Sherrod Brown urges Biden to replace FDIC head, diverges from Democratic stance

Senate Banking Committee Chairman Sherrod Brown (D-OH) on Monday called on President Joe Biden to replace Federal Deposit Insurance Corporation Chairman Martin Gruenberg amid toxic workplace culture allegations at the agency.

The move was a departure from Brown’s Democratic colleagues but comes as he battles for reelection in a competitive race and has increasingly distanced himself from Biden on an array of policies.

Brown said that given the troubled claims against the bank regulator and its leadership under Gruenberg, there “must be fundamental changes at the FDIC.”

“Those changes begin with new leadership, who must fix the agency’s toxic culture and put the women and men who work there — and their mission — first,” he said in a statement.

Brown called on Biden to “nominate a new chair” immediately so that the Senate could confirm him or her, a move that would avoid an immediate resignation from Gruenberg and avert temporary Republican control of the agency by Vice Chairman Travis Hill.

“I expect that the entire Banking and Housing Committee and Senate leaders, in both parties, will put politics aside and join this effort to bring new leadership to the agency to ensure a safe workplace for the women and men who protect our financial system,” Brown said.

The White House and FDIC did not respond to requests for comment. White House press secretary Karine Jean-Pierre told reporters last week that she did not “have any personnel announcements to make at this time.”

“The FDIC is an independent agency, so would refer you to them as to anything else coming out from the FDIC on this particular matter,” she said.

Reports from the Wall Street Journal and an independent law firm audit exposed a pervasive toxic workplace environment at the FDIC that spanned over some two decades and included sexual harassment and discrimination. Gruenberg was reportedly demeaning and inappropriate to staff and would frequently lose his temper.

While Republicans have been vocal in their calls for Gruenberg to resign, Democrats have largely stopped short of such action. Brown’s position could spur resignation calls from more Democrats.

Senate Republicans’ campaign arm described Brown’s stance as “yet another election-year flip-flop as he gets increasingly desperate.”

“Sherrod Brown is scrambling, flipping back and forth between trying to appease Joe Biden one day and then lying to Ohio voters about his record the next,” National Republican Senatorial Committee spokesman Philip Letsou said. “The truth is Sherrod Brown has spent half a century in politics doing the Democrats’ dirty work, and now his far-left record is coming home to haunt him.”

Gruenberg has been on the FDIC Board of Directors since 2005 and was previously chairman from 2012 to 2018. His latest stint as chairman began in January 2023.

Former FDIC Chairwoman Sheila Bair, who led the regulating agency from 2006 to 2011, said Monday that she’s “known and worked with Chairman Gruenberg for years” but that there’s “a desperate need for change at the FDIC.”

“This controversy is hurting him and his agency,” she posted on social media. “For his own sake and everyone at the FDIC, he should announce his intention to resign effective with the appointment and confirmation of a new Chair.”

Gruenberg was grilled by lawmakers on Capitol Hill last week during testimony to House and Senate committees, including to Brown’s banking panel. He’s so far rebuffed calls for his ouster and told infuriated members of Congress that he would correct the problems plaguing the FDIC.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

“I take full responsibility to anyone who has experienced sexual harassment, discrimination, or other misconduct at the FDIC,” Gruenberg told the House Financial Services Committee. “I again personally want to apologize and express how deeply sorry I am.”

He continued: “I also acknowledge my own failures as chairman both in failing to recognize how my temperament and meetings impacted others and for not having identified the deeper cultural issues at the FDIC sooner.”