Senate Banking chief calls on Biden to replace FDIC chair after sexual harassment probe

Senate Banking Committee Chairman Sherrod Brown (D-Ohio) on Monday called on President Biden to replace the chairman of the Federal Deposit Insurance Corporation (FDIC) following reports of a toxic work environment at the agency.

Mr. Brown is the most senior Democrat to seek the resignation or replacement of FDIC Chairman Martin Gruenberg, the Democrat whom Mr. Biden nominated to lead the major banking regulator.

“After chairing last week’s hearing, reviewing the independent report, and receiving additional support from FDIC staff to the Banking and Housing Committee, I am left with one conclusion,” Brown said in a statement. “Fundamental changes are needed at the FDIC.”

“These changes start with new leadership. They must fix the agency’s toxic culture and put the women and men who work there and their mission first,” he continued. “That is why I am calling on the President to immediately nominate a new chairman who can lead the FDIC during this difficult time, and for the Senate to act on that nomination without delay.”

The Hill has reached out to the White House for comment.

Mr. Brown’s appointment to replace Mr. Gruenberg marks a major change for the Senate Banking Committee chairman. He previously urged Gruenberg, along with other Democrats, to make changes at the agency rather than resign.

Some Democrats have called for the FDIC chairman to resign, but most of the pressure has come from Republicans.

Both sides have accused each other of political gamesmanship, with Republicans claiming Democrats rejected calls for Gruenberg to resign because it would undermine Biden’s regulatory agenda.

Similarly, Democrats accuse their Republican colleagues of failing to recognize that problems existed under previous Republican leadership of the FDIC and of trying to gain veto power over Biden’s policy-making efforts. did.

“All Banking and Housing Committee and Senate leaders from both parties are committed to this effort to put politics aside and bring new leadership to our agencies to ensure safe workplaces for the women and men who protect our financial system. We look forward to participating,” Brown added on Monday.

Gruenberg has faced criticism for months following a bombshell report in the Wall Street Journal last fall that documented a culture of sexual harassment, misconduct and retaliation at the FDIC.

An investigation by the law firm Cleary Gottlieb Steen & Hamilton, which released its findings earlier this month, largely confirmed the magazine’s report and led to a new investigation into Mr. Gruenberg.

Updated at 10:56 a.m. EDT.