FDIC Chair Martin Gruenberg to resign after workplace harassment probe

Federal Deposit Insurance coverage Company Chairman Martin Gruenberg introduced Monday that he’ll resign, after a current probe discovered a widespread tradition of sexual harassment and discrimination on the unbiased company.

“In mild of current occasions, I’m ready to step down from my tasks as soon as a successor is confirmed,” Gruenberg stated in an announcement. “Till that point, I’ll proceed to meet my tasks as Chairman of the FDIC, together with the transformation of the FDIC’s office tradition.”

Following Gruenberg’s announcement, Deputy White Home Press Secretary Sam Michel stated President Joe Biden would “quickly” identify his nominee for the place.

“The President will quickly put ahead a brand new nominee for FDIC Chair who’s dedicated to these values and to defending customers and making certain the steadiness of our monetary system, and we anticipate the Senate to verify the nominee shortly,” Michel stated.

The announcement follows an earlier assertion from Sen. Sherrod Brown, D-Ohio, who Monday morning known as on Biden to “instantly nominate a brand new Chair” and stated the Senate ought to “act on that nomination at once.”

There “should be basic adjustments on the FDIC,” Brown, who chairs the Senate Committee on Banking, Housing, and City Affairs, stated in an announcement. “These adjustments start with new management, who should repair the company’s poisonous tradition and put the men and women who work there – and their mission – first.”

Along with his assertion, Brown broke from fellow Democrats, who largely condemned the allegations however kept away from pushing for Gruenberg’s resignation, as a substitute calling for him to drive adjustments on the company.

Regulation agency Cleary Gottlieb in April launched a scathing report detailing an alleged tradition of “sexual harassment, discrimination, and different interpersonal misconduct” on the FDIC.

The 174-page report, which drew from accounts of greater than 500 individuals, additionally included, partially, allegations of Gruenberg’s quick mood, accusing him of participating in bullying and verbal abuse. Workers described the chairman as “aggressive” and “harsh,” in keeping with the report. In a single occasion, Gruenberg allegedly screamed profanities at staff after they delivered dangerous information, the report stated.

“For a lot too many staff and for much too lengthy, the FDIC has failed to offer a office secure from sexual harassment, discrimination, and different interpersonal misconduct,” the report stated.

Investigators stated that whereas Gruenberg’s alleged habits shouldn’t be the “root trigger” of misconduct on the FDIC, “we do acknowledge that, as various FDIC staff put it in speaking about Chairman Gruenberg, tradition ‘begins on the prime.'”

Gruenberg on Could 15 testified earlier than the Home Monetary Providers Committee, the place he apologized for the misconduct on the company and pledged to implement the report’s suggestions.

Republicans had been fast to name for Gruenberg’s removing following the report’s launch, whereas Democrats had been restrained of their criticism of the chairman. Gruenberg, a Democrat, was nominated by Biden for the place in 2022.

If Gruenberg had been to depart the company earlier than his alternative is confirmed, it will depart the FDIC’s Board of Administrators politically deadlocked with two Democrats and two Republicans, jeopardizing the Biden administration’s monetary reform agenda.

In keeping with the FDIC’s bylaws, Vice Chairman Travis Hill, a Republican, would assume the chairman’s tasks if the place grew to become vacant.