FDIC chair at heart of harassment scandal plans to resign
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FDIC chair Martin Gruenberg on Capitol Hill on May 16. Photo: Kevin Dietsch/Getty Images
FDIC chair Martin Gruenberg announced Monday that he's prepared to step down following a scathing report on a culture of harassment and retaliation inside the agency.
The big picture: Gruenberg said he's willing to move aside once a successor is confirmed, which could take time and allow President Biden to keep him in the position indefinitely.
- Biden wouldn't get to choose an acting chair as the role would automatically go to Travis Hill, the vice chairman of the board and a Republican.
- That presumably leaves the White House scrambling to find a new leader to try to confirm before the November election.
What he's saying: "In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed," he said. "Until that time, I will continue to fulfill my responsibilities as Chairman of the FDIC, including the transformation of the FDIC's workplace culture."
State of play: The announcement came the same day Sen. Sherrod Brown (D-Ohio), the head of the Senate Banking Committee, called on Biden to choose a new FDIC leader.
- Republicans on the House Financial Services Committee last week called on Gruenberg to step down during a contentious hearing. But Democrats on the committee, who expressed disappointment in him, stopped short of echoing calls for his resignation.
- "I think the White House needs to move quickly, nominate somebody, and we'll move forward," Brown told reporters in the Capitol on Monday evening shortly after Gruenberg announced his intention to resign.
Between the lines: Gruenberg stepping down would leave the FDIC board deadlocked with two Democrats and two Republicans, making it difficult for the agency to move forward on any controversial rulemaking, Axios' Emily Peck reports.
- It would also change the balance of power between the three banking regulators — the FDIC, the OCC and the Fed.
Catch up quick: A bombshell 234-page report found a long-standing toxic culture at the FDIC, which the report says has been rife with sexual harassment for years and employees feared retaliation for speaking up.
- While the issues started long before Gruenberg led the agency in 2022, the report also detailed his reputation for losing his temper in the workplace.
- He previously served as the agency's chairman from 2012 to 2018.
Go deeper: FDIC's Gruenberg would likely get fired if he was a CEO
Editor's note: This story has been updated with additional context and to include a quote from Sen. Sherrod Brown.
