WASHINGTON–Even in the wake of what some have called “scathing” findings in a new report, FDIC Chairman Martin Gruenberg is expected to remain in the post largely as the result of politics in Washington.
As CUToday.info reported earlier, an independent investigation has led to a 234-page report that confirmed an earlier Wall Street Journal report that had detailed pervasive sexual harassment, discrimination and bullying at the agency. Critics called the bank insurer and regulator a “sexualized boys club” where dozens of women had quit their positions as a result of the culture.
The report was written by the law firm Cleary Gottlieb Steen & Hamilton and commissioned by the FDIC.
Long Term of Service
Gruenberg has been with the FDIC since 2005 and has served two stints as chairman and one as vice chairman. While it did not find that Gruenberg alone was responsible for the issues described in the report, which is based on interviews with more than 500 employees, it added, “We do recognize that, as a number of FDIC employees put it in talking about Chairman Gruenberg, culture ‘starts at the top’.”
The report includes alleged instances where Gruenberg lashed out at subordinates “particularly when being delivered bad news or conveyed views with which he disagrees.”
Unlikely to be Asked to Leave
Yet despite all that, it’s unlikely Gruenberg will be asked to step down and a FDIC spokesperson told CNN Gruenberg “is already implementing the recommendations in the report” and that “at his direction” the agency is “working to identify and appoint a transformation monitor as well as an independent third-party expert to support these efforts.”
Gruenberg, a Democrat who was appointed by President Biden, has been criticized by members of Congress, especially from the GOP, but were he to resign, Vice Chair Travis Hill, a Republican appointee, would automatically become chair until a replacement is appointed by the president and confirmed by the Senate.
‘Deadlocked’ Agency
In the interim, that would leave the agency deadlocked with one other Republican and two Democratic members on the FDIC’s board of director, CNN reported.
Dennis Kelleher, president and CEO of Better Markets, a group that advocates for oversight of the financial sector, told CNN that were the chairman to exit the post, rulemaking would come to a “screeching halt,” and that with Hill as chair there would “be little appetite to work with the Federal Reserve and Office of the Comptroller of the Currency to pass any kind of regulations that beefs up bank capital requirements.”
How to Sign Up For the Best Daily News Email in Credit Unions? (It’s Free!)
Every workday CUToday.info delivers the most comprehensive, freshest daily newsletter with the day’s news headlines, including links to the related articles. The Fresh Today newsletter is the most timely, relevant and widely-read source of news and information in the CU community. And it’s free!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties,
And did we mention it’s free?