Bonan also asserts that the FDIC’s administrative law judges and leadership structure are unconstitutionally insulated from presidential oversight due to tenure protections, echoing similar arguments that led to the Supreme Court invalidating tenure protections at agencies like the Consumer Financial Protection Bureau.
FDIC’s Decision and Bonan’s Defense
The FDIC’s sanctions stem from a 2021 administrative proceeding accusing Bonan of exposing the Illinois bank to risk through a $1.25 million loan intended to assist a struggling oil-drilling client nearly a decade ago. Bonan has denied any misconduct, labeling the FDIC’s findings as factually unsupported.
While the FDIC agreed in a December 30 order to pause the fine, it declined to stay its prohibition on Bonan’s work in the banking industry, which was set to take effect on January 16. Bonan argued that the ban would cause “irreparable harm,” damaging his career, reputation, and ability to support his family.
Next Steps and Broader Implications
Bonan’s case is part of a growing push to challenge the constitutionality of in-house enforcement proceedings used by agencies like the FDIC. The outcome could have significant implications for regulatory practices across federal agencies.
