Mr. Gruenberg, alongside Fed Vice Chair for Supervision Michael Barr and Comptroller of the Currency Michael Hsu, appeared before the House Financial Services Committee and the Senate Banking Committee this week.
Lawmakers on both sides of the aisle grilled the FDIC chief for overseeing a workplace that was rife with “sexual harassment, discrimination, and other interpersonal misconduct” for years.
“I think you ought to resign,” said Sen. John Kennedy (R-La.), who asked Mr. Gruenberg to turn around and apologize to his female staffers.
The FDIC Chair says he will not resign but rather help institute the dozens of recommended changes throughout the regulatory body outlined in the Cleary Gottlieb report.
This was not enough for several GOP lawmakers.
“Mr. Gruenberg, have you ever heard the expression, ‘A fish rots from the head down?’” Mr. Kennedy stated.
“You fixing the agency is like asking Alec Baldwin to conduct a course on gun safety. You ought to be ashamed of yourself.”
The senator revealed that he plans to introduce legislation to extend the statute of limitations to allow every FDIC employee—past and present—to file suit against the agency.
According to Mr. Kennedy, the current FDIC head will be unable to fix the agency because “you’re going to be spending all your time in court.”
At another point in the Senate hearing, Sen. Bill Haggerty (R-Tenn.) contended that Mr. Gruenberg would not resign because a Republican would take his place.
Indeed, FDIC Vice Chair Travis Hill, a Republican, would replace Mr. Gruenberg, and the board would be split between Republicans and Democrats.
Mr. Haggerty thinks, citing Rep. Ayanna Pressley (D-Mass.), that Democrats do not want Mr. Gruenberg to resign because doing so would jeopardize a plethora of banking regulations pending finalization.
“This is the most damning report I ever seen, and I can’t believe there’s a willingness of anybody on this committee to brush this under the table just to get a regulatory agenda,” he said.
Sen. Laphonza Butler (D-Calif.) accused her Republican colleagues of double standards by ignoring the behavior of former President Donald Trump, “having already been found liable for assault.”
What the Report Discovered
Earlier this month, the FDIC released a more than 200-page report produced by law firm Cleary Gottlieb Steen & Hamilton, containing accounts from more than 500 individuals.In one instance, a female examiner received an image of a senior FDIC employee’s genitals. In another example, a female employee was repeatedly given “unwelcome sexualized text messages that feature partially naked women engaging in sexual acts.”
At a field office, women were subjected to their supervisor talking about their breasts, legs, and sex lives.
“Those who reported expressed fear, sadness, and anger at what they had to endure,” the report stated. “Many had never reported their experiences to anyone before, while others who had reported internally were left disappointed by the FDIC’s response.”
While Mr. Gruenberg confirmed that he accepts the report’s findings and takes “full responsibility,” investigators did not determine nor were they asked if he and others should face discipline or be terminated.
President Biden Named at Hearings
Several House and Senate Republicans cited President Joe Biden’s warnings in 2021 when he promised to “fire you on the spot” if anyone disrespects others.The independent Council of the Inspectors General on Integrity and Efficiency launched an investigation in January 2023. Officials uncovered evidence that Mr. Dickman participated in abusive behavior by belittling employees and using crude and inappropriate language.
In July 2021, President Biden fired Andrew Saul, the Social Security commissioner, because he “undermined and politicized” retirement benefits.
Mr. Scott, a ranking member on the Senate Banking Committee, believes that the White House has not undertaken action because of politics.
“Is it politics? Is it the fact that you are a necessary and easy vote for the Biden administration’s economic policy agenda? I think the answer is yes,” he said.
