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Biden will name new boss soon to lead 'toxic' FDIC

FDIC chairman Martin Gruenberg — widely criticized for a toxic workplace at the agency — said Monday that he's willing to step down once a successor is confirmed by the Senate.
Win McNamee
Getty Images
FDIC chairman Martin Gruenberg — widely criticized for a toxic workplace at the agency — said Monday that he's willing to step down once a successor is confirmed by the Senate.

The embattled chairman of the Federal Deposit Insurance Corporation says he's prepared to step down, but only after a successor is confirmed by the Senate.

FDIC chairman Martin Gruenberg has been under pressure since a scathing report two weeks ago revealed a toxic workplace environment at the agency, with widespread sexual harassment and discrimination. The outside law firm that produced that report also raised questions about whether Gruenberg was the right person to turn things around.

At a pair of combative Congressional hearings last week, Republican lawmakers called for the chairman's immediate resignation. But some Democrats resisted that, fearing it would leave a Republican vice chair in charge at the agency, which safeguards the nation's bank deposits. That would jeopardize the FDIC's push for stricter capital requirements for banks.

A turning point came Monday when Sen. Sherrod Brown, D-Ohio, the powerful chairman of the Senate Banking Committee, called on the White House to replace Gruenberg.

"There must be fundamental changes at the FDIC," Brown said in a statement. "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."

Gruenberg had hoped to weather the political storm. During last week's hearings, he apologized for the hostile workplace at the agency but vowed to oversee recommended reforms.

Hours after Brown's statement, Gruenberg yielded, saying he is willing to resign, but only after a Democratically-appointed successor is in place.

"Until that time, I will continue to fulfill my responsibilities as Chairman of the FDIC, including the transformation of the FDIC's workplace culture," he said in a statement.

The White House said President Biden would nominate a new FDIC chairman "soon," and urged swift confirmation by the Senate.

"The President of course expects the Administration to reflect the values of decency and integrity and to protect the rights and dignity of all employees," said deputy White House press secretary Sam Michel.

Republicans blasted the idea of leaving Gruenberg at the helm of the FDIC while the confirmation process plays out.

"If President Biden and Democrats were really serious about supporting employees and fixing the FDIC's toxic work culture, they'd ask Chairman Gruenberg to step down immediately," said South Carolina Sen. Tim Scott, the ranking Republican on the banking committee. "This draw-it-out strategy makes it clear that this administration is prioritizing their political agenda over protecting workers."

Copyright 2024 NPR

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.