The Trump Team’s anti-regulation agenda is bolstered by its nomination of the House Financial Services Committee counsel to join and run the FDIC.
The White House has announced its intention to nominate James Clinger, the chief counsel for the House of Representatives committee on financial services, to be a director at the Federal Deposit Insurance Corp. (FDIC).
Additionally, the plan is for Clinger, whose nomination will require Senate confirmation, to become chairman of the FDIC for a five-year term beginning Nov. 29, according to the White House statement.
That elevation will follow the departure of the current chairman, Martin Gruenberg, who steps down in November at the end of his own five-year term.
Clinger, whom the American Banking Association’s (ABA) journal characterizes as a “banking lawyer,” has been chief counsel to the committee on financial services since 2007, following an earlier tour as committee counsel, from 2001 to 2005. The InsideGov website estimates his chief counsel salary at $172,500.
The head of the House Financial Services committee, Texas Republican Jeb Hensarling, praised the FDIC nomination, calling Clinger “incredibly smart and a man of the highest integrity.”
His nomination is a “big step towards loosening the shackles on Wall Street,” according to Seeking Alpha, which characterizes itself as a “website for actionable stock market opinion and analysis.” The website also observes that Clinger has been “involved in efforts to rip up” Dodd-Frank.
In addition to regulating the banking industry and providing insurance for deposits, the FDIC also “helps limit the effect on the economy when a bank or thrift institution fails,” as Newsmax, the influential media company generally regarded as conservative and Republican-oriented, puts it.
At the FDIC, Clinger would be “in charge of regulating many small, locally-focused community banks as well as evaluating whether large banks have credible ‘living will’ plans for failing without a taxpayer bailout,” according to The Wall Street Journal.
From 2005 to 2007, Clinger was a deputy assistant attorney general, the administration’s statement points out, noting also that he “served as Senior Banking Counsel for the House Committee on Financial Services from 2001 to 2005, and as Assistant Staff Director from 1995 to 2001. Before entering public service, he was a litigation attorney at the firm Sutherland Asbill and Brennan from 1987 to 1995.”
Sutherland Asbill and Brennan, probably best known for its expertise in various aspects of financial services law, became Eversheds Sutherland earlier this year, when it combined with Eversheds, a law firm headquartered in the U.K.
The Clinger nomination comes as the White House continues to “fill out” its “financial regulatory team,” the ABA’s journal adds, citing the nomination of Joseph Otting, former OneWest Bank CEO, as comptroller of the currency.
The Office of Comptroller of the Currency (OCC) is an independent agency inside the U.S. Department of the Treasury, where it is responsible for bank oversight. It will “play a key role in Trump’s plan to roll back Dodd-Frank regulations,” according to cable network CNBC, which also points out that Otting “worked closely” with future Treasury Secretary Steven Mnuchin at OneWest Bank, which Mnuchin purchased in 2009.
Clinger has “spent most of his career on Capitol Hill, where he’s worked on legislation that deregulated the finance industry,” the Bloomberg news service points out, noting that he “helped write the 1999 Gramm-Leach Bliley Act, which overturned much of a Depression-era law that had separated consumer and investment banking for more than 60 years.”
The expectation is that, if they are confirmed, Otting and Clinger will — with Mnuchin — form a powerful deregulation lobby inside Treasury.
In 2015, CIT Group formally acquired OneWest Bank’s parent company, IMB Holdco, for approximately $3.4 billion in cash and stock. At that time, OneWest was renamed CIT Bank and Mnuchin, the future Treasury secretary, joined CIT Group Inc. as vice chairman and a member of its board of directors, according to the 2015 announcement of the acquisition’s completion.
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