The top Democrat in Congress on banking and financial issues, Senator Sherrod Brown, has called for the removal of FDIC Chairman Martin Gruenberg after a damning report was released about the agency’s toxic workplace culture. Brown stated that there must be “fundamental changes at the FDIC” following the report and Gruenberg’s inability to convince Congress that he can turn the agency around. While no Democrats had previously called for Gruenberg’s replacement, Brown’s statement is expected to lead to further calls for his removal among Democrats.
Senator Brown did not explicitly call for Gruenberg to be fired, as he is in the middle of his six-year term as chairman of the FDIC. Instead, Brown urged President Biden to nominate a new chair for the FDIC without delay, which would then be confirmed by the Senate. Republicans have been calling for Gruenberg to step down, with Senator Tim Scott detailing stories of extreme harassment and stalking experienced by female FDIC workers that were dismissed by supervisors. Scott has been calling for Gruenberg’s resignation since December.
Gruenberg has been with the FDIC in various leadership roles for almost 20 years, and this is his second full term as chair. The recent independent report highlighted incidents of stalking, harassment, homophobia, and other violations of employment regulations at the agency, based on over 500 complaints from employees. The report revealed disturbing incidents like a woman being stalked by a coworker, a field office supervisor using derogatory terms for gay men, and a female examiner receiving inappropriate messages. Sheila Bair, a former FDIC chair, suggested that it would be best for Gruenberg to step down to prevent further damage to the agency’s reputation.
The FDIC, a key banking system regulator established during the Great Depression, is responsible for running the nation’s deposit insurance program. This program insures Americans’ deposits up to $250,000 in case their bank fails. The current controversy surrounding Gruenberg and the toxic workplace culture at the FDIC has sparked calls for his resignation from both Democrats and Republicans. Sheila Bair, a respected figure in government and a former FDIC chair, believes that Gruenberg stepping down would be in the best interest of the agency and its employees.
In response to the growing calls for Gruenberg’s removal, it remains to be seen how President Biden will address the situation and whether new leadership will be nominated for the FDIC. The ongoing scrutiny of the agency’s workplace issues and Gruenberg’s leadership has brought significant attention to the need for reform within the organization. The outcome of this situation will likely have lasting implications for the FDIC and its ability to effectively carry out its regulatory responsibilities in the future.
