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What the Heck Is Going on at the FDIC?

Congressional scrutiny is on the way for the Federal Deposit Insurance Corporation (FDIC) following reporting from The Wall Street Journal exposing the allegedly toxic workplace culture that has gone unchecked, leading to reported harassment and discrimination at the agency that is supposed to promote confidence in America's banking system. 


In a letter to the FDIC's chair Martin Gruenberg, Healthcare and Financial Services Subcommittee Chairwoman Lisa McClain (R-MI) and Rep. Andy Biggs (R-AZ) demand answers, documents, and a briefing to get a better understanding of what has gone wrong and why it was allowed to seemingly spiral without meaningful oversight or accountability. 

From the lawmakers' letter:

The reports by The Wall Street Journal describe an abusive culture of sexual harassment, and discrimination within the FDIC, and a lack of internal processes encouraging reporting and effective responses to such allegations. FDIC was established to restore and maintain confidence in times of crisis. On the heels of several bank failures which shook confidence in the banking system and led the Biden Administration to take unprecedented steps to contain further panic, the allegations of a culture of tolerating harassment at the FDIC weakens the credibility of your agency.

Reporting from the WSJ, summarized in the lawmakers' letter, details the reported misconduct:

According to reporting, female employees within the FDIC have been subjected to a hyper-sexualized culture, in which “[s]enior bank examiners texted female employees photos of their penises,” pressured subordinates to drink excessively, and subjected them to lewd comments and advances. Additionally, the article describes a culture which discouraged reporting and responding to misconduct. Female employees who refused to be a part of this abusive culture were sometimes retaliated against: they were not given opportunities to lead bank examinations, and were limited in their career advancement, creating additional pressure against reporting harassment.


Notably, Gruenberg testified before the House Financial Services Committee this month, then had to correct his sworn statement to confirm the FDIC chair had been previously investigated for inappropriate conduct in 2008, the letter noted. "Furthermore, in 2016, you were named as the acting head of the agency in a complaint alleging a pattern of harassment and discrimination on the basis of race, gender, and disability."

The Republican members of Congress continue, writing:

According to a FDIC Inspector General report from July 2020, the FDIC had ‘not established an adequate sexual harassment prevention program and should improve its policies, procedures, and training to facilitate the reporting of sexual harassment allegations.’ Based on these reports it appears that instead of addressing these issues, the FDIC may have turned a blind eye to sexual harassment and discrimination within its staff.


McClain and Biggs requested relevant information and documents from the FDIC "no later than December 4, 2023."

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