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Jimmy Williams
Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg announced his resignation on Monday following a damning probe that revealed a pervasive culture of sexual harassment and discrimination within the agency. Gruenberg stated that he would continue to serve until a successor is confirmed.
“In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed,” Gruenberg said. “Until that time, I will continue to fulfill my responsibilities as Chairman of the FDIC, including the transformation of the FDIC’s workplace culture.”
Deputy White House Press Secretary Sam Michel indicated that President Joe Biden would nominate a new FDIC Chair soon. “The President will soon put forward a new nominee for FDIC Chair who is committed to those values and to protecting consumers and ensuring the stability of our financial system, and we expect the Senate to confirm the nominee quickly,” Michel said.
Sen. Sherrod Brown, D-Ohio, Chair of the Senate Committee on Banking, Housing, and Urban Affairs, urged Biden to act swiftly. “There must be fundamental changes at the FDIC,” Brown said. “Those changes begin with new leadership, who must fix the agency’s toxic culture and put the women and men who work there — and their mission — first.”
Brown’s call for new leadership marks a departure from the broader Democratic stance. While many Democrats condemned the allegations, they had largely refrained from demanding Gruenberg’s resignation, preferring instead that he lead the necessary changes.
The resignation follows a report released by law firm Cleary Gottlieb in April, which detailed allegations of “sexual harassment, discrimination, and other interpersonal misconduct” at the FDIC. The comprehensive 174-page report, which included input from over 500 individuals, painted a troubling picture of the agency’s internal environment. Gruenberg himself was accused of having a short temper and engaging in bullying and verbal abuse.
“For far too many employees and for far too long, the FDIC has failed to provide a workplace safe from sexual harassment, discrimination, and other interpersonal misconduct,” the report stated. It emphasized that while Gruenberg’s behavior was not the root cause of the misconduct, his leadership style contributed to the toxic culture.
Gruenberg had previously apologized for the agency’s misconduct during a May 15 testimony before the House Financial Services Committee, pledging to implement the report’s recommendations.
Republicans swiftly called for Gruenberg’s removal following the report, while Democrats remained more restrained. Gruenberg, a Democrat, was nominated by Biden in 2022.
Should Gruenberg depart before his replacement is confirmed, the FDIC’s Board of Directors would be politically deadlocked with two Democrats and two Republicans, potentially jeopardizing the Biden administration’s financial reform agenda. According to FDIC bylaws, Vice Chairman Travis Hill, a Republican, would assume the chairman’s responsibilities if the position became vacant.
