Embattled Federal Deposit Insurance Corp. (FDIC) Chair Martin Gruenberg took the hot seat in front of the House Financial Services Committee Wednesday morning following a scathing report on widespread sexual harassment and discrimination at his agency.
“Showing up today is not an act of courage. It’s an act of hubris,” Rep. Patrick McHenry (R-N.C.), chair of the Financial Services panel, told Gruenberg. McHenry and numerous other Republicans have called for Gruenberg to resign.
Gruenberg has faced pressure for months after the Wall Street Journal released a bombshell report last year documenting a culture of sexual harassment, misconduct and retaliation at the top bank regulator. A report issued last week by law firm Cleary Gottlieb Steen & Hamilton confirmed the Journal's findings and highlighted stunning instances of inappropriate behavior.
Democrats have been split on whether Gruenberg should step down. Ranking member Maxine Waters (D-Calif.) accused Cleary Gottlieb of political bias, focusing on Gruenberg and not on Republican leaders of the agency.
“The report seemed to downplay workplace concerns and complaints of harassment that occurred under prior Republican agency leadership,” Waters said.
McHenry's scolding came as Gruenberg appeared for a hearing beside other top bank regulators as they mull a set of new rules.
A set of major banking reforms, known as the Basel III endgame, is now being implemented by financial regulators at the FDIC, Federal Reserve and Office of the Comptroller of the Currency (OCC), though the Fed and some lawmakers have called for a reproposal of the international banking plan that would require an increase of capital requirements.
“On the issue of Basel III, I want to make my ongoing position clear that the fundamentally flawed proposal must be scrapped and at most there should be a reproposal, if justifiable,” said Rep. Andy Barr (R-Ky.), chair of the Financial Institutions subcommittee.
