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Trump's FDIC Nominee Withdraws in Setback for Administration

Updated on
  • James Clinger cites family obligations as reason for his move
  • White House faces opening after filling key regulator roles

President Donald Trump’s nominee to be chairman of the Federal Deposit Insurance Corp. withdrew his name from consideration on Wednesday, citing family obligations.

James Clinger, the former chief counsel of the House Financial Services Committee, was chosen last month to replace Martin Gruenberg as head of the agency. His withdrawal, announced in a statement, marks a setback for the Trump administration, which on Monday made its last pick for a top bank regulation post when Randal Quarles was named as the choice to be the Federal Reserve’s vice chairman for supervision.

“I am deeply grateful to President Trump for nominating me,” Clinger said in the statement. “It is therefore with a sense of regret that I have asked the White House to withdraw my nomination. I did so after concluding that the family-related obligations that prompted me to leave government service earlier this year -- which have grown more challenging in the interim -- are incompatible with the demands of leading an important federal agency.”

Clinger’s withdrawal was confirmed by a White House spokeswoman.

The loss of Clinger could delay the Trump administration’s strategy for rolling back aspects of the 2010 Dodd-Frank Act. The White House had hoped that its nominees -- Quarles at the Fed, Joseph Otting for Comptroller of the Currency and Clinger at the FDIC -- could combine forces to start addressing Wall Street complaints over post-crisis rules.

The FDIC is one of the three federal regulators of U.S. banks, overseeing many of the smaller institutions that aren’t members of the Fed. Its other chief role is to maintain an insurance fund that protects bank deposits. The Dodd-Frank provisions the FDIC is partly responsible for include the Volcker Rule ban on banks trading with their own capital, powers that allow regulators to wind down troubled firms and annual living wills that lenders must submit on how they would be dismantled in a failure.

Clinger has spent most of his career in congressional staff jobs, where he’s worked on legislation involving the finance industry. 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. More recently, Clinger worked for House Financial Services Committee Chairman Jeb Hensarling, who sponsored legislation that would rip up much of Dodd-Frank.

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