Sheila C. Bair will step down as chairman of the Federal Deposit Insurance Corp. this summer, ending a five-year term in which she played a central role in fashioning the government’s response to the 2008 global financial crisis.
Mrs. Bair will leave her post as one of the government’s top bank regulators July 8, the FDIC said Monday.
She was among the first officials to raise concerns about the explosion in high-risk lending to borrowers with bad credit. Under her tenure, the agency closed the most banks since the savings and loan crisis, including Washington Mutual, the largest bank failure in U.S. history.
Mrs. Bair, 57, was appointed by President George W. Bush in 2006. Within a year, she moved to shut down Santa Monica, Calif.-based Fremont Investment & Loan. The bank had been a major player in the troubled home-mortgage business, doling out high-interest loans to people with poor credit records or low incomes. It was the first of 365 banks closed during her time leading the agency.
Mrs. Bair also advocated for consumers and small banks during the financial crisis. She was among the earliest to flag the impending foreclosure crisis. After the housing bubble burst, she argued unsuccessfully for the government to force banks to reduce monthly payments for troubled homeowners.
Mrs. Bair often disagreed with members of the Bush and Obama administrations, as well as industry executives and other regulators.
Her reputation for taking on large banks was cemented during last year’s debate over the financial regulatory overhaul. Mrs. Bair pushed for a policy to wind down the biggest financial companies whose failure threatened the broader financial system. She fought successfully to have the FDIC run that process.
By Douglas Holtz-Eakin
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