Partisan disagreements dominate FDIC hearing on cultural issues

The Federal Deposit Insurance Corporation (FDIC) has found itself at the centre of a political storm, following a report released by law firm Cleary Gottlieb last month. The report alleged that the FDIC has failed to provide a workplace safe from sexual harassment, discrimination, and other interpersonal misconduct.

The controversy has led to calls for the resignation of FDIC Chair Martin Gruenberg, with Republicans leading the charge. Rep. French Hill and others in the Republican party have urged Gruenberg to step down immediately, while Rep. Stephen Lynch questions the sincerity of these calls, given the party's support for former President Trump amid sexual misconduct allegations.

However, Gruenberg has announced his intention to resign once a successor is confirmed. The proposed successor is President Joe Biden's nominee, Christy Goldsmith Romero, a commissioner with the Commodity Futures Trading Commission.

The hearing, which took place recently, was marked by political sparring between Democrats and Republicans, with Rep. Maxine Waters questioning whether Republicans would call for anyone found liable for sexual abuse to stand down from positions of power, referencing former President Trump.

Meanwhile, FDIC board members Michael Hsu and Jonathan McKernan, along with Joon Kim and Abena Mainoo from law firm Cleary Gottlieb, attended the hearing. Kim did not express an opinion on whether Gruenberg should be removed from his position, but Hsu, the acting comptroller of the currency, conditionally supported Gruenberg remaining in his position for now, provided he delivers on commitments and takes action.

Rep. Maxine Waters also noted that Republicans have not called for the resignation of Republican Vice Chair Travis Hill, which has added fuel to the fire of the political debate.

The hearing also saw Rep. Andy Barr criticize Democrats for not demanding an immediate resignation from Gruenberg and for Gruenberg's conditional resignation, suggesting it is a political maneuver. Barr argues that Gruenberg is more concerned about the Biden administration's partisan regulatory agenda than cleaning up the mess within the FDIC.

Rep. Patrick McHenry of North Carolina requested FDIC Chair Martin Gruenberg to appear at a separate hearing, but he could not attend due to a scheduling conflict.

The testimonies of FDIC employees have made it difficult for potential candidates like Mainoo to answer whether they would like to work at the FDIC. Rep. Hill asked Mainoo if the FDIC was a place she would like to work, to which she did not provide a direct answer.

The situation at the FDIC continues to be a topic of intense discussion, with the future of the organisation's leadership and its workplace culture hanging in the balance.