Federal Deposit Insurance Corp. Chair Martin Gruenberg on Friday resisted lawmakers’ calls to resign.
In a video to staff, he took responsibility for the agency’s culture — spotlighted in a searing report last week by The Wall Street Journal that alleged Gruenberg turned a blind eye to sexual misconduct by FDIC staff and a “boys’ club environment” that alienated women.
“I bear responsibility for setting the tone for our culture,” Gruenberg said in the video Friday, seen by The Wall Street Journal. “I want to assure you that I’m committed to addressing these issues, including my own shortcomings.”
The House Financial Services Committee, meanwhile, will open an investigation on the FDIC’s workplace culture, three Republicans on the panel told Gruenberg in a letter Friday.
Perhaps most damning, the lawmakers asserted the FDIC’s cultural issues may have contributed to a shortage of bank examiners the agency highlighted in its April report on the failure of Signature Bank.
“The FDIC experienced resource challenges with examinations staff that affected the timeliness and quality of SBNY examinations,” Reps. Patrick McHenry, R-NC; Bill Huizenga, R-MI; and Andy Barr, R-KY, quoted the April report as saying.
“Your report’s limited discussion of staffing challenges related to bank examiners did not consider how the longstanding toxic FDIC culture inhibits employee retention,” the lawmakers wrote Friday. “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.”
The lawmakers warned Gruenberg the committee would “use its full arsenal of oversight and investigative tools” — that includes subpoenas — “to ensure that our banking system remains safe and sound.”
“Chairman Gruenberg, the viability of your leadership is in question,” the Republicans wrote Friday.
In a separate letter Friday calling the sexual misconduct allegations “nothing short of appalling,” the 12 Democrats on the Senate Banking Committee also pushed for an investigation — though rather than open their own, they urged the FDIC inspector general’s office to conduct it.
“It is imperative that the FDIC recruit and retain talented public servants and create a safe and professional work environment,” the Democrats wrote Friday. “Allowing employees that have engaged in misconduct to stay on the job, while losing talented employees because of the failure to meaningfully address these systemic issues, compromises public trust in the FDIC.”