FDIC Faces Calls for Reform Over Workplace Misconduct and Systemic Issues Following External Review

According to a recent external review, the Federal Deposit Insurance Corporation (FDIC) requires significant reforms to address widespread workplace issues such as sexual misconduct, racism, and other longstanding problems. The review, carried out by the legal firm Cleary Gottlieb Steen & Hamilton, gathered testimony from over 500 people, most of whom were current staff. This news comes after the Wall Street Journal exposed these allegations in November, leading some Republican legislators to call for the resignation of FDIC Chair Martin Gruenberg. However, Maxine Waters, the ranking Democrat on the US House Financial Services Committee, has yet to demand Gruenberg’s departure. While acknowledging the seriousness of the issues revealed, Waters urged Gruenberg to take immediate action to rectify the situation and rebuild employee confidence in his leadership and the agency’s overall integrity. Senator Sherrod Brown, the Chairman of the US Senate Banking Committee, has also declined to request Gruenberg’s resignation, which may jeopardize the Biden administration’s broader financial regulatory strategy.