Senate Banking chief calls on Biden to replace FDIC chair after sexual harassment probe

Senate Banking Committee Chair Sherrod Brown (D-Ohio) called on President Biden on Monday to replace the chair of the Federal Deposit Insurance Corporation (FDIC) in the wake of reports of a toxic workplace environment at the agency.

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

“After chairing last week’s hearing, reviewing the independent report, and receiving further outreach from FDIC employees to the Banking and Housing Committee, I am left with one conclusion: there must be fundamental changes at the FDIC,” Brown said in a statement.

“Those changes begin with new leadership, who must fix the agency’s toxic culture and put the women and men who work there — and their mission — first,” he continued. “That’s why I’m calling on the President to immediately nominate a new Chair who can lead the FDIC at this challenging time and for the Senate to act on that nomination without delay.”

The Hill has reached out to the White House for comment.

Brown’s call to replace Gruenberg marks a significant shift for the Senate Banking chair; he previously joined other Democrats in urging Gruenberg to make changes at the agency rather than step down.

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

Both sides have accused each other of playing politics, with Republicans alleging Democrats declined to call for Gruenberg’s resignation because it would put a wrench in Biden’s regulatory agenda.

Likewise, Democrats accused their GOP colleagues of failing to acknowledge problems also existed under prior Republican leadership of the FDIC and attempting to gain a veto over Biden’s policymaking efforts.

“I expect that the entire Banking and Housing Committee and Senate leaders, 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 on Monday.

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

A review by the law firm Cleary Gottlieb Steen & Hamilton, which released its findings earlier this month, largely confirmed the Journal’s reporting and led to renewed scrutiny on Gruenberg.

Updated at 10:56 a.m. EDT.

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