With a broad smile and crisply delivered answers, Christy Goldsmith Romero, President Biden’s nominee to take over the Federal Deposit Insurance Corporation, appeared to cruise through her Senate confirmation hearing on Thursday.
Ms. Goldsmith Romero’s testimony, before the Senate Banking Committee, is the first step in a process that could put her in charge of the regulator that oversees smaller banks, administers the fund that protects bank depositors’ cash and steps in when a bank fails; it was recently roiled by revelations of widespread sexual harassment and abuse of junior employees by their longtime managers.
Over the course of the hearing on Thursday, Ms. Goldsmith Romero’s testimony drew praise not only from Democrats but also from some Republicans, suggesting that she was likely to be confirmed for the position.
Ms. Goldsmith Romero is a lawyer who, after the financial crisis, spent more than 12 years in an office created by Congress to investigate fraud and other misconduct by banks that received money from the government’s roughly $450 billion crisis rescue package. Her work exposing fraud often put her at odds with not only bankers but also some government officials who were concerned about the potential damage it would do to overall public opinion of the bailout.
She fielded questions on Thursday about whether she had enough experience to lead the F.D.I.C. and heal its culture, and what she would do about a hotly contested proposal by bank regulators to increase capital requirements on the biggest banks. She was also asked about how she would handle writing rules for banks given the Supreme Court’s recent ruling that removed a protection for federal regulators from legal challenges.
In the weeks leading up to the hearing, Republican lawmakers complained about various aspects of Ms. Goldsmith Romero’s candidacy. Many called for the current F.D.I.C. chair, Martin Gruenberg, a Democrat, to resign immediately and let the agency’s vice chair, Travis Hill, a Republican, take over. The highest-ranking Republican on the committee, Senator Tim Scott of South Carolina, reiterated that position on Thursday and questioned Ms. Goldsmith Romero’s qualifications for the role.
But other Republicans appeared satisfied with her responses. Mike Rounds of South Dakota asked Ms. Goldsmith Romero how she would proceed with proposed capital rules for big banks that have drawn criticism not only from banks but also from housing and racial justice groups. She responded by aligning herself with Jerome Powell, the Federal Reserve chair, who said on Tuesday that the rules needed significant revision.
“I’m not looking to get something done fast, I’m looking to get something done right,” she said.
Senator Rounds also asked about Ms. Goldsmith Romero’s potential approach to writing new rules given the Supreme Court’s ruling that overturned what’s known as the Chevron deference precedent, which had compelled courts to defer to federal regulators’ interpretations of laws. He raised a law passed during the Trump administration that eased restrictions on some banks, and which critics blamed for the failures of three midsize banks last year. Regulators under President Biden have sought to tweak the rules written by Trump appointees to expand capital requirements to a wider swath of banks.
“I really believe that we are limited as regulators to the laws that are before us and we always strive to look at Congressional intent,” Ms. Goldsmith Romero said. The Trump-era rule is “the law of the land, I’m going to comply with it. I really believe in the sentiments behind it in terms of tailoring regulation as we talked about, all banks are not the same, and also I really want to understand the unintended consequences of these rules.”
She promised to consult Congress whenever she was unsure of the intent of a law.
Ms. Goldsmith Romero appeared alongside three other nominees for financial regulatory positions, including Kristin N. Johnson, a current Commodity Futures Trading Commission member who has been chosen to be the Treasury assistant secretary for financial institutions. There was a lighthearted tone to the hearing. Family members of the nominees were in the audience. A pick for the Financial Stability Oversight Council, Gordon I. Ito, shared his vacation plans in response to a question from the committee’s chairman, Sherrod Brown, a Democrat from Ohio.
Several committee members asked Ms. Goldsmith Romero how she would swiftly repair the F.D.I.C.’s culture. She said she would institute a new process for employee complaints that would send them to the Equal Employment Opportunity Commission to handle, and would fire anyone who had been found to be harassing or abusing employees.
“You’re either going to do it or you’re not, but we’re going to be watching,” said John Kennedy, a Louisiana Republican. “Every time the F.D.I.C. comes before the banking committee, I’m going to ask you about progress, with specificity.”
Republican acceptance was not the most important thing, however. Even before the hearing began, Ms. Goldsmith Romero knew she had the backing of Senator Mark Warner of Virginia, a moderate Democrat on the panel who can sometimes be the deciding vote in a razor-thin Democratic majority.
In her prepared remarks, she thanked Senator Warner for his “gracious words and support.”