Martin Gruenberg will step down as head of the Federal Deposit Insurance Corp. after findings of a toxic work environment put the regulator at the center of a heated political fight and fueled calls for his removal.
Gruenberg, 71, faced mounting pressure following a scathing report that detailed allegations of harassment and discrimination at the bank regulator during his tenure. Those findings earlier this month by law firm Cleary Gottlieb Steen & Hamilton were based on accounts from more than 500 people and a months-long probe into a Wall Street Journal article about female bank examiners facing a "sexualized, boys' club environment."
"In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed," Gruenberg said in a statement.
The White House said it will move quickly to nominate a successor and thanked Gruenberg for staying on until a replacement is confirmed. Such a move would ensure the FDIC board maintains a majority of Democratic appointees, and can keep the administration's regulatory agenda on track at least through the election.
After surviving two bruising days of congressional hearings last week, the political pressure on Gruenberg surged Monday when a key Democrat called on President Joe Biden to replace him. Breaking with other top Democratic lawmakers, Senate Banking Committee Chairman Sherrod Brown said that new FDIC leadership was needed to ensure "fundamental changes."
Since the law firm's report was released on May 7, Gruenberg had vowed to fix the agency's problems and apologized repeatedly to employees. Last week, he told lawmakers, including Brown, that he was the correct person to lead a cultural overhaul at the agency.
The probe, which cited allegations over decades and under multiple agency leaders, didn't find that Gruenberg himself had engaged in harassment or discrimination, but cited examples of the FDIC chief losing his temper with staff and questioned whether he was the best person to drive change.
Regulatory Agenda
After the announcement, House Majority Whip Thomas Emmer, a Minnesota Republican, said on Bloomberg Television that Gruenberg should step down immediately. "I'm sure there are other capable people, by the way, that are there who can pick up the pieces and continue to run the FDIC in a much better fashion than Mr. Gruenberg did," Emmer said.
Beyond the FDIC, Gruenberg's eventual exit could have significant ramifications for the Biden administration's regulatory agenda and the financial industry.
