Gruenberg, in wake of sexual harassment scandal, indicates he will step down as FDIC chairman once a successor is confirmed

Martin Gruenberg, chairman of the board that oversees the federal bank deposit insurance agency, said he would step down from the post – and leave the agency – once a successor is confirmed by the U.S. Senate, he said in a statement issued late Monday.

Gruenberg, who has served as either a member, vice chairman or chairman of the Federal Deposit Insurance Corp. (FDIC) for 19 years, was criticized for his lack of temper control in a report issued earlier this month related to claims of sexual harassment. Gruenberg was not linked to harassment in the report; however, the report pointed to the chairman’s hot temper as a contributing factor to reports of harassment not being adequately addressed by the agency.

The statement issued at 5 p.m. ET, said:

“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. 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 report, issued May 7, said that a failure to provide a workplace safe from sexual harassment, discrimination, and other interpersonal misconduct went on “for far too many employees and for far too long.” The report was sponsored by a special committee of the FDIC Board.

The report placed responsibility for the misconduct and culture directly at the top – with the office of the board Chairman Gruenberg. However, the report made no recommendation for Gruenberg’s removal or disciplining, indicating that is up to the Biden administration, Congress, or both.

The report by the special panel FDIC Board was prepared by the New York- and D.C.-based law firm Cleary Gottlieb Steen & Hamilton LLP, and overseen by the special committee. It also found that the agency’s management responses to allegations of misconduct “as well as the culture and conditions that gave rise to them have been insufficient and ineffective.”

To prevent those conditions from continuing and address another 10 “root causes” of workplace misconduct and culture issues identified in the report, the special committee’s report recommended “cultural and structural changes” at the agency.

That starts at the top, the report of the committee stated, with the agency’s leadership – particularly board Chairman Martin Gruenberg.

After noting that Gruenberg has been in a leadership position at the agency for nearly 20 years – including as board chairman for 10 of the last 13 years – the report said that leading cultural transformation at an agency that he has led for so long “presents unique challenges for Chairman Gruenberg, as do the incidents of – and resulting reputation for – losing his temper and expressing anger with staff.”

Statement by FDIC Chairman Martin J. Gruenberg