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Gruenberg plans to resign from FDIC following misconduct investigation

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Banking, Industry Regulation
Tuesday, May 21, 2024

Federal Deposit Insurance Corp. (FDIC) Chair Martin Gruenberg announced he will step down from his role following the results of an independent investigation into workplace misconduct within the agency during his tenure. Gruenberg said he plans to leave once a replacement is confirmed.

“Throughout that time I have faithfully carried out the critically important mission of the FDIC to maintain public confidence and stability in the banking system,” Gruenberg said in a statement announcing his resignation plans. “In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed. Until that time, I will continue to fulfill my responsibilities as chairman of the FDIC, including the transformation of the FDIC’s workplace culture.”

Conducted by the law firm of Cleary Gottlieb, the investigation uncovered evidence of harassment and discrimination within the agency. The firm recommended the FDIC implement a detailed action plan consisting of four key components to create a safe, fair and inclusive work environment for its employees.

These consist of a 24/7 toll-free hotline for the discreet reporting of harassing behavior, free counseling services for victims of sexual harassment and discrimination, connecting employees to support groups and other external resources and the establishment of a support program to help survivors remain integrated into the workplace and equipped to take advantage of professional development opportunities after experiencing harassment.

“Hundreds of our colleagues reported painful experiences of mistreatment and feelings of fear, anger, and sadness,” Gruenberg said in a separate statement earlier this month. “Many also expressed a sense of hope that we can achieve positive change for the future. I accept the findings and recommendations of this report and thank the special review committee for their exhaustive work.   

“I want to also thank everyone who shared their experiences throughout this process. I know that doing so was difficult. To anyone who experienced sexual harassment or other misconduct at the FDIC, I again want to express how very sorry I am. I also want to apologize for any shortcomings on my part. As chairman, I am ultimately responsible for everything that happens at our agency, including our workplace culture.”

Sen. Sherrod Brown (D-Ohio) called on President Joe Biden to act quickly in replacing Gruenberg.

“After chairing last week’s hearing, reviewing the independent report, and receiving further outreach from FDIC employees to the Banking and Housing Committee, I am left with one conclusion: there must be fundamental changes at the FDIC. Those changes begin with new leadership, who must fix the agency’s toxic culture and put the women and men who work there – and their mission – first. 

Brown added that he expects “that the entire Banking and Housing Committee and Senate leaders, in both parties, will put politics aside and join this effort to bring new leadership to the agency to ensure a safe workplace for the women and men who protect our financial system.”

Gruenberg has served at the FDIC since August 2005 as chair, vice chair and director.

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