If President Joe Biden’s pick to head a top bank regulator talks like a cop and walks like a cop, she’s probably going to be a cop – and that’s making some bankers nervous. Christy Goldsmith Romero, nominated to lead the embattled Federal Deposit Insurance Corp., made her name in Washington as the watchdog for the massive bank bailout after the financial crisis, leading a scrappy agency of roughly 150 people who pursued bankers and Wall Street traders for fraud. Later this morning at her Senate confirmation hearing, Goldsmith Romero will vow to clean up an FDIC that has been reeling for months over revelations of a troubled and toxic workplace that led longtime Chair Marty Gruenberg to announce in May that he’d step down once a successor is confirmed. Goldsmith Romero will pledge “a complete overhaul of the FDIC’s workplace culture” to address “deep-seated cultural issues that have caused pain for many employees,” according to her prepared testimony. “It must not continue, and I would bring accountability.” Those workplace issues are likely to be front and center in the Senate Banking Committee hearing. But as lawmakers weigh Goldsmith Romero’s nomination, they’re also looking at someone with a record that suggests she’s gearing up to take on the banking industry itself. Her history is stirring concern among some bankers that the FDIC may be on the brink of a new enforcement-heavy era. As the special inspector general for the Troubled Asset Relief Program for 12 years, Goldsmith Romero teamed up with U.S. attorneys offices to build cases against the industry, leading to charges against more than 450 people and the recovery of $11 billion of taxpayer money. She sparred with Obama-era Treasury officials over access to bailout information and publicly castigated regulators for failing to spot financial crimes. And she pitched Congress on tougher laws against high-level bank executives and creating a new agency to police fraud. “She’s very long in enforcement experience and very short in banking experience,” said Cam Fine, the former head of Independent Community Bankers of America, which represents small lenders. Veteran banking lobbyist Ed Hill told MM that “many folks have concerns” about Goldsmith Romero policing the financial industry. “The FDIC historically hasn’t been an enforcement agency the way SIGTARP is or the CFTC,” where Goldsmith Romero is currently a commissioner, said Hill, a partner at Forbes Tate who previously worked for Bank of America and at a top industry lobbying group. “They are a supervisory agency with enforcement powers, and someone who comes in with an enforcement approach is certainly going to raise questions for the industry.” Goldsmith Romero’s backers see her experience as an enforcer and reformer as a highlight that will be much needed at the FDIC. “It might be the right person at the right time,” said one financial regulatory official, who was granted anonymity because they are not authorized to speak publicly. “Not just for the internal restructuring and clean slate you’re going to have to do internally at the FDIC, but, in a post-Chevron world, I do think you’re going to see enforcement and supervision in litigating these things as more important than maybe they were in the past.” Despite the alarms, Goldsmith Romero is not lacking support from the business community. The worlds of financial technology and cryptocurrency have thrown their weight behind her candidacy for the FDIC, as our colleague Zach Warmbrodt reported earlier this week. And the Digital Chamber, a trade group that represents crypto companies, sent a letter saying Goldsmith Romero’s nomination “signals a much-needed focus on digital assets.” Lawmakers have mostly signaled support for Goldsmith Romero. A wide range of Democrats, including Senate Banking Chair Sherrod Brown of Ohio, Sen. Elizabeth Warren of Massachusetts and Sen. John Fetterman of Pennsylvania, have cheered her selection since the White House’s announcement last month. She’s also won tentative praise from more moderate corners of the party, including Sen. Jon Tester of Montana. Sen. Mark Warner told our Eleanor Mueller that he plans to introduce Goldsmith Romero, a fellow Virginian, at the hearing on Thursday. So far, only one Republican — Sen. Bill Hagerty of Tennessee — has publicly criticized the pick. Republicans on the Senate Banking panel are planning to focus on the fallout from the FDIC workplace scandal and scrutinize whether Goldsmith Romero and other nominees “will stay true to the important mandates of our financial regulators or follow in the administration’s footsteps to pursue a liberal agenda outside the scope of their authority,” a spokesperson for Ranking Member Tim Scott said in a statement. Sen. John Kennedy of Louisiana, who has called for legislation to make it easier for former FDIC employees to sue the agency, told Eleanor that he wants to hear how Goldsmith Romero plans to “clean up the mess” at the agency and whether “she’s gonna fire somebody.” IT’S THURSDAY. You can ping Declan at dharty@politico.com and Michael at mstratford@politico.com. As always, you can find our usual MM host, Sam Sutton, at ssutton@politico.com and @samjsutton.
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