Republicans on the House Oversight Committee's Subcommittee launched a new probe into the Federal Deposit Insurance Corporation (FDIC) on Monday to investigate the allegations of sexual harrasment within the agency.
"The reports by The Wall Street Journal describe an abusive culture of sexual harassment and discrimination within the FDIC, and a lack of internal processes encouraging reporting and effective responses to such allegations," Ms. McClain and Mr. Biggs wrote in their letter addressing Mr. Gruenberg.
Republicans Place Allegations Alongside 2023 Bank FailuresThese allegations against the FDIC come after a series of high-profile bank failures this year. The collapses this year of First Republic Bank, Silicon Valley Bank, and Signature Bank, respectively represent the second-, third-, and fourth-largest banking failures in U.S. history.
"FDIC was established to restore and maintain confidence in times of crisis. On the heels of several bank failures which shook confidence in the banking system and led the Biden Administration to take unprecedented steps to contain further panic, the allegations of a culture of tolerating harassment at the FDIC weakens the credibility of your agency," the Republicans wrote on Monday.
With Ms. McClain and Mr. Bigg's letter on Monday, the House Oversight Committee is now the second committee in the House of Representatives that's demanding answers from Mr. Gruenberg and the FDIC.
Mr. McHenry said his committee is also concerned that the allegations about the FDIC's workplace culture hindered its capacity to foresee and respond to recent bank failures. The Republican lawmakers noted an April FDIC report on the failure of Signature Bank states that the FDIC "experienced resource challenges with examinations staff that affected the timeliness and quality of SBNY examinations." The Republican lawmaker said that disclosure in the FDIC report provided few details about the staffing challenges the agency faced.
"Your report’s limited discussion of staffing challenges related to bank examiners did not consider how the longstanding toxic FDIC culture inhibits employee retention," Mr. McHenry wrote. "By ignoring or choosing to remain silent about workplace misconduct at the FDIC, your leadership may have contributed to the financial instability and threats to financial security of Americans that were observed in March."
FDIC Faces Bipartisan PressureFDIC has seen pressure from lawmakers on both sides of the aisle to address the allegations impacting the bank insurer.
In a Nov. 15 press statement, FDIC Director Jonathan McKernan said the agency will release harassment victims from confidentiality agreements they may have reached with the agency. Mr. McKernan said the agency will also provide answers for why no FDIC officials were fired amid these harassment allegations.
Some Republican lawmakers are already pushing beyond calls for investigation, demanding Mr. Gruenberg's resignation.
"Far from addressing unacceptable conduct, this promotion implies that you reward it," the Louisiana Republican wrote to Mr. Gruenberg.
Mr. Kennedy further noted recent testimony in which Mr. Gruenberg admitted he hadn't personally acted to address numerous other complaints throughout his chair and as acting chair of the FDIC.
"As a result of these troubling reports and your apparent unwillingness to address them, I call for your resignation so that a new chair can restore the professional culture at the FDIC that the American people expect from its institutions," Mr. Kennedy wrote.