FDIC chair says he’ll resign once successor is confirmed

Federal Deposit Insurance Corp. (FDIC) Chair Martin Gruenberg announced Monday he will resign once his successor is confirmed by the Senate after several reports documented a culture of sexual harassment, misconduct and retaliation at the agency under his leadership.

Gruenberg’s announcement followed months of pressure from lawmakers and mounting allegations of inappropriate workplace conduct against him and other senior FDIC officials.

“It has been my honor to serve at the FDIC as Chairman, Vice Chairman, and Director since August of 2005. 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,” Gruenberg said in a statement.

“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.”

The White House said Monday that Biden will “soon” put forward a new nominee for FDIC chair, adding that it expects the Senate to confirm the nominee “quickly.”

“In his long tenure of service at the FDIC, Chairman Gruenberg has helped protect the economy from financial instability and worked to ensure the banking system serves more Americans fairly,” deputy press secretary Sam Michel said in a statement.

“We thank him for both his commitment to swiftly implement the recommendations made in the recent report and his willingness to stay at FDIC until his successor is confirmed in order to continue to safeguard our nation’s financial stability during this time of transition,” Michel added.

The Wall Street Journal released a series of bombshell reports last year documenting a long a record of misogynistic and abusive behavior at the agency under Gruenberg. A investigative report from law firm Cleary Gottlieb Steen & Hamilton confirmed the Journal’s findings, prompting an apology from Gruenberg.

Gruenberg, a Democrat, had served on the FDIC board since 2005. He served several stints as chair, vice chair and acting chair of the agency before President Biden appointed him to be chair in 2023.

Senate Banking Committee Chair Sherrod Brown (D-Ohio) urged President Biden earlier Monday to nominate a new FDIC chair to replace Gruenberg.

Following the announcement Brown said Gruenberg’s resignation would “of course” have implications for the implementation of Basel III, the sweeping set of international banking regulations that require banks to hold more capital.

“The White House needs to move quickly and nominate somebody and move forward,” he said Monday afternoon.

Brown is the highest-ranking Democratic lawmaker to call for Gruenberg’s replacement or resignation so far. Like many of his fellow Democrats, the Senate Banking chair had previously called on the FDIC chair to make changes to the agency but did not urge him to step down.

“After chairing last week’s hearing, reviewing the independent report, and receiving further outreach from FDIC employees to the Banking and Housing Committee, I am left with one conclusion: there must be fundamental changes at the FDIC,” Brown said in a statement.

“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,” he continued.

Republican lawmakers across the board have called for Gruenberg’s resignation, accusing their Democrats colleagues of keeping the FDIC chair in place to continue progressing Biden’s regulatory agenda.

Democrats have, in turn, accused GOP lawmakers of seeking to oust Gruenberg to block the administration’s various banking proposals.

Updated at 6:07 p.m. EDT. Tobias Burns contributed.