potentially forceful chairman. By keeping him as acting chair, Republicans may be hoping to curb any of Gruenberg's more ambitious undertakings.

Still, the Senate's moves means the FDIC board will have all five seats filled. Gruenberg's board term was extended, while Hoenig and Norton were each confirmed as board directors. Curry, who previously held an independent seat on the FDIC, will remain on the board as the now-confirmed head of the OCC. (Cordray, whom the administration recess-appointed to lead the CFPB in January, holds the fifth seat.)

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