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The House Financial Services Committee is set to investigate the Federal Deposit Insurance Corporation (FDIC) amid reports of a toxic work environment within the agency, including instances of sexual harassment and misogyny.
Announced on Friday by the committee’s top Republican members, the probe aims to examine the extent of misconduct and its potential effects on the banking system’s stability and security.
In a letter to FDIC Chairman Martin Gruenberg, Financial Services Chairman Patrick McHenry, Subcommittee Chairmen Bill Huizenga, and Andy Barr raised concerns about the FDIC’s capability to address these longstanding issues. Citing the agency’s persistent problems across different leadership eras, the lawmakers questioned Gruenberg’s effectiveness in resolving these matters, especially given his extensive tenure and roles in the FDIC, including two terms as chairman.
Gruenberg faced bipartisan questioning during his appearances before the Senate Banking, Housing and Urban Affairs Committee and the House Financial Services Committee. After initially denying any personal investigations for inappropriate conduct at the FDIC, he later amended his testimony, acknowledging a previous investigation in 2008.
The lawmakers highlighted the significance of this report, noting its failure to consider how the FDIC’s internal culture could hinder employee retention and potentially contribute to financial instability. “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,” the lawmakers said in their letter.
Adding to the FDIC’s challenges, the agency has been under the microscope for its oversight role following several high-profile bank failures. An April report on Signature Bank’s failure pointed to staffing issues affecting the FDIC’s supervisory efficiency.