FDIC Chair Martin Gruenberg to resign after office 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 gentle of current occasions, I’m ready to step down from my obligations as soon as a successor is confirmed,” Gruenberg mentioned in a press release. “Till that point, I’ll proceed to meet my obligations 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 mentioned 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 soundness of our monetary system, and we count on the Senate to substantiate the nominee rapidly,” Michel mentioned.

The announcement follows an earlier assertion from Sen. Sherrod Brown, D-Ohio, who Monday morning known as on Biden to appoint a brand new chair and change Gruenberg following reviews of widespread sexual harassment and misconduct inside the company.

There “have to be basic adjustments on the FDIC,” Brown, who chairs the Senate Committee on Banking, Housing, and City Affairs, mentioned in a assertion. “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.”

“That is why I am calling on the President to instantly nominate a brand new Chair who can lead the FDIC at this difficult time and for the Senate to behave on that nomination at once,” Brown continued.

Along with his assertion, Brown broke from fellow Democrats, who largely condemned the allegations however avoided pushing for Gruenberg’s resignation, as an alternative 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, partly, allegations of Gruenberg’s brief mood, accusing him of partaking in bullying and verbal abuse. Staff described the chairman as “aggressive” and “harsh,” in line with the report. In a single occasion, Gruenberg allegedly screamed profanities at workers after they delivered dangerous information, the report mentioned.

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

Investigators mentioned that whereas Gruenberg’s alleged habits is just not the “root trigger” of misconduct on the FDIC, “we do acknowledge that, as quite a few FDIC workers put it in speaking about Chairman Gruenberg, tradition ‘begins on the prime.'”

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

Republicans have been fast to name for Gruenberg’s elimination following the report’s launch, whereas Democrats have been restrained of their criticism of the chairman, who can also be a Democrat.

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

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