North Charlotte Today

Senator Thom Tillis, alongside his Republican colleagues on the Senate Banking Committee, has urged Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg to withdraw new corporate governance and risk management guidelines. The senators argue that these guidelines would harm the safety and soundness of the U.S. financial system.

“We write to you today regarding the Federal Deposit Insurance Corporation (FDIC)’s notice of proposed rulemaking and issuance of guidelines entitled ‘Guidelines Establishing Standards for Corporate Governance and Risk Management for Covered Institutions with Total Consolidated Assets of $10 Billion or More’ (the Proposal). Specifically, we are concerned that the rulemaking contains a multitude of issues and flaws that collectively will hinder, not improve, safety and soundness within the U.S. financial system,” stated the letter from the senators.

The letter emphasized that "Safety and soundness is the cornerstone regulatory principle of the U.S. banking system." It cited past banking failures, particularly Silicon Valley Bank (SVB), as evidence that ineffective risk management by financial institutions paired with insufficient supervision by regulators can lead to significant hazards. The senators expressed concern that the new FDIC proposal would move away from clear accountability standards necessary for both bank management and regulators.

“While we agree that sound corporate governance is a necessity, the Proposal represents a significantly flawed approach to prudential regulation that seeks to micromanage Board affairs in a manner that will inject unnecessary uncertainty in key bank management activities," they wrote. "It will unduly burden banks that serve and operate in small and rural communities. And, perhaps most concerningly, the Proposal lacks consensus support among FDIC leadership, is out of step with other prudential regulators, and actively opposed by state supervisors."

The letter was signed by Senator Tillis along with Senate Banking Committee Ranking Member Tim Scott (R-SC) and Senators Mike Crapo (R-ID), Mike Rounds (R-SD), John Kennedy (R-LA), Bill Hagerty (R-TN), Cynthia Lummis (R-WY), J.D. Vance (R-OH), Katie Britt (R-AL), Kevin Cramer (R-ND), and Steve Daines (R-MT).

According to their analysis, 92% of comments received during the proposal's Notice and Comment period either opposed it entirely or raised substantial concerns.

Full text of the letter is available HERE.