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Martin Gruenberg, head of the Federal Deposit Insurance coverage Company, will step down following a scathing unbiased investigation detailing pervasive sexual harassment, discrimination and bullying on the company charged with regulating the banking sector.
“In mild of current occasions, I’m ready to step down from my duties as soon as a successor is confirmed,” Gruenberg mentioned in a press release on Monday. “Till that point, I’ll proceed to satisfy my duties as Chairman of the FDIC, together with the transformation of the FDIC’s office tradition.”
Gruenberg’s announcement of his intent to resign comes hours after Sen. Sherrod Brown, a high Democrat who leads the Senate Banking Committee, called for “new leadership” on the FDIC. Gruenberg joined the FDIC board of administrators nearly twenty years in the past. He’s served as chair of the company for practically 10 of the previous 13 years.
President Joe Biden will “quickly” announce a brand new nominee to steer the FDIC, White Home Deputy Press Secretary Sam Michel mentioned in a press release on Monday following the information. “We anticipate the Senate to verify the nominee rapidly,” he added. Nevertheless, there’s no assure that can occur, since affirmation processes have been identified to tug on for months or longer, at which level Biden might now not be in workplace.
With Gruenberg remaining till a successor is called, there received’t be a scenario the place Vice Chair Travis Hill, a Republican appointee, robotically turns into chair, leaving the company deadlocked with one different Republican and two Democratic members on the FDIC’s board of administrators.
That may have probably stalled important and controversial banking laws, corresponding to ramped-up capital necessities, from taking impact.
Michel mentioned the administration is grateful for “his willingness to remain at FDIC till his successor is confirmed as a way to proceed to safeguard our nation’s monetary stability throughout this time of transition.”
Sen. Tim Scott, the top-ranking Republican on the Senate Banking Committee, slammed Gruenberg’s resolution to not resign instantly in addition to Democrats for not placing extra strain on him to take action.
“This draw-it-out technique makes it clear that this administration is prioritizing their political agenda over defending employees,” Scott mentioned in a press release.
The FDIC commissioned a report by legislation agency Cleary Gottlieb Steen & Hamilton, which in the end spurred Gruenberg’s resignation. It confirmed the findings of a November Wall Street Journal investigation revealing a long-standing problematic tradition. It didn’t discover that Gruenberg alone was answerable for the problems described in depth within the report based mostly on interviews with over 500 workers.
Nevertheless, it documented a number of cases the place Gruenberg lashed out at subordinates “significantly when being delivered dangerous information or conveyed views with which he disagrees.” That precipitated staffers to delay delivering information they feared would upset him. Gruenberg’s temperament “might hinder his potential to determine belief and confidence in main significant tradition change,” the report added.
Gruenberg testified earlier than lawmakers final week in a beforehand scheduled listening to with different high monetary regulators, saying he takes “full duty” for the findings of the report. “I additionally acknowledge my very own failures as Chairman, each in failing to acknowledge how my temperament in conferences impacted others and for not having recognized deeper cultural points on the FDIC sooner,” he mentioned.
The FDIC declined to remark past Gruenberg’s assertion on Monday.
Whereas most Democrats stopped wanting calling for Gruenberg to resign or get replaced, many expressed outrage on the mid-Might hearings within the Home and Senate that Gruenberg testified at.
“I’m pissed off… If it was me in my workplace, I’d in all probability be run out,” mentioned Rep. Gregory Meeks, a New York Democrat through the listening to. “It simply saddens me enormously,” he added, referring to the findings of the unbiased report.
Nevertheless, Democratic Sen. Elizabeth Warren labeled the calls Gruenberg acquired to resign “purely political train.”
“Your resignation would do nothing to enhance the tradition of the FDIC however it might give Republicans a veto over financial institution coverage,” she mentioned on the Senate listening to the place Gruenberg testified. For her, it appeared it might be enough for him to see by implementing all of the suggestions of the report, which he mentioned he would.
This story has been up to date with further context and developments.