The Federal Deposit Insurance Corp. (FDIC) headquarters in Washington, DC, US, on Monday, March 13, 2023.
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A special committee will oversee a review of alleged toxic workplace culture and sexual harassment, the U.S. Federal Deposit Insurance Corporation announced Tuesday, as the top banking regulator faced a reckoning following reports in the Wall Street Journal this month.
“The Board supports taking all actions necessary to identify and address the root cause of the problem and to promote accountability,” the FDIC’s board of directors said in a statement.
Citing interviews with more than 20 women who had quit, the Wall Street Journal reported last week the agency had failed to eradicate widespread harassment and misogynist behavior among staff and that FDIC Chair Martin Gruenberg himself had earned a reputation for bullying and leniency in cases of misconduct.
The allegations have rocked the agency as Republican lawmakers called for Gruenberg to resign. Gruenberg has expressed dismay and vowed to address the problems as a top priority.
Federal Deposit Insurance Corporation Chair Martin Gruenberg testifies during the House Financial Services Committee hearing titled “Oversight of Prudential Regulators,” in Rayburn Building on Wednesday, November 15, 2023.
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The special committee will be co-chaired by two FDIC board members, Acting Comptroller of the Currency Michael Hsu, a Democrat, and board member Jonathan McKernan, a Republican.
Last week, McKernan and FDIC Vice Chair Travis Hill, also a Republican, had demanded that Gruenberg recuse himself from oversight of any review and, in a statement on Tuesday, Hill the board had unanimously measures to ensure the review’s independence.
In a sign of the turmoil that has beset the agency since the Journal expose, the demands for recusal coincided with a scheduled board meeting that was abruptly canceled minutes after it had been due to begin.
The board resolution approving the review includes provisions “that restrict the ability of FDIC management and FDIC Board members not on the Special Committee to engage with or influence the review,” Hill said, noting that vote to support the decision had depended on this.