Lawmakers Chastise FDIC Chair After Damning Report Surfaces

( — At the House Financial Services committee on Wednesday, May 15, Republicans called for the resignation of FDIC chair Martin Gruenberg over a report about the toxic workplace culture at the agency that was released last week.

The report was the result of an independent probe by the law firm Cleary Gottlieb. They spoke to 500 of the FDIC’s approximately 6,000 employees. Some of them detailed Gruenberg losing his temper, and many others mentioned incidents of sexual harassment. There seemed to be a widespread fear of retaliation against those who reported anything.

North Carolina Republican Representative Patrick McHenry had some of the strongest criticism to make. He characterized Gruenberg’s appearance at the committee as an “act of hubris” rather than one of courage. McHenry also claimed that the very fact that Gruenberg has not yet resigned is an indicator that he takes no responsibility for his actions. Many Republicans suggested that the FDIC wouldn’t tolerate the behavior in their workplace if they had seen it at a bank. Arkansas Republican Representative French Hill called it a double standard.

In a rare show of bipartisan agreement, both Democrats and Republicans expressed concern over the environment at the FDIC. However, the Democrats present were not asking for Gruenberg to resign, believing that he could still be instrumental in repairing the situation. New York Democrat Representative Gregory Meeks seemed frustrated they were being forced to address the issue rather than working on more important issues. When Meeks demanded to know if trust and credibility could be restored, Gruenberg indicated that he was confident that they could.

Offering his apologies and claiming full responsibility, Gruenberg said that the FDIC was already implementing recommendations that Cleary Gottlieb suggested to repair the workplace environment. He added that they had already “separated” four employees who had been engaging in misconduct. The FDIC is also working to form an independent Office of Professional Conduct. This office would investigate reports of misconduct and answer directly to the FDIC Board of Directors. The question of his resignation is still unresolved, but there are many who believe it is unnecessary.

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