Senate banking chief calls on Biden to replace FDIC chairman after sexual harassment investigation

Senate Banking Committee Chairman Sherrod Brown (D-Ohio) on Monday called on President Biden to replace the chairman of the Federal Deposit Insurance Corporation (FDIC) following reports of a toxic work environment at the agency.

Brown is the highest-ranking Democratic lawmaker to call for the resignation or replacement of FDIC Chairman Martin Gruenberg, a Democrat tapped by Biden to lead the top banking regulator.

“After chairing last week's hearing, reviewing the independent report, and receiving further assistance from FDIC staff to the Banking and Housing Committee, I can only draw one conclusion: fundamental changes must occur at the FDIC.” , Brown said in a statement.

“These changes start with new leadership that must fix the agency's toxic culture and put the women and men who work there – and their mission – first,” he continued. “That is why I am calling on the President to immediately appoint a new Chairman to lead the FDIC during this challenging time, and for the Senate to take action on that appointment without delay.”

The Hill has contacted the White House for comment.

Brown's call to replace Gruenberg marks a significant shift for the Senate bench chairman; he previously joined other Democrats in urging Gruenberg to make changes at the agency rather than resign.

While some Democrats have called for the FDIC chairman to resign, most of the pressure has come from Republican lawmakers.

Both parties have accused each other of playing politics, with Republicans claiming Democrats refused to call for Gruenberg's resignation because it would undermine Biden's regulatory agenda.

Likewise, Democrats accused their Republican colleagues of failing to recognize that problems also existed under the FDIC's previous Republican leadership and of trying to veto Biden's policy efforts.

“I expect that the entire leadership of the Banking and Housing Committee and the Senate, in both parties, will put politics aside and join this effort to bring new leadership to the agency to ensure a safe workplace for the women and men who protect our financial system,” Brown added Monday.

Gruenberg has been under fire for months after a bombastic report from The Wall Street Journal last fall documenting a culture of sexual harassment, misconduct and retaliation at the FDIC.

An investigation by the law firm Cleary Gottlieb Steen & Hamilton, which released its findings earlier this month, largely corroborated the Journal's reporting and led to renewed scrutiny of Gruenberg.

Updated at 10:56 a.m. EDT.

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