The most powerful Democrats in Congress on banking and financial issues on Monday called on President Biden to replace the chairman of the Federal Deposit Insurance Corporation, calling it dysfunctional and calling for “fundamental changes to the FDIC.” ” was necessary.
Sen. Sherrod Brown (D-Ohio), chairman of the Senate Banking Committee, criticized Chairman Martin Gruenberg following a damning report on the FDIC’s toxic workplace culture earlier this month.
Gruenberg took some of the blame in testimony at a Congressional hearing last week, but insisted he could turn the agency around.
“After chairing last week’s hearing, reviewing the independent report, and receiving additional support from FDIC staff to the Banking and Housing Committee, I came to one conclusion: That means change is needed,” Brown said Monday.
Until Monday, no Democratic senators had called for Mr. Gruenberg to be replaced, although several came close to doing so in their own statements. Brown’s comments are likely to prompt other Democrats to call for Gruenberg’s removal from office.
In his statement, Brown did not call for Gruenberg’s firing. He is in the middle of a six-year term as FDIC chairman, and if Gruenberg steps down, Republican Vice Chairman Travis Hill will lead the agency. Brown instead called on President Biden to nominate a new FDIC chair “without delay” and then have the Senate confirm him.
Republicans have long called for Gruenberg’s resignation. During Thursday’s hearing, Sen. Tim Scott (RS.C.) spoke. The committee’s top Republican detailed several stories of female FDIC employees outlining extreme harassment and stalking by her colleagues, complaints dismissed by her superiors, according to the report. Stated.
“Marty, you heard me tell you directly, you should quit,” Scott said. “Your employees don’t trust you. And this is not a single incident. This spans more than a decade of your leadership at the FDIC.”
Scott, who called for Gruenberg’s resignation in December when the first allegations were made public, is now asking the Banking Committee to hold another hearing on workplace issues at the FDIC.
Mr. Gruenberg has served in various levels of leadership at the FDIC for nearly 20 years, and this is his second term as FDIC Chairman. An independent report outlining the agency’s problems said he was primarily responsible for the agency’s toxic working environment due to his long tenure at the agency’s highest levels of power.
Report released on Tuesday Law firm Cleary Gottlieb Steen & Hamilton has cited more than 500 complaints from employees citing incidents of stalking, harassment, homophobia and other violations of work rules.
Among the complaints were women who said they were stalked by a co-worker and continued harassment after complaining about their co-worker’s behavior. A field office supervisor calls a gay man a “little girl.” The female scene investigator said she received a photo of the FDIC senior investigator’s private parts.
The FDIC is one of several banking system regulators. The Great Depression-era government agency is best known for running the nation’s deposit insurance program, which insures Americans’ deposits up to $250,000 in the event of a bank failure.
Sheila Baer, who chaired the FDIC during the 2008 financial crisis and was one of the government’s most prominent voices at the time, tweeted Monday that it was in the best interest of the FDIC for Gruenberg to resign. Posted.
“This controversy is damaging to him and his agency. For the sake of himself and all of the FDIC, he should announce his intention to resign upon appointment,” she said.
