US regulator chief to resign amid widespread hostile conduct, discrimination in agency

By Ovunc Kutlu

ISTANBUL (AA) - The Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg will resign from his office after an independent investigation found in April widespread hostile and abusive conduct, sexual harassment, and discrimination in the agency.

"It has been my honor to serve at the FDIC as Chairman, Vice Chairman, and Director since August of 2005," Gruenberg said in a statement on Monday. "Throughout that time I have faithfully carried out the critically important mission of the FDIC to maintain public confidence and stability in the banking system."

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

Senator Sherrod Brown, a Democrat from the state of Ohio, called for new leadership at the FDIC on Monday.

"Those changes begin with new leadership, who must fix the agency’s toxic culture and put the women and men who work there – and their mission – first," said Brown, who is the chairman of the Senate Committee on Banking, Housing, and Urban Affairs.

Brown, in addition, called on President Joe Biden to immediately nominate a new chair for the FDIC, which is the top regulatory agency responsible for the American banking industry.

Law firm Cleary Gottlieb Steen & Hamilton LLP was appointed by the FDIC to conduct an independent review of allegations of sexual harassment and interpersonal misconduct at the agency, including "hostile, abusive, unprofessional, or inappropriate conduct, as well as management’s response to these allegations."

"Over 500 individuals bravely reported into our hotline, often painfully and emotionally recounting experiences of sexual harassment, discrimination, and other interpersonal misconduct that they have suffered at the FDIC," said the law firm in its review report released in April.

"Those who reported expressed fear, sadness, and anger at what they had to endure. Many had never reported their experiences to anyone before, while others who had reported internally were left disappointed by the FDIC’s response," it added.

The law firm's independent review, in addition, included reports about Gruenberg’s "reputation for having a temper," and "deeply unsettling exchanges during which he was extremely 'harsh,' 'aggressive,' and 'upset,' particularly when being delivered bad news or conveyed views with which he disagrees," it said.

A number of FDIC employees, including senior executives, also reported instances of Gruenberg losing his temper and interacting with staff in a "demeaning and inappropriate manner," according to the report.