U.S. Senator Elizabeth Warren and her colleagues have raised concerns with the Federal Deposit Insurance Corporation (FDIC) regarding defense measures for bank deposits amid actions by the Department of Government Efficiency (DOGE), led by Elon Musk. They are concerned that DOGE's influence may jeopardize the FDIC’s operations during a sensitive economic climate.
“Federal deposit insurance is a fundamental safeguard that underpins the public’s confidence in the U.S. banking system. Allowing the Elon Musk-led DOGE to degrade it in a moment of broader economic turmoil is deeply concerning,” the Senators stated.
The letter, coordinated by Senator Warren, was addressed to the FDIC's Acting Chairman Travis Hill. It outlines worries about DOGE’s potential influence on the FDIC, including changes in staffing and access to sensitive information which are crucial for preventing bank failures and securing deposit insurance.
U.S. Senators Rev. Raphael Warnock, Chris Van Hollen, and Lisa Blunt Rochester, all co-signers, supported the letter's claims. They argue that DOGE's indiscriminate approach could lead to an increase in bank failures. “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 Senators wrote.
The group highlighted a concern that recent staff reductions at FDIC, linked to DOGE's oversight, might threaten the stability of deposit insurance systems. They stressed that the Acting Chairman's statutory duties should not be deferred to unaffiliated entities such as DOGE or Elon Musk. “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. 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 letter conveyed.
In this communication, the Senators have requested detailed responses from the FDIC by May 8th regarding DOGE's operational role and influence within the agency.