FDIC Chair Martin Gruenberg to Resign Following Investigation

This is a breaking story. More will be added as it becomes available. 

The Federal Deposit Insurance Company (or FDIC) Chairman Martin Gruenberg has resigned from the agency on Monday (May 20) following the results of a federal probe which found a widespread culture of sexual harassment and discrimination in his office—and throughout the agency. 

“In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed,” Gruenberg said in a statement. “Until that time, I will continue to fulfill my responsibilities as Chairman of the FDIC, including the transformation of the FDIC’s workplace culture.” 

When asked, Deputy White House Press Secretary Sam Michel said, “The President will soon put forward a new nominee for FDIC Chair who is committed to those values and to protecting consumers and ensuring the stability of our financial system, and we expect the Senate to confirm the nominee quickly,” Michel said. 

The announcement follows an earlier statement from Sen. Sherrod Brown, D-Ohio, who Monday morning called on Biden to “immediately nominate a new Chair” and said the Senate should “act on that nomination without delay.” 

The 174-page report, which drew from accounts of more than 500 people, also included, in part, allegations of Gruenberg’s short temper—accusing him of engaging in bullying and verbal abuse. Employees described the chairman as “aggressive” and “harsh,” according to the report. In one instance, Gruenberg allegedly screamed profanities at employees after they delivered bad news, the report said. 

“For far too many employees and for far too long, the FDIC has failed to provide a workplace safe from sexual harassment, discrimination, and other interpersonal misconduct,” the report said. 

Investigators said that while Gruenberg’s alleged behavior is not the “root cause” of misconduct at the FDIC, “we do recognize that, as a number of FDIC employees put it in talking about Chairman Gruenberg, culture ‘starts at the top.’” 

Previously, Gruenberg testified on May 15 in front of the House Financial Serivces Committee, where he apologized for the misconduct at the agency and pledged to follow the recommendations of the report. At the meeting, he was criticized by members of both parties and by congressional members outside of the committee. 

Gruenberg, a Democrat, was nominated by Biden for the position in 2022. 

It is not clear when Gruenberg will leave the agency, although, by all accounts, it will be soon. If he leaves before the President nominates an individual—who is then confirmed—it would leave the Board of Directors politically deadlocked with two Democrats and two Republicans. 

According to the FDIC’s bylaws, Republican Vice Chairman Travis Hill would assume the chairman’s responsibilities should Gruenberg leave without a replacement. 

This is a breaking story. More will be added as it becomes available.

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Kyle G. Horst

Kyle G. Horst is a reporter for MortgagePoint. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at kyle.horst@thefivestar.com.
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