WASHINGTON–Sen. Elizabeth Warren (D-MA), who is the ranking member of the Senate Banking, Housing and Urban Affairs Committee, has sent a letter to the acting director of the FDIC seeking to know if Elon Musk’s Department of Government Efficiency’s (DOGE) access to sensitive information and cuts at the agency might imperil the safety of bank deposits.
Separately, the FDIC joined with the Fed in withdrawing a joint statement on crypto-assets.
Warren was joined on the letter by Banking Committee Sens. Raphael Warnock (D-GA), Chris Van Hollen (D-MD), and Lisa Blunt Rochester (D-DE).
“DOGE’s track record of indiscriminately dismantling critical government agencies suggests that its presence at the FDIC could cause an uptick in bank failures by slashing staff at this severely understaffed agency; allow DOGE employees and affiliates to access highly-sensitive confidential supervisory and investigative information; threaten the $137 billion Deposit Insurance Fund; and cripple the agency’s ability to administer our nation’s deposit insurance system and resolve failed banks in an orderly manner,” the letter reads.
Additional Requests
Already facing staffing issues, the letter further seeks to know how DOGE’s latest across-the-board 20% staff cut potentially exacerbates the problem and could threaten the integrity of deposit insurance.
“The Senate confirmed you as Vice Chairman of the FDIC, a position independent of the White House, and you assumed the role of Acting Chairman pursuant to the statutory line of succession written by Congress,” the senators’ letter reads. “No one nominated or confirmed DOGE employees or Elon Musk to run the FDIC, and nowhere in the statute does it permit you to cede your statutory authority to Elon Musk or representatives from the White House.”
The senators are asking for a response by May 8th.
Statements Withdrawn
Separately, the FDIC and the Federal Reserve said they are withdrawing two joint statements regarding banking organizations’ crypto-asset-related activities.
“This action is intended to provide clarity that banking organizations may engage in permissible crypto-asset activities and provide products and services to persons and firms engaged in crypto-asset related activities, consistent with safety and soundness and applicable laws and regulations,” the agencies said.
The withdrawn joint statements, which were issued on Jan. 3, 2023 and Feb. 23, 2023, addressed crypto-asset risks and liquidity risks to banking organizations resulting from crypto-asset market vulnerabilities.
The agencies, along with the Office of the Comptroller of the Currency, said they are exploring issuing additional clarity with respect to banking organizations’ crypto-asset and related activities in the coming weeks and months.
