Republican-led House committee to investigate the conduct of FDIC Chair Gruenberg at the agency

An inquiry conducted by the Wall Street Journal exposed charges of sexual harassment and discrimination against female staff at the Federal Deposit Insurance Corporation.

 CNN based in New York --

 Friday saw members of the House Financial Services Committee declare that they had initiated an inquiry into the behavior of Federal Deposit Insurance Corporation Chair Martin Gruenberg while at the agency.

 The Wall Street Journal conducted an investigation involving more than a hundred current and former FDIC staff members, and it was revealed that disciplinary action was rarely taken against supervisors who were accused of sexual misconduct and other violations.

 Tuesday, Gruenberg appeared before the Senate Banking Committee for previously planned semi-annual testimony that had nothing to do with the allegations. He declared he had no knowledge of the claims of extensive sexual harassment and discrimination at the agency, however he did not appear to be unaware of the chronic troublesome atmosphere that the inquiry portrayed.

 Gruenberg expressed to senators that he was "extremely disturbed and profoundly distressed" by the report, claiming that female employees had been sent pictures of their male supervisors' genitalia, were instructed to use sexual activity to better their careers, and were not given the same chances as their peers.

 Gruenberg declared that, after reading the report, he informed the senators that "the FDIC personnel have endured appalling circumstances which are unacceptable and should not be tolerated."

 On Wednesday, during his statement before the House Financial Services Committee, which was part of a planned hearing, Gruenberg refuted that he had ever been scrutinized for "inappropriate conduct."

 When the House committee reconvened on Wednesday after its recess, Gruenberg admitted that he had been the subject of a probe in 2008 when he was the Vice Chair at the FDIC. This was after the Wall Street Journal contacted the FDIC for a statement, which was documented in the newspaper's Wednesday edition.

 The Journal's reporting mentioned an internal probe that was done in regards to multiple accusations of temperament problems.

 Gruenberg reported to the members of the House that he was unaware of any results arising from the review. He then offered to provide them with any further details they may need.

 On Friday, a letter written by House Financial Services Committee Chair, Representative Patrick McHenry, was sent to Gruenberg informing him of the investigation. The letter expressed concern regarding Gruenberg's contradictory statements made during the hearing before the Committee, with two high ranking Republicans signing off on it.

 Their statement implied that the effectiveness of your leadership was questionable.

 CNN's request for a response from Gruenberg and the FDIC went unanswered.

 In response to a question from Senator Mike Rounds of South Dakota, Gruenberg stated that, as a general rule, he was not aware of the claims in the Journal's article prior to its Monday publication.

 Senator Thom Tillis, a Republican from North Carolina, questioned whether he should interpret anything from Gruenberg's reply.

 Gruenberg informed him that he was unaware of the individual circumstances.

 Not long after the report was made public, the FDIC declared the engagement of a law firm to do a separate inquiry into the claims.

 On Tuesday, Gruenberg expressed his hope that the results of the review would be released within a period of 90 days or less and stated his commitment to being totally transparent during the entire process.

 The House committee declared they would also be conducting their own independent inquiry into the purported workplace misconduct on a broad scale and if this had any influence in obstructing the agency's capacity to supervise financial institutions.

 Witnesses from the Federal Reserve and the Office of the Comptroller of the Currency gave testimony to Senators and House members on matters connected to banking regulation. Michael Barr, Vice Chair for Supervision at the Federal Reserve, and Michael Hsu, Acting Comptroller at the Office of the Comptroller of the Currency, were among the speakers.

 Martin Gruenberg, chairperson of the Federal Deposit Insurance Corporation, expressed his concern to senators on Tuesday in regards to the claims made in a Wall Street Journal investigation.

 In 2005, Gruenberg became a member of the FDIC board and was appointed as chairperson in the beginning of the year. During Jelena McWilliams' leadership of the FDIC in 2020, the inspector general's report pointed out that the organization was lacking in its sexual harassment prevention program and that it ought to improve its regulations and procedures. This was detailed in a report.

 In 2019, the inspector general conducted a survey of 2,376 people, which revealed that 8% had been sexually harassed from 2015 to 2019. This was included in the report.

 Gruenberg asserted to the senators that previous FDIC chairs had a duty to take action, regardless of the fact that he was merely Acting Chair since February 2022 when the inspector general's study had been revealed.

 On Thursday, Vice Chair Travis Hill and Director Jonathan McKernan of the FDIC issued a joint statement asking Chairman Martin Gruenberg to step away from the FDIC's independent probe.

 The Board of the FDIC, not its management, should be responsible for deciding the extent of the inquiry, the satisfactory set-up for the daily management of the examination, and who carries out the investigation, the representatives said.

 Hill and McKernan declared this week that it is their and the other board members' job to ensure the FDIC imposes accountability on any personnel that have acted inappropriately.

 Gruenberg testified on Tuesday that the FDIC had adopted the 15 suggestions put forth in the 2020 inspector general report for avoiding and dealing with sexual harassment, though he admitted that this hadn't been enough to alter the culture of the agency.

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