Amid Scandal, Gruenberg Announces Plans to Resign Once Successor is Approved

May 28, 2024Federal Regulation, News

Federal Deposit Insurance Corp (FDIC) Chairman Martin Gruenberg announced last week that he plans to step down after the Special Review Committee’s recent report detailing sexual harassment, misconduct, and retaliation at the agency. His five-year term ends in 2028, but he said he would resign when a successor is confirmed, and the White House will soon put forth nominees for the position. 

“In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed. Until that time, I will continue to fulfill my responsibilities as Chairman of the FDIC, including the transformation of the FDIC’s workplace culture,” Gruenberg said in a statement, according to The Hill

The agency’s workplace culture has been under scrutiny since November, when a Wall Street Journal article highlighted a work environment marked by discrimination and sexual misconduct. If Gruenberg were to leave the FDIC before a replacement is confirmed, leadership would fall to vice chair Travis Hill, a Republican, and the agency would be deadlocked 2-2.

Gruenberg has been a senior leader at the FDIC for almost twenty years, and his pending departure comes at a pivotal time for the agency, with three major bank failures and lenders struggling to keep up with increased Federal Reserve interest rates. Reuters noted that the FDIC is working with other bank regulators on efforts to tighten regulation and increase big bank capital requirements. 

Calls for Gruenberg to resign have increased from Democrats and Republicans alike. In November, Representative Patrick McHenry (R-N.C.), Chair of the House Financial Services Committee (HFSC) asked Gruenberg whether he had been investigated for sexual misconduct, and it was later revealed that he was investigated in 2008 but that the complaint was dropped. 

“The FDIC needs to be fixed. The women and men who work there deserve better,” said Senator Sherrod Brown (D-Ohio), according to Banking Dive. “Chair Gruenberg must accept responsibility and must immediately work to make fundamental changes to the agency and its culture.”

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