Three leading Republicans on the House Financial Services Committee stated the panel will examine Federal Deposit Insurance Corp. Chairman Martin Gruenberg following claims of work environment misbehavior at the firm.
The allegations turned up consistently throughout a set of congressional hearings today with Gruenberg and other monetary regulators, and criticism of the firm and its chairman have grown throughout the week.
The GOP legislators, led by committee Chairman Patrick McHenry, R-N.C., composed in a letter to Gruenberg that the panel will utilize its “full arsenal” of investigative tools to analyze Gruenberg and the firm. Reps. Bill Huizenga, R-Mich., the chairman of the subcommittee on oversight and examinations, and Rep. Andy Barr, R-Ky., chairman of the subcommittee on banks and financial policy, signed up with McHenry in the letter.
“Chairman Gruenberg, the viability of your leadership is in question,” the 3 legislators composed.
The panel has the capability to utilize obligatory steps, such as subpoenas, to force the FDIC to comply with its examination.
“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,” the legislators composed. “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.”
The legislators drew a possible direct connection in between the workplace culture explained in a Wall Street Journal examination of a decadeslong hazardous environment that caused the departure of female bank inspectors, and a staffing lack mentioned by the firm in its postmortem evaluation of the failure of Signature Bank.
“Your report’s limited discussion of staffing challenges related to bank examiners did not consider how the long-standing toxic FDIC culture inhibits employee retention,” the legislators composed. “By ignoring or choosing to remain silent about workplace misconduct at the FDIC, your leadership may have contributed to the financial instability and threats to financial security of Americans that were observed in March.”
While Republicans have actually been the harshest critics of Gruenberg and the firm following the claims, Democrats have actually likewise voiced issues about the report.
“The FDIC’s employees play a critical role in ensuring our financial system operates in a safe and sound manner,” a group of 11 Senate Banking Committee Democrats led by Chairman Sen. Sherrod Brown, D-Ohio, composed in a letter Friday to the FDIC’s acting inspector general.
“It is imperative that the FDIC recruit and retain talented public servants and create a safe and professional work environment. Allowing employees that have engaged in misconduct to stay on the job, while losing talented employees because of the failure to meaningfully address these systemic issues, compromises public trust in the FDIC. The issues raised in these reports require immediate attention.”