Congress unites while grilling FDIC chairman for two days over report indicating toxic work culture

Lawmakers on both sides of the aisle came together to grill the Federal Deposit Insurance Corporation chairman for two days in a row. An independent report revealed shocking findings from employees, which claimed sexual harassment and discrimination among women, gay people, and minority groups, with the claim they were only hired as a result of being a “token” of a quota to fill.

House Financial Services Committee Chairman Patrick McHenry (R-NC) cut to the chase on day one of the hearing when he addressed Martin Gruenberg. “You’ve failed your employees, your agency, and the American people,” he said. “The FDIC must be held to the same standards of conduct it imposes on the entities it regulates. The agency’s culture must be overhauled.”

On Thursday, Sen. Tim Scott (R-SC) echoed McHenry’s criticism of how Gruenberg has conducted his job since 2005 as a leader on the FDIC Board of Directors: “Marty, you’ve heard me say this directly — you should resign.”

Rep. Maxine Waters (D-CA) set the tone early by expressing Congress’s disgust with the 234-page report. “It makes clear under both Republican and Democratic chairs that the FDIC has not done its job properly,” Waters said.

On page 5 of the report, shocking accounts from employees include a supervisor talking about a woman’s legs and other body parts on a regular basis, along with his sex life. Another woman shared how she received a photo of an FDIC supervisor’s private parts. Other employees reported “how demoralizing” it was to be told by colleagues they were “only hired” as a result of being a “token” to fill a quota. Complaints of homophobic statements, such as referring to gay men as “little girls,” were also included.

Sen. Katie Britt (R-AL) was infuriated with the “disturbing” findings, including “hundreds of instances of gender discrimination, unsolicited sexual advances, harassment and assault and even difficulty being promoted after having children.”

“Let me repeat: Individuals within a United States agency denied opportunities to women because they chose to have a family,” Britt said.

Sen. J.D. Vance (R-OH) questioned Gruenberg on why the government corporation allowed JP Morgan to purchase First Republic Bank instead of other regional banks. Vance revealed billions of dollars in miscalculations by the FDIC and said as a result of the toxic culture, employees are afraid to provide critical information.

“I worry the culture you created at the FDIC has people terrified to answer honestly,” Vance said. “If they’re not answering honestly, it’s impossible for us to do our job of overseeing what you guys do in the financial sector.” 

While Sen. Elizabeth Warren (D-MA) is concerned, she isn’t calling for Gruenberg’s resignation. The Massachusetts senator said merely replacing Gruenberg with Vice Chairman Travis Hill, a Republican, would be a “purely political” move for the Right.

“Your resignation would do nothing for the toxic culture at the FDIC, but it would give Republicans a veto over bank policy,” Warren said. “Culture starts at the top, and it’s your responsibility to fix this.” 

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Warren asked Gruenberg if he would commit to implementing all of the provided recommendations, to which he agreed. Warren said, “We will be watching you to make sure you keep your word on this.”

There were several references made to there being additional future hearings.

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