Bank Regulator Overseeing ‘Toxic’ Culture Loses Key Supporter in Senate

The top Democrat on bank regulation, Senator Sherrod Brown of Ohio, called on President Biden on Monday to choose a new leader for the Federal Deposit Insurance Corporation, saying he no longer had confidence that the agency’s current chair, Martin Gruenberg, could heal its “toxic culture.”

In a statement, Mr. Brown, the chairman of the Senate Banking Committee, said that after a committee hearing with Mr. Gruenberg on Thursday, he no longer believed that Mr. Gruenberg could put an end to a culture of sexual harassment and discrimination at the agency, which oversees U.S. banks. He called for Mr. Biden to nominate a successor and for the Senate to quickly confirm that person, who could then take over for Mr. Gruenberg.

“There must be fundamental changes at the F.D.I.C.,” Mr. Brown said. “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.”

An F.D.I.C. spokesman declined to comment.

The agency’s problems were detailed in a report released this month, prepared by the law firm Cleary Gottlieb, that the F.D.I.C.’s board commissioned in response to a series of articles in The Wall Street Journal. Since then, Mr. Gruenberg has faced some calls to resign from members of both political parties who said they felt he had played too big a role in shaping the agency’s culture in recent years, including by making the agency’s staff fear communicating with him.

Until Monday, Mr. Gruenberg, who is in the middle of a five-year term as chairman, was in a relatively safe position as a key protector of the Biden administration’s efforts to strengthen bank regulations. The fate of a proposed overhaul to capital requirements for the country’s largest banks hangs in the balance, with institutions furiously fighting it.

Mr. Gruenberg leads a five-person board of directors and, as a Democrat, helps keep the agency’s rules in line with Mr. Biden’s agenda.

Back to top button