The outgoing head of the Federal Deposit Insurance Corp. warned Thursday that government oversight of a still fragile financial system could be weakened unless people are named quickly to fill several vacant positions at the top of regulatory agencies.
Sheila Bair, the FDIC chairman, told a House hearing that she has "profound concerns" over vacancies at the FDIC, the new Consumer Financial Protection Bureau, the Treasury Department, the Federal Housing Finance Agency and other agencies.
"I think that this is very urgent, where the financial system is healing but it's not out of the woods yet," she said. "There are a lot of unknown factors out there. We need strong people in these jobs."
Bair is leaving in early July; the White House hasn't yet nominated a successor. There is a political standoff over the new consumer protection bureau: Almost every Senate Republican has said they will vote against any Obama administration choice to head the agency unless changes are made to reduce its power.
And President Barack Obama's nomination of a Nobel prize-winning economist to sit on the Federal Reserve has been blocked by Republicans.
Rep. Shelley Moore Capito, R-W.Va., who heads the House Financial Services subcommittee on financial institutions, said at the hearing she has a message for Obama: "Get these appointments out. ... Let's have some stability here."
Bair blamed the White House and the Senate. "I have profound concerns," she said. "And I am frustrated that there is not greater urgency and prioritization of this issue on the administration's part as well as the Senate's part."
Bair said she was especially "worried" about the FDIC, whose five-member board could shrink to two or three members after her departure. Vice Chairman Martin Gruenberg, one of the board members, is considered a likely candidate to succeed Bair. He will become the acting FDIC chairman if the administration doesn't appoint a replacement before she leaves.
Board member John Walsh is the acting comptroller of the currency; a permanent head of the Treasury office that oversees national banks hasn't yet been nominated. Another board member, John Bowman, is acting director of the Office of Thrift Supervision _ which will be abolished in July in accordance with the financial overhaul enacted last year.