Senator Elizabeth Warren is sounding the alarm on cuts to Federal Deposit Insurance Corporation (FDIC), writing in a letter that the hiring freeze and decision to rescind 200 job offers to examiners has the potential to disrupt the “stability of the banking season.”
Warren, a Democrat from Massachusetts, raised her concerns in a letter addressed to the FDIC’s Inspector General Jennifer Fain that was co-signed by Sen. Raphael Warnock, D-Ga., Sen. Chris Van Hollen, D-Md., and Sen. Lisa Blunt Rochester, D-Del, according to CNBC. It comes in response to Elon Musk and President Donald Trump’s efforts to gut the federal workforce, which the Senator said could have catastrophic affects on banking and leave Americans vulnerable.
In the note, Warren said the agency’s short-staffing contributed to the collapse of Signature Bank in 2023, an event she fears could repeat elsewhere without a robust FDIC.
The dearth of examiners at the FDIC “led to a series of supervisory delays, canceled or postponed exams, and quality control issues in the supervision of Signature,” Warren wrote, according to CNBC (CMCSA+0.29%).
“The lesson learned in this case was that a shortage of cops on the beat can threaten the safety and soundness of the banking system and pose risks to the Deposit Insurance Fund,” she said.
Warren had a similar message last month, tweeting “The FDIC should explain why it’s now axing even more examiners whose job it is to make sure big banks don’t crash our economy.”
The Massachusetts Senator has also raised alarms about the recent gutting of the Consumer Financial Protection Bureau (CFPB) — an agency that was created as a result of her 2007 proposal — after Trump’s acting director Russel Vought ordered to freeze almost all of the agency’s work.
In remarks Monday at the CFPB’s headquarters, Warren said that “Donald Trump ran his campaign on lowering costs for working families … now he and his co-president, Elon Musk, have tried to shut down the agency that has delivered $21 billion to hardworking families.”
Warren also said it was Congress that “built” the CFPB. “No one other than Congress — not Donald Trump, not Elon Musk, no one – can fire the financial cops.”
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