Federal Deposit Insurance Corp Chairman Martin Gruenberg has announced his resignation following a report that exposed rampant sexual harassment within the agency.
What Happened: Gruenberg has agreed to step down once his successor is confirmed, according to The Wall Street Journal. This decision was made in response to mounting pressure from both Democratic and Republican lawmakers.
"It has been my honor to serve at the FDIC as Chairman, Vice Chairman, and Director since August of 2005," Gruenberg wrote to staff, according to the report.
The White House announced that President Biden will soon nominate a new FDIC chairman and expects the Senate to move quickly to confirm the nominee.
The report, which was commissioned in response to a Journal investigation, revealed allegations of widespread sexual harassment, discrimination, and bullying at the FDIC. This led to a call for new leadership at the agency by the Democratic chairman of the Senate Banking Committee, Sen. Sherrod Brown (D-Ohio).
Sheila Bair, a Republican who served as FDIC chair from 2006 to 2011, called on Monday for Gruenberg to declare his intention to resign once a new chair is confirmed. She wrote on X, “I have known and worked with Chairman Gruenberg for years. But there is a desperate need for change at the FDIC. This controversy is hurting him and his agency. For his own sake and everyone at the FDIC, he should announce his intention to resign effective with the appointment and confirmation of a new Chair.”
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Gruenberg, who has been at the helm of the FDIC since January 2023, has faced criticism from both parties over his handling of the harassment allegations and his own alleged temper. The report also highlighted the toxic culture at the agency, which Gruenberg has pledged to address.
Why It Matters: The FDIC, under Gruenberg’s leadership, has been embroiled in controversy over the past year. In March 2023, Gruenberg warned of the risk of banks holding unrealized losses just days before the collapse of Silicon Valley Bank. This raised questions about the stability of the banking system, which Gruenberg and other regulators defended in a Senate Banking Committee hearing later that month.
Despite this, Gruenberg had the support of some prominent figures. Recently, Sen. Elizabeth Warren (D-Mass.) defended Gruenberg amid the allegations of a toxic workplace at the FDIC. However, the mounting pressure from lawmakers and the report’s findings ultimately led to Gruenberg’s resignation.
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