The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) today approved its operating budget for 2019.  The budget reflects a decrease in both expenditures (down 2.3%) and headcount (down approximately 3%).  The FDIC’s budget memorandum explains that these changes reflect, among other things, consolidation in the industry and a decrease in the frequency of examinations for small banks, which have both contributed to a reduction in the FDIC’s workload.

Against this background, the FDIC’s decision to add staff in specific areas is of particular interest, and helps shed light on the agency’s priorities over the coming year.  Among other things, the FDIC is:

  • adding 23 IT examiner and specialist positions to augment its IT examination workforce; and
  • adding a further 23 positions in its large bank supervision team, responsible for supervising banks with over $10 billion in assets.

The FDIC’s budget memorandum explains that the proposed addition of 23 IT examiners reflects the “growing complexity, interconnectedness, and operational and cybersecurity risk posed to the financial system by technology service providers.”  And, in an accompanying statement, FDIC Chair Jelena McWilliams indicated that the additional large bank supervision positions are intended to keep up with the growth in the number of large banks supervised by the FDIC.

In addition to focusing resources on examining the IT infrastructure of supervised banks, the FDIC also intends to invest in a number of internal initiatives to improve its own IT capabilities and invest in cybersecurity.

Photo of Nikhil Gore Nikhil Gore

A member of the international arbitration and financial institutions practices, Nikhil V. Gore represents sovereign states and U.S. and global firms in international treaty-based and commercial disputes. He also regularly represents U.S. financial institutions, and the U.S. branches and affiliates of foreign financial…

A member of the international arbitration and financial institutions practices, Nikhil V. Gore represents sovereign states and U.S. and global firms in international treaty-based and commercial disputes. He also regularly represents U.S. financial institutions, and the U.S. branches and affiliates of foreign financial institutions, in investigations and inquiries involving the Federal Reserve, OCC, FDIC, CFPB, and state banking regulators.

Mr. Gore has served as counsel in investment and commercial arbitrations spanning several industries and a variety of regions, including Asia, Eastern Europe, North America, and Southern Africa. Additionally, he has expertise in the law of the sea, and was part of the Covington team that secured an order from the International Tribunal for the Law of the Sea, which required Russia to release three Ukrainian naval vessels and twenty-four servicemen detained in the Black Sea in 2018.

In his financial institutions practice, Mr. Gore has experience with enforcement actions and investigations relating to the Bank Secrecy Act, the federal criminal money laundering statutes, the full range of safety and soundness issues (including, in particular, supervisory reviews of bank control functions), and fair lending and consumer compliance. Mr. Gore is a regular contributor to the firm’s financial services blog.