FDIC Chair Martin Gruenberg faced a bipartisan grilling on Capitol Hill Wednesday over a blistering report that found pervasive harassment and mistreatment of employees at the agency on his watch.
Democrats openly questioned whether Gruenberg should stay at the agency. But they stopped short of joining Republicans in calling for his removal, which would imperil a crackdown on big banks and halt other pending financial regulations opposed by the industry.
“I do not have confidence that you can continue to lead in this role because there is a deficit of trust and your credibility has been undermined,” Rep. Ayanna Pressley (D-Mass.) said at the hearing of the House Financial Services Committee. Pressley said she was disgusted by the treatment of employees at the FDIC and expressed anger at Gruenberg for inviting a controversy that may jeopardize important pending policies at his agency.
“You’re on a short leash; a lot of people here would like to see you gone,” Rep. Stephen Lynch (D-Mass.) warned Gruenberg. “I’m not so sure you’re the guy to make the changes, but maybe you are. Maybe you can prove that to us, I don’t know.”
Gruenberg appeared before lawmakers for the first time since the independent report last week portrayed a workplace culture that for years was rife with sexual misconduct, discrimination and other mistreatment of employees that managers did little to stop.
The investigation also found bad behavior by Gruenberg himself, detailing incidents as recently as May 2023, in which he lost his temper and berated staff in a “demeaning and inappropriate manner.”
“The fact that you have yet to resign proves you take no responsibility for your actions,” Rep. Patrick McHenry, the committee chair, told Gruenberg. “And let me be clear, showing up today is not an act of courage, it’s an act of hubris.”
McHenry and other Republicans reiterated their demands that Gruenberg step down, pressing him over how he could preside over the agency for 10 of the last 13 years without knowing about or addressing the wide range of workplace misconduct issues.
Democrats expressed outrage at the working conditions for employees at the FDIC. Several suggested that Gruenberg would have been ousted if he were in the private sector and pressed him on his plans to reform the agency. But none went as far as calling for his resignation.
“I’m pissed off,” said Rep. Gregory Meeks (D-N.Y.), who said that “employees suffered from racial and gender discrimination, bullying, mistreatment and harassment at the FDIC for years” and people weren’t seriously disciplined for it.
Meeks told reporters after leaving the hearing that he was still deciding whether to call for Gruenberg’s resignation. “Something or somebody has to convince me that this thing can be repaired,” he said.
Rep. Jim Himes (D-Conn.) said he was also undecided over whether Gruenberg was the right person to fix the agency and suggested he would be removed if he were in the private sector or the military.
Himes encouraged Gruenberg to make the case to employees who were victimized by harassment why he should be in charge of reforming the culture. “If they’re not persuaded, I hope you do the right thing,” Himes said.
But other Democrats made clear that they still backed Gruenberg.
Rep. Maxine Waters, the top Democrat on the panel, said the FDIC had allowed workplace misconduct issues to fester for years under both Republican and Democratic leaders.
Michael Hsu, the acting comptroller of the currency who also sits on the FDIC board, said he has confidence in Gruenberg’s ability to stay at the agency and implement reforms.
In his testimony, Gruenberg again apologized and told lawmakers that he’s working on overhauling the agency’s culture and process for addressing workplace misconduct, such as proposing a new independent office to investigate complaints.
He said he was committed to making changes and cited progress toward improving the agency’s culture. “This year, four individuals have been separated from the agency for misconduct,” Gruenberg said. “We have made management changes in key positions related to this issue."
“We’ve got to break the good ol’ boys network that is at the core of the report,” Gruenberg said.
Eleanor Mueller contributed to this report.
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