House GOP Launches FDIC Investigation – On Friday, House Republicans initiated an inquiry into FDIC Chair Martin Gruenberg and accusations of workplace misconduct within the agency, intensifying political scrutiny on the leading bank regulator. GOP lawmakers led by House Financial Services Chair Patrick McHenry (R-N.C.) told Gruenberg in a letter they will use the panel’s “full arsenal” of oversight and investigative tools, including compulsory measures, “to ensure that our banking system remains safe and sound.”
“Chairman Gruenberg, the viability of your leadership is in question,” they said. The declaration came after reports from the Wall Street Journal detailed a persistent toxic work environment at the FDIC, indicating that Gruenberg and other agency leaders took minimal action to rectify the situation. House Republicans initiating the investigation, including Representatives Bill Huizenga of Michigan and Andy Barr of Kentucky, expressed their worry to Gruenberg.
They conveyed concerns that under his leadership, the FDIC might not have the capability to tackle the issues outlined in the stories. “Our concern is underscored by your nearly 20-year tenure in all aspects of leadership and management at the FDIC, including serving twice as chairman,” they said. “It has failed to instill the confidence the public needs to know their banking system is and will be safe and secure in the future.”
House Republicans have strongly resisted many aspects of Gruenberg’s agency agenda, notably a crucial proposal aimed at strengthening the banking sector, which now faces potential jeopardy due to the scandal. McHenry opposed Gruenberg’s nomination to lead the agency last year. An FDIC spokesperson assured full transparency and cooperation with the committee.
The FDIC has enlisted the law firm BakerHostetler to undertake an independent review of the situation. In a letter on Friday afternoon, Democrats on the Senate Banking Committee called for the FDIC’s acting inspector general to conduct a “comprehensive investigation into the workplace culture” at the agency. The lawmakers, led by Senate Banking Chair Sherrod Brown of Ohio, wrote that the inquiry should consider the allegations outlined in the Journal.
Including “a review of the 2008 management inquiry into then-Board Member Martin Gruenberg,” which was first reported by the paper. The top GOP member of the Senate Banking Committee, Tim Scott, said in a statement Thursday that the “allegations deserve a thorough and independent review followed by forceful action.” He added that Gruenberg “should seriously consider if he possesses the leadership the FDIC requires at this moment.”