Warren Presses FDIC on DOGE Access to Bank Data, Staffing Cuts

Senate Democrats led by Elizabeth Warren want more information about what Elon Musk’s Department of Government Efficiency is up to at the Federal Deposit Insurance Corp.

Cutting jobs at the FDIC may hinder its ability to supervise banks and take them apart when they fail, Warren and three of her Senate colleagues said in a Thursday letter to acting FDIC Chairman Travis Hill obtained by Bloomberg Law. DOGE’s access to sensitive supervisory, investigative, and other bank data also poses significant risks, they warned.

“Federal deposit insurance is a fundamental safeguard that underpins the public’s confidence in the U.S. banking system,” the letter said. “Allowing the Elon-Musk-led DOGE to degrade it in a moment of broader economic turmoil is deeply concerning.”

Warren (Mass.) is the ranking Democrat on the Senate Banking Committee. Democratic Sens. Raphael Warnock (Ga.), Lisa Blunt Rochester (Del.), and Chris Van Hollen (Md.) joined Warren on the letter.

The FDIC declined to comment.

Musk’s DOGE team arrived at the FDIC earlier this month but didn’t request and wasn’t granted access to “sensitive bank information,” according to an internal email from Dan Bendler, the agency’s chief operating officer and a deputy to Hill, previously obtained by Bloomberg Law.

The FDIC insures US bank deposits up to $250,000 and manages the $137 billion Deposit Insurance Fund. It is responsible for safely winding down banks when they fail and directly supervises thousands of banks around the country, including many community lenders.

DOGE’s arrival at the FDIC followed its appearance at other financial regulators including the Consumer Financial Protection Bureau, where Musk’s team gained access to internal data and spurred contract cancellations and job cuts.

‘Problem Bank’ List

Warren and her colleagues are seeking detailed information beyond Bendler’s assurances about the safety of bank data, citing concerns about information such as a “problem bank” list the FDIC maintains.

When released to the public, the FDIC provides only the number of banks on its list, but DOGE could have access to the banks’ names and their financial data, the letter said.

“The careless disclosure of this information could have serious consequences for the safety and soundness of banks, and the misappropriation of this information could permanently undermine the credibility of the FDIC,” the senators wrote.

Job Cuts

Soon after DOGE’s arrival, the FDIC said in an internal email that it was seeking an overall cut of about 1,200 positions at the agency. Around 500 people had previously accepted the Trump administration’s deferred resignation program offer, and that total will count toward the overall staff reduction, the email said.

But the FDIC is already understaffed, the senators said in their letter.

Following the failure of Signature Bank in 2023, the FDIC’s chief risk officer found that an average of 40% of large bank examiner positions since 2020 were either vacant or held by temporary staff, Warren and her colleagues noted in the letter.

Reducing staff would potentially make it harder for the FDIC to supervise the 4,500 banks for which it is the primary or backup examiner, the senators said. It also could make the work of resolving a failed bank more difficult to complete, potentially jeopardizing depositors’ ability to get fully reimbursed up to $250,000 when a bank fails, they warned.

“DOGE’s efforts to slash the FDIC’s staff may not only lead to more bank failures, but could threaten the very integrity of deposit insurance and the bank resolution framework itself,” the letter said.

The FDIC in its email informed employees that resolution, examination, and information security teams wouldn’t be touched by the coming job cuts.

Warren and her colleagues sent Hill 12 questions, including about the identities of DOGE staff members at the FDIC, whether they’ve gone through appropriate background and conflict checks, and what access they have to bank information.

They also asked whether Hill has final say on the cancellation of any contracts recommended by DOGE, among other questions.