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FDIC Chairman Martin Gruenberg to Resign as New Banking Rules Loom
FDIC Chairman Martin Gruenberg said Monday he is prepared to resign less than a week after he rejected bipartisan calls for him to step down, a move that could have implications for an aggressive campaign to impose tougher regulations on U.S. banks. USA.
Gruenberg has been the target of reports revealing a toxic workplace rife with sexual harassment, bullying and other misconduct, including a 234-page independent review commissioned following stories published by the Wall Street Journal.
Just last week, the head of the FDIC made it clear that he wanted to remain in charge so he could help the agency solve its problems.
That changed this week as his support on Capitol Hill waned.
President of the Federal Deposit Insurance Corporation, Martin Gruenberg. (Reuters) (REUTERS/Reuters)
“In light of recent events, I am prepared to step down from my responsibilities as soon as a successor is confirmed,” he said in a statement. “Until then, I will continue to fulfill my responsibilities as Chairman of the FDIC, including transforming the FDIC’s workplace culture.”
Perhaps the turning point came after Senate Banking Committee Chairman Sherrod Brown (D-Ohio) on Monday called on President Biden to nominate a new agency chairman to restore the FDIC’s workplace culture . Brown did not call for Gruenberg’s resignation during a committee hearing last week.
“There must be fundamental changes at the FDIC,” Brown said. “These changes begin with new leadership, which must correct the agency’s toxic culture and put the women and men who work there – and its mission – first.”
“That’s why I urge the President to immediately nominate a new chairman who can lead the FDIC in this challenging time, and for the Senate to act on that nomination without delay,” Brown said.
Gruenberg’s replacement must be nominated by the president and confirmed by the Senate.
Biden’s deputy press secretary Sam Michel said that “while the FDIC is an independent agency, as we have said, the president, of course, expects the administration to reflect the values of decency and integrity and protect rights and dignity of all employees.”
See more information: What is the FDIC and how does it work?
Senator Sherrod Brown (D-Ohio). (Reuters) (REUTERS/Reuters)
“The President will soon introduce a new nominee for Chairman of the FDIC who is committed to these values and to protecting consumers and ensuring the stability of our financial system, and we expect the Senate to confirm the nominee quickly.”
Gruenberg’s departure could have implications for the financial world. This comes at a time when the FDIC, Federal Reserve and Office of the Comptroller of the Currency are pushing for a comprehensive review of how banks are regulated following last spring’s regional banking crisis.
The story continues
Last July, U.S. proposed banking regulators increasing capital requirements for banks by an aggregate total of 16%, widening the scope of the new rules to include banks with just $100 billion in assets.
Officials argued the changes were needed to strengthen banks and better prepare them for shocks like this spring’s crisis, when the failures of Silicon Valley Bank, Signature Bank and First Republic triggered deposit withdrawals.
The banks, their lobbyists and some Republican lawmakers defend the proposal it would restrict lending and hurt the economy.
Even Federal Reserve Chairman Jerome Powell suggested reservations about the capital proposal and its impact and said he expects changes to be made.
Michael Barr, the Fed’s vice chairman for supervision, said Monday that he expects “broad and material changes” to the proposal.
Senator Elizabeth Warren (D-Mass.) said at last week’s Senate Banking Committee hearing that Republicans wanted Gruenberg to resign so they could have more control over banking regulations.
“His firing would do nothing to improve the culture of the FDIC, but it would give Republicans a veto over banking policy,” Warren said at the hearing, which Gruenberg attended.
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