New York — Federal Deposit Insurance Corporation Chairman Martin Gruenberg will step down from his position once a successor is appointed, the White House said Monday.
The announcement of Gruenberg’s resignation follows the release earlier this month of a damning report into the agency’s toxic workplace culture and political pressure from the Senate Banking Committee’s top Democrat, who called for his resignation earlier in the day.
The White House said in a statement that President Joe Biden would nominate Gruenberg’s successor “soon” and urged the Senate to quickly confirm his nomination.
This is a breaking news update. AP’s previous story follows:
The most powerful Democrat in Congress on banking and finance issues called on President Joe Biden on Monday to replace the chairman of the Federal Deposit Insurance Corp., saying the agency is broken and there must be “fundamental changes at the FDIC.” said.
This follows a damning report on the agency’s toxic workplace culture released earlier this month and FDIC Chairman Martin Gruenberg’s failure to convince Congress that the agency can be changed, despite reports that Greunberg himself was often the source in testimony last week. no see. of the problem.
“After chairing last week’s hearing, reviewing the independent report, and receiving additional support for the Banking and Housing Committee from FDIC staff, I have come to one conclusion. There needs to be fundamental change at the FDIC,” said Senator Sherrod Brown. -Ohio, Chairman of the Senate Banking Committee.
As of Monday, no Democrats had called for Gruenberg’s replacement, but several came close to doing so in their own statements. Brown’s statement will now likely lead other Democrats to call for Gruenberg’s dismissal.
In his statement, Brown did not call for Gruenberg’s firing. He serves as chairman of the FDIC for a six-year term, and if Gruenberg resigns, Vice Chairman Travis Hill, a Republican, will lead the FDIC. Brown instead urged President Biden to nominate a new chairman of the FDIC “without delay,” which the Senate is expected to confirm.
Republicans have been calling for Gruenberg’s resignation for some time. At a hearing Thursday, Sen. Tim Scott, R-S.C. According to the report, the committee’s top Republican detailed several stories of female FDIC employees describing extreme harassment and stalking by coworkers, whose complaints were dismissed by supervisors.
“Marty – you heard me say this to you myself, you need to resign,” Scott said. “Your employees don’t trust you. And this is not an isolated incident. This spanned more than a decade of leadership at the FDIC.”
Scott, who called on Gruenberg to resign last December when the allegations first became public, is now demanding that the Banking Committee hold a separate hearing on workplace issues at the FDIC.
Gruenberg has been involved in various levels of leadership at the FDIC for nearly 20 years, and this is his second term as FDIC Chairman. During his time at the highest level of power at the agency, he became largely responsible for the agency’s toxic work environment, according to an independent report outlining the agency’s problems.
The report was released Tuesday by law firm Cleary Gottlieb Steen. & Hamilton cites incidents of stalking, harassment, homophobia and other violations of employment rules, based on more than 500 complaints filed by employees.
The complaint included a woman who said she was stalked by a co-worker and the harassment continued even after she complained about his behavior. a field supervisor calling a gay man a ‘little girl’; and a female field examiner who explained that she had received photos of the private parts of an FDIC senior examiner.
The FDIC is one of several banking system regulators. This Depression-era institution is best known for running the U.S. Deposit Insurance Program, which insures Americans’ deposits up to $250,000 if their bank fails.
Sheila Bair, who chaired the FDIC during the 2008 financial crisis and was one of the most prominent voices in government at the time, posted on Twitter Monday that it would be best for the agency if Gruenberg stepped down.
He continued, “This controversy is hurting him and his agency. “For his own sake and for everyone at the FDIC, he should announce his intention to resign upon his appointment,” she said.
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AP Treasury Correspondent Fatima Hussein contributed to this report from Washington.
