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The Senate banking chairman demands that Biden replace the top regulator

Ohio Sen. Sherrod Brown, the chairman of the Senate Banking Committee, called on President Joe Biden to replace the head of the Federal Deposit Insurance Corporation, making Brown the highest-ranking Democrat to call for the replacement of the FDIC chairman on based on what he described. as the agency’s “toxic culture.”


What you need to know

  • Ohio Sen. Sherrod Brown, chairman of the Senate Banking Committee, called on President Joe Biden to replace the head of the Federal Deposit Insurance Corporation because of the agency’s “toxic culture.”
  • Brown’s demand for the ouster of FDIC Chairman Martin Gruenberg comes after an independent investigation allegations of sexual harassment and other workplace misconduct have created a workplace culture that is “misogynistic,” “patriarchal,” “insular,” “outdated” and a “good old boys’ club”
  • In his statement, Brown did not call for Gruenberg’s resignation. Brown instead called on President Biden to “without delay” appoint a new chairman for the FDIC, which the Senate would then confirm
  • Senate Republicans called on Gruenberg to resign, but Democrats hesitated

Brown’s demand for the resignation of FDIC Chairman Martin Gruenberg comes after an independent investigation into allegations of sexual harassment and other workplace misconduct found a workplace culture that is “misogynistic,” “patriarchal,” “insular,” “outdated ‘ and ‘good boys’. club.

Gruenberg’s performance during congressional hearings last week, including before Brown’s committee, was unconvincing for the progressive Ohio Democrat.

“After chairing last week’s hearing, reviewing the independent report, and receiving further assistance from FDIC staff to the Banking and Housing Committee, I can only draw one conclusion: fundamental changes must occur at the FDIC.” , Brown said in a statement. on Monday. “That’s why I’m calling on the President to immediately appoint a new Chairman to lead the FDIC during this challenging time, and for the Senate to take immediate action on that appointment. “That is why I am calling on the President to immediately appoint a new chairman to lead the FDIC during this challenging time, and for the Senate to take action on that appointment without delay.”

In his statement, Brown did not call for Gruenberg’s resignation. He is in the middle of his six-year term as chairman of the FDIC and if Gruenberg were to resign, Vice Chairman Travis Hill, a Republican, would lead the agency. Brown instead called on President Biden to “without delay” appoint a new chairman for the FDIC, which the Senate would then confirm.

Senate Republicans called on Gruenberg to resign, but Democrats hesitated. Sen. Elizabeth Warren of Massachusetts, another progressive member of the banking committee, sent former aides to help him prepare for his testimony, Semafor said.

“Chairman Gruenberg, Republicans today called for your resignation and are engaged in a purely political exercise. They want to replace you with Vice Chairman Travis Hill,” Warren said during the hearing. “Your resignation would do nothing to improve the toxic culture at the FDIC, but it would give Republicans a veto over bank policy.”

Warren, the FDIC and the White House did not immediately return requests for comment Monday.

Last week, Gruenberg apologized to the more than 500 people who reported misconduct to investigators.

“I accept the findings of the report and take full responsibility as chairman. To anyone who has experienced sexual harassment or other misconduct at the FDIC, I would like to once again apologize and express how deeply I am sorry,” Gruenberg said in his opening statement at the Senate hearing. “I also recognize my own failures as chairman, both in failing to recognize how my temperament during meetings affected others and in failing to previously identify deeper cultural issues at the FDIC. I am personally committed to addressing these issues.”

Investigators from an outside law firm hired to conduct the report spoke with FDIC officials who reported “instances in which Chairman Gruenberg lost his temper and interacted with staff in a demeaning and inappropriate manner.” His conduct, the report found, had a “chilling” impact on FDIC employees.

Other FDIC employees in the report describe incidents of stalking, homophobic comments, sending non-consensual explicit images, groping, verbal sexual harassment, professional retaliation for rejecting advances from superiors, bullying, racism and threats of physical violence.

The FDIC is one of several regulators of the banking system. The Great Depression-era agency is best known for running the nation’s deposit insurance program, which insures Americans’ deposits of up to $250,000 in case their bank fails.

Gruenberg was first appointed to the FDIC Board of Directors in 2005 and has since served much of the time as acting chairman or chairman under Presidents George W. Bush, Barack Obama and Donald Trump. President Joe Biden nominated him for the role in November 2022.

“I have known and worked with Chairman Gruenberg for years. But there is a desperate need for change at the FDIC. This controversy hurts him and his agency,” Sheila Bair, a former FDIC chairman who served from 2006 to 2011, wrote on social media Monday. “For his own good and for everyone at the FDIC, he should announce his intention to effectively resign with the appointment and confirmation of a new chairman.”

“The FDIC was once a proud place to work. It can and will be that way again,” Bair added.

The Associated Press contributed to this report.