Sheila Bair, Chairman of the Federal Deposit Insurance Corp., is stepping down amidst speculation she's headed for another top spot in the federal government.   She announced that she will leave her post on 7/8, ending a five-year term in which she helped craft the government's response to the 2008 financial crisis.  Bair was among the first officials to raise concerns about the explosion in high-risk lending to borrowers with bad credit. 

Under her watch, the agency closed more than 350 banks since the crisis peaked in late 2008.  FDIC's number 2 official, Martin Gruenberg is widely expected to succeed her.   [AP, WSJournal, 5/9/11]

        Speculated Move to Consumer Protection Agency.   Sheila Bair's departure fueled further speculation that she is next in line to become chief of the new consumer protection agency - housed in the Federal Reserve - that was created under the Dodd-Frank Reform Act. 

Currently, Elizabeth Warren is the de facto head of the Consumer Financial Protection Bureau, having "assumed" office on 9/17/10.  In actuality, Ms. Warren serves as Assistant to President Obama and as Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau.  

 Sen. Christopher Dodd has been lobbying for Ms. Bair to lead the Agency.  He reportedly approached FDIC Chairman Bair in recent days to gauge whether she'd be interested in running the new consumer-protection agency.  Senator Dodd believes that Ms. Bair a nominee who might win confirmation in the Senate;  it would be Mr. Dodd's job to move the nominee through a preliminary vote on his committee and then defend the person's record on the Senate floor.

Many consumer groups, labor unions and liberal Democrats are pushing the White House to nominate Harvard Law Professor Elizabeth Warren, who is credited with coming up with the idea of the consumer agency.  Mr. Dodd, however, has publicly expressed reservations about whether Ms. Warren could garner the 60 votes needed to win Senate confirmation.  White House officials have said she is "confirmable."

Yet, people familiar with Sheila Bair say that the FDIC Chairman told Senator Dodd she wasn't interested.  Ms. Bair is widely expected to leave the government when her term at the FDIC expires next year.  Ms. Bair isn't on the White House's short list of candidates, which includes Ms. Warren, Treasury Department Assistant Secretary Michael Barr, and Justice Department official Gene Kimmelman.   [Huffington Post, 5/9]