Honolulu Star-Advertiser

Friday, July 19, 2024 85° Today's Paper


Top News

FDIC chair says he will step down once successor is announced

REUTERS/KEVIN LAMARQUE / 2023
                                Federal Deposit Insurance Corporation Chairman Martin Gruenberg testifies at a House Financial Services Committee hearing on the response to the recent bank failures of Silicon Valley Bank and Signature Bank, on Capitol Hill in Washington.
1/1
Swipe or click to see more

REUTERS/KEVIN LAMARQUE / 2023

Federal Deposit Insurance Corporation Chairman Martin Gruenberg testifies at a House Financial Services Committee hearing on the response to the recent bank failures of Silicon Valley Bank and Signature Bank, on Capitol Hill in Washington.

WASHINGTON >> Federal Deposit Insurance Corp Chair Martin Gruenberg announced his resignation on Monday, finally succumbing to a months-long scandal over sexual harassment and other misconduct at the top bank regulator.

Gruenberg said he would step down from his responsibilities once a successor is confirmed.

Earlier in the day a top Democrat had called for the FDIC chair to be replaced after an external review found sweeping reports of employee mistreatment and sexual harassment.

There must be “fundamental changes” at the agency, Senate Banking Committee Chairman Sherrod Brown said in a statement, adding that he wanted President Joe Biden to immediately nominate a replacement, which the Senate should quickly advance. Brown is the most senior Democrat to call for Gruenberg’s replacement, ramping up pressure on the FDIC chairman.

Spokespeople for the FDIC and the White House did not immediately respond to requests for comment.

Last week, Gruenberg testified alongside several other banking regulators before Congress. He vowed to take steps to address longstanding cultural issues at the agency, as well as his own personal conduct, after the review found multiple instances in which he lost his temper with subordinates.

But Republicans and Democrats alike expressed skepticism that Gruenberg would be able to overhaul the agency, where he has served for nearly two decades. He was sworn in to his current five-year term as chair of the FDIC in January 2023. He had also served as chairman from November 2012 to mid-2018.

“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,” Brown said in his statement.

Notably, Brown did not call for Gruenberg to immediately resign, as many Republicans in Congress have. Should Gruenberg leave the agency without a confirmed replacement, leadership of the FDIC would fall to Travis Hill, the agency’s vice chair and a Republican. The agency would then be deadlocked 2-2.

The FDIC is working with the Federal Reserve and the Office of the Comptroller of the Currency on several rulewriting projects that would tighten requirements on larger banks, including a contentious plan to boost big bank capital requirements.

By participating in online discussions you acknowledge that you have agreed to the Terms of Service. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. If your comments are inappropriate, you may be banned from posting. Report comments if you believe they do not follow our guidelines. Having trouble with comments? Learn more here.