Updated May 15, 2024 - Business

"I'm pissed:" Lawmakers excoriate FDIC chair after toxic workplace report

FDIC Chair Martin Gruenberg at a House Committee hearing.

FDIC chair Martin Gruenberg at a House Financial Services Committee oversight hearing on Wednesday, May 15. Photo: Graeme Sloan/Bloomberg via Getty Images

Rep. Patrick McHenry (R-N.C.), chair of the House Financial Services Committee, called on embattled FDIC chairman Martin Gruenberg to resign at a contentious hearing Wednesday morning.

Why it matters: Gruenberg's job is on the line in the wake of a damning investigation that found widespread sexual harassment and a toxic workplace culture at the banking agency he leads.

  • "The fact that you've not yet resigned proves that you take no responsibility for your actions and the words that you've used so far," McHenry said in opening remarks at the hearing meant to address financial regulation.
  • "Let me be clear, showing up today is not an act of courage," he added. "It's an act of hubris."

Driving the news: Several Republicans mentioned that regulators at the FDIC wouldn't tolerate the kind of behavior outlined in the investigation if it were happening at a bank. "A horrible double-standard," said Rep. French Hill (R-Ark.)

  • "Mr. Gruenberg, you have become the Michael Cohen and Harvey Weinstein of the FDIC. You need to go," said Rep. Blaine Luetkemeyer (R-Missouri). (Gruenberg himself has not been accused of any sexual misconduct.)

Zoom in: Democrats on the committee expressed disappointment in Gruenberg, but stopped short of echoing Republican calls for his resignation.

  • "I would love to talk about some of the substance of the economy, but as I sit here right now, if I'm going to be honest, I'm pissed," said Rep. Gregory Meeks (D-NY).
  • Meeks asked if Gruenberg believed current leadership at the bank could restore trust and credibility there. Gruenberg said he did.

Catch up quick: Law firm Cleary Gottlieb led the independent probe.

  • It spoke with 500 FDIC employees — out of close to 6,000 who work at the agency — many of whom recounted experiences of sexual harassment and described widespread fear of retaliation.
  • The report noted instances where Gruenberg lost his temper with subordinates, creating an atmosphere where employees feared speaking up.

What he's saying: "We gotta break this good old boys network that is at the core of this report," Gruenberg said, explaining that the agency had already "separated" four employees this year who had engaged in misconduct.

  • In his opening statement, Gruenberg apologized for the culture at the agency under his watch and told lawmakers that the FDIC is already adopting recommendations that Cleary laid out to address the issues.
  • The FDIC is proposing to form an independent Office of Professional Conduct, which will investigate misconduct and report directly to the FDIC Board of Directors, according to his remarks.
  • "I accept the findings of the report and, as Chairman, I take full responsibility," Gruenberg said. "To anyone who has experienced sexual misconduct at the FDIC, I again want to apologize and express how deeply sorry I am."

Editor's note: This story was updated with details from the hearing.

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