McKernan steps down from the FDIC Board of Directors
FDIC Board Member Jonathan McKernan Steps Down, Highlighting Political Balance Challenges
Jonathan McKernan, a Republican member of the Federal Deposit Insurance Corporation (FDIC) board, has announced his departure, marking the end of his tenure on the financial regulatory body. McKernan's term expired, and his departure leaves the FDIC board without any Democratic members.
The FDIC Board of Directors, consisting of three members appointed by the President and confirmed by the Senate, is designed to ensure political balance. According to the rules, no more than two members can be from the same political party [1]. This bipartisan membership has significant implications, particularly when it comes to filling vacancies.
During his time on the FDIC board, McKernan co-chaired a special committee that monitored an independent review of sexual misconduct and toxic work culture allegations at the FDIC [2]. In a November statement, he expressed frustration with the delay in reaching an agreement regarding accountability for misconduct. The independent review found "sexual harassment, discrimination, and other interpersonal misconduct" at the FDIC, and it took the FDIC more than five months to reach a consensus on investigating these allegations [3].
McKernan was also vocal about ensuring asset managers don't exert outsized influence on publicly traded banks and advocated for timely approval of bank mergers, along with FDIC Acting Chair Travis Hill [4].
McKernan's departure comes as Rodney Hood, another Republican, takes on a role as both the acting director of the Consumer Financial Protection Bureau and a member of the FDIC board [5]. Agency rules mandate that no more than three of the FDIC's five board members can be from the same political party [6].
The bipartisan composition requirement is intended to maintain balance and continuity beyond a single presidential term, preventing excessive partisan control and preserving impartial regulatory oversight, which is critical for financial stability [3]. The current political balance on the FDIC board, with all members being Republicans, may present challenges in achieving this impartiality.
As the Biden-era CFPB Director, Rohit Chopra, shares similar views with McKernan on challenges in bank-fintech partnership governance [7], it remains to be seen how these changes in the FDIC board will affect the regulatory landscape.
[1] FDIC.gov, Accessed 13th April 2023 [2] FDIC.gov, Accessed 13th April 2023 [3] FDIC.gov, Accessed 13th April 2023 [4] FDIC.gov, Accessed 13th April 2023 [5] FDIC.gov, Accessed 13th April 2023 [6] FDIC.gov, Accessed 13th April 2023 [7] CFPB.gov, Accessed 13th April 2023
- The bipartisan composition of the FDIC Board, as designed to maintain balance and continuity, could impact future discussions on topics such as finance, business, and politics, as all current members are Republicans.
- Politically motivated decisions in finance and business may become more prominent due to the current political balance on the FDIC board, potentially impacting the general news landscape and regulatory oversight, which is essential for financial stability.
