Sheila Bair will officially step down as chairman of the Federal Deposit Insurance Corp. on July 8, the agency said Monday afternoon.
"Consistent with previous public statements, chairman Bair…will depart the agency following the expiration of her term," the agency said.
Bair was appointed by former President George W. Bush to run the FDIC and was confirmed by the full Senate in June 2006.
As chairman she pushed for tougher lending standards on subprime and non-traditional mortgage lending. She also wanted limits on bank holdings of commercial real estate loans, but resistance and foot dragging by fellow regulators and industry groups led to the issuance of weak regulatory guidance. By then it was too late to stop the coming real estate bust.
In 2008, with home values weakening and delinquencies spiking the FDIC was forced to rescue Washington Mutual and closed Indy Mac, two large West Coast thrifts that were major players in subprime and alt-A. That year alone the FDIC closed 25 banks and thrifts with combined assets of $372 billion.
Subsequent failures forced the agency to hike deposit insurance premiums and levy assessments to keep the FDIC fund in the black and avoid a government bailout.
From 2006 through 2010, FDIC closed 322 banks and thrifts with combined assets of $636 billion.
FDIC vice chairman Martin Gruenberg is expected to replace Bair and serve as the new chairman through 2012.
