WASHINGTON–The FDIC is seeking comment on its draft strategic plan for 2018-22 and credit unions will find many of the issues identified by the agency that regulates banks look familiar. Separately, the president has also nominated a new FDIC chairman.
In releasing its plan for comment, the FDIC noted banks face new challenges in the interest rate environment and from new competition. Comment on NCUA’s proposed strategic plan, as well as its advertising proposal, are due today.
“Some banks have responded to this environment by investing in longer-term or higher-risk assets,” according to the FDIC’s draft plan. “In some cases, banks may be entering unfamiliar business lines or offering new products to increase profitability. The industry must manage interest-rate risk, liquidity risk, and credit risk carefully to remain on a long-run, sustainable growth path,” the plan states.
The challenges outlined in the draft plan include:
- Future of Community Banking. The FDIC said community bankers are concerned about their competitive position against larger banks.
- Large, Complex Financial Institutions. The FDIC pointed out that assets within the banking industry are concentrated in a small number of large, complex financial institutions where it is “difficult for the management of these companies to fully understand and manage their risks.”
- Cybersecurity: Cybersecurity continues to grow as a threat, the FDIC said.
- Economic Inclusion. The FDIC noted that more than 25% of U.S. households do not have an account at an insured FI or obtain financial services and products from alternative, nonbank financial firms.
- Workforce Management and Development. Internally, the FDIC reported that much of its current workforce will retire over the next decade, even as the need for employees with advanced technical skills continues to increase.
The comment deadline is Dec. 15.
Separately, President Donald Trump plans to nominate Jelena McWilliams to serve as the next chairman of the Federal Deposit Insurance Corp. (FDIC), according to a statement from the White House. McWilliams is currently the top general counsel with Fifth Third Bancorp, a position she has held since January, and still must go before the Senate for confirmation.
McWilliams is being nominated to serve the remainder of a six-year term on the FDIC board that expires July 15, 2019, and as chairperson for five years.
Martin Gruenberg, the current FDIC chairman has said he will serve in the job until a successor is nominated and approved. Gruenberg has resisted some pressure from the Trump Administration to roll back financial regulations. Gruenberg has not said whether he will continue to serve as a board member until the end of his six-year term in December 2018.
An earlier nominee for the FDIC chairmanship, James Clinger, withdrew his name from consideration in July after citing family issues.
McWilliams had previously served as a Senate staffer beginning in 2010, and then served in the Senate as senior counsel to Republican Senator Richard Shelby, who at the time was the chairman of the Banking Committee. McWilliams also spent three years as an attorney for the Federal Reserve Board of Governors.