Federal Deposit Insurance Corp. Chairman Martin Gruenberg vowed Wednesday to skeptical lawmakers that he would address not just his own conduct, but also deep cultural problems at his agency.
But lawmakers expressed doubts about whether the banking supervisor, who has held leadership roles at the agency for nearly two decades and has been the subject of employee complaints about his temperament, is qualified for the job. .
Gruenberg, who testified for several hours before Congress, regretted missing out on the independent report detailing widespread sexual harassment and other problems and for being displeased with his subordinates. But he was adamant that he intended to stay in the agency and see change come to fruition.
“It is my duty to be more sensitive to how my actions are perceived by my employees and to understand that it is only their perception, not mine, that matters,” he says, adding, Course added that he was going to do anger management later.
Mr. Gruenberg faced constant criticism from Republicans and Democrats, who expressed anger, disappointment and disbelief at the depth of the FDIC’s problems. Following the Wall Street Journal revelations in November, hundreds of employees reported abuse to their hired outside law firm.
But while Republicans were quick to demand that Gruenberg resign or be removed by President Biden, Democrats were more cautious. They expressed frustration with the agency’s woes and Mr. Gruenberg’s management, but said they wanted to give him a chance to fix them.
It was clear that Gruenberg was expected to show improvement at the agency.
“I’m not satisfied with your response regarding your plan to ensure that FDIC employees are not exposed to similar situations,” said Rep. Nydia Velazquez, D-New York. She wrote, “I have serious doubts about your confidence in your ability to change the culture of the FDIC and continue to lead the FDIC.”
The Biden administration’s efforts to impose stricter rules on the banking sector are closely tied to Gruenberg’s ability to remain at the FDIC. If he resigns, the agency will be stuck with two Republican and Democratic board members, with Republican Vice Chairman Travis Hill taking the helm.
The FDIC is working with the Federal Reserve and the Office of the Comptroller of the Currency on several pending regulatory projects, most notably overhauling the way banks measure risk, which would significantly increase capital requirements for large banks. This is a drastic effort to reconsider the situation.
Gruenberg said he accepted all of the independent review’s recommendations, including hiring a monitor to track the agency’s culture reform and third-party experts to assist with that project. He also said the agency would create a new independent bureau with professional responsibilities.
Gruenberg said the agency will pay close attention to the 70 field offices where some of the most egregious incidents have been reported.
“We have a lot of work to do,” he said.
