FDIC’s Martin Gruenberg exposes the Left’s #MeToo hypocrisy 

Federal Deposit Insurance Corporation Chairman Martin Gruenberg is out amid scandals over the agency’s toxic environment. A tardy, though welcome, demand for his resignation came Monday from Senate Banking Committee Chairman Sherrod Brown (D-OH). The problem is that Gruenberg won’t leave his post until his replacement is named. This is a convenient way to protect the destructive Biden regulatory banking agenda.

Left-leaning lawmakers stayed mum for months when they had a chance to send a clear signal that sexual harassment, discrimination, and retaliation are not tolerated in any federal body. By dragging their feet, they sent the message that wrongdoing gets a pass when the ringleader is advancing their preferred policy agenda — no matter how it may harm consumers and victims. Conservatives have been calling for his immediate ouster, and the Left can right its wrongs by demanding that Gruenberg leave now and take with him others at the FDIC who have yet to be held accountable. 

The outrageous details and damning conclusions reached in a new FDIC-commissioned report by an independent law firm were featured prominently during last week’s House Financial Services Committee hearing and Senate Banking Committee hearing. The report corroborated racy findings of a Wall Street Journal investigation into the FDIC published last fall. The paper found “a toxic and sexualized workplace” that included stalking, harassment of female, nonwhite, and disabled employees, male superiors texting lewd photos to female junior staff, retaliation after reporting wrongdoing, and extreme incidents following heavy drinking and intoxication. 

Republicans and Democrats excoriated the chairman for toxic culture and his oversight at the bank-regulating agency. Wrongdoers were slapped on their wrists and sometimes wound up working alongside their alleged victims. Gruenberg set the tone with his own behavior, having “built a reputation for bullying and for having an explosive temper.”

The Left’s pearl-clutching came across as empty grandstanding, though. Only a few expressed no confidence and asked him to resign.

During the #MeToo era, former Minnesota Sen. Al Franken received the tar-and-feather treatment usually reserved for private sector CEOs, and he wasn’t overseeing a 6,000-person operation. The inconvenient truth emerging is that since Gruenberg is the linchpin for the Left’s agenda to tighten and expand federal oversight of the nation’s largest lenders, he gets a pass. 

The failure of three banks last year under Gruenberg’s watch is a reminder that poor leadership at the FDIC can lead to devastating outcomes. In the wake of the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank, the agency proposed increasing the federal deposit insurance coverage limit beyond $250,000 per depositor. This will lead to higher fees that will be passed on to bank customers, hurting families straining financially under three years of inflation, especially the poor.

Raising the federal deposit insurance limit is also questionable, given that most money held by small businesses and individuals is covered by the current threshold. Not even a full 1% of account holders maintain more than $250,000. That means this proposal to expand the government backstop would be regressive. Consequently, consumers and banks are incentivized to pursue riskier investments, while taxpayers pick up the tab when the gamble doesn’t work out. 

The FDIC has also targeted innovative lenders, such as financial technology companies. Fintech companies provide consumers with digital banking and investing services such as saving, borrowing, investing, paying, and sending money. Some fintechs form relationships with small banks that cannot afford to provide these digital services to their customers. Using new guidance released this year, the FDIC is bullying banks to back away from doing business with fintechs. By restricting fintechs, the FDIC is shrinking banking options for regular Americans.

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Let’s also not forget that under Gruenberg’s leadership, the FDIC teamed up with the Justice Department to urge banks to choke off access to small-dollar lenders (also known as payday lenders) and merchants of goods they disfavored, such as firearms. Limiting access to credit hurts the millions of unbanked and underbanked people, many of whom are racial minorities and women, and it’s not the FDIC’s role to try to use its power to limit people’s freedoms.

Gruenberg’s presence on the FDIC delivers a tiebreaking vote on contentious matters and protects President Joe Biden’s corrosive regulatory agenda. That may be why key Democratic leaders, including Sen. Elizabeth Warren (D-MA) and Rep. Maxine Waters (D-CA), refused to call for his resignation. That’s not an excuse, but just another reason that this irredeemably compromised chairman should leave ASAP. 

Patrice Onwuka is the director of the Center for Economic Opportunity at Independent Women’s Forum and cohost of WMAL’s O’Connor & Company. 

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