FDIC Chair Martin Gruenberg to Resign Amid Scathing Workplace Investigation
FDIC Chair Martin Gruenberg announced his resignation following an independent investigation that exposed widespread sexual harassment, discrimination, and bullying within the agency responsible for regulating the banking sector.
“In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed,” Gruenberg stated on Monday. “Until that time, I will continue to fulfil my responsibilities as Chairman of the FDIC, including the transformation of the FDIC’s workplace culture.”
Gruenberg’s decision comes after Sen. Sherrod Brown, head of the Senate Banking Committee, called for new leadership. Having joined the FDIC board nearly two decades ago, Gruenberg has served as chair for almost 10 of the past 13 years.
President Joe Biden is expected to announce a nominee to lead the FDIC soon, according to White House Deputy Press Secretary Sam Michel, who emphasized the importance of a swift Senate confirmation. However, delays in confirmation processes are common, potentially extending beyond Biden’s term.
Gruenberg’s continued presence until a successor is appointed prevents Vice Chair Travis Hill, a Republican appointee, from automatically becoming chair. This avoids a potential deadlock within the FDIC’s board, which could stall significant banking regulations.
Michel expressed the administration’s gratitude for Gruenberg’s willingness to stay on during the transition, highlighting the importance of maintaining financial stability.
Sen. Tim Scott criticized Gruenberg’s decision to delay his resignation, accusing the administration of prioritizing political agendas over worker protection.
The FDIC’s decision to commission a report by Cleary Gottlieb Steen & Hamilton followed a Wall Street Journal investigation revealing a problematic culture. While the report did not single out Gruenberg for the agency’s issues, it documented several instances of him lashing out at subordinates, causing delays in delivering unfavourable news.
Gruenberg testified before lawmakers last week, accepting “full responsibility” for the report’s findings and acknowledging his failures in addressing the FDIC’s cultural issues sooner.
Most Democrats refrained from demanding Gruenberg’s immediate resignation but expressed outrage during hearings. Rep. Gregory Meeks and Sen. Elizabeth Warren voiced their frustrations, with Warren labelling calls for Gruenberg’s resignation a “purely political exercise” and emphasizing the importance of implementing the report’s recommendations.
The FDIC has declined to comment beyond Gruenberg’s statement.
