FDIC chair to quit after scathing report on toxic culture

investmentnews.com:

Martin Gruenberg will step down as head of the Federal Deposit Insurance Corp. after findings of a toxic work environment put the regulator at the center of a heated political fight and fueled calls for his removal. 

Gruenberg, 71, faced mounting pressurefollowing a scathing report that detailed allegations of harassment and discrimination at the bank regulator during his tenure. Those findings earlier this month by law firm Cleary Gottlieb Steen & Hamilton were based on accounts from more than 500 people and a months-long probe into a Wall Street Journal article about female bank examiners facing a “sexualized, boys’ club environment.” 

“In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed,” Gruenberg said in a statement. 

The White House said it will move quickly to nominate a successor and thanked Gruenberg for staying on until a replacement is confirmed. Such a move would ensure the FDIC board maintains a majority of Democratic appointees, and can keep the administration’s regulatory agenda on track at least through the election.

After surviving two bruising days of congressional hearings last week, the political pressure on Gruenberg surged Monday when a key Democrat called on President Joe Biden to replace him. Breaking with other top Democratic lawmakers, Senate Banking Committee Chairman Sherrod Brown said that new FDIC leadership was needed to ensure “fundamental changes.”

Since the law firm’s report was released on May 7, Gruenberg had vowed to fix the agency’s problems and apologized repeatedly to employees. Last week, he told lawmakers, including Brown, that he was the correct person to lead a cultural overhaul at the agency. 

The probe, which cited