WASHINGTON — Martin Gruenberg, the chairman of the bank regulator currently embroiled in a workplace behavior scandal, appeared to hold on to
The reaction on Capitol Hill has been swift and harsh. Republicans immediately called for Gruenberg's removal, and continued to do so during the Wednesday hearing in the House Financial Services Committee.
"The fact that you have yet to resign proves you take no responsibility for your actions," committee Chairman Patrick McHenry, R-N.C., said. "And let me be clear, showing up today is not an act of courage, it's an act of hubris."
McHenry questioned Gruenberg's reaction during the failures of Silicon Valley Bank and Signature Bank during a stressful weekend last year, and whether his anger could have contributed to any oversight issues of Signature in particular, of which the FDIC was the primary regulator.
Gruenberg said that he is "not aware" that this was a significant contributor.
The embattled regulatory chief found some defenders in Rep. Maxine Waters, D-Calif., and his fellow regulator and FDIC board member, acting Comptroller of the Currency Michael Hsu.
Waters continued to criticize the Cleary Gottlieb report and its focus on Gruenberg instead of former Republican leaders, who are no longer at the agency.
"While the report scrutinizes Chair Gruenberg, I am disappointed the report seemed to downplay workplace concerns and complaints of harassment that occurred under prior Republican agency leadership. Regardless, the FDIC as an institution has a lot of work to do," she said.
Hsu, alongside FDIC board member Jonathan McKernan, co-chairs the special committee overseeing the independent third–party review of the agency's workplace culture, and occupies a unique position in the FDIC workplace debate.
He, for the first time, expressed confidence that Gruenberg can lead the agency through the reforms that the Cleary Gottlieb report recommends.
"I believe that Chairman Gruenberg has accepted responsibility," Hsu said.
Hsu said that in one instance, involving the events that led to former FDIC Chairman Jelena McWilliams' departure after an ideological scuffle over bank merger policy, Gruenberg's temperament was "passionate," but not "angry."
Gruenberg, for his part, said that he apologizes for his behavior, and is committed to changing the agency.
"I understand keenly how hurt they feel, the impact these kinds of experiences have," Gruenberg told the committee, referring to the people who spoke to the investigators for the Cleary Gottlieb report. "And it's why I am totally committed, and I believe the agency is totally committed."
In his opening testimony, Gruenberg said that the FDIC is establishing an independent Office of Professional Conduct, reporting directly to the agency's board.
Gruenberg also testified that the FDIC has fired at least four individuals in relation to the workplace report. He later added that he agrees more people need to be terminated from the agency.
While no further Democrats called for Greunberg's resignation, several had harsh criticism for him, and some of the legislators said that he should resign if FDIC employees ask him to.
"Sit down with them and persuade them you're the right leader," Rep. Jim Himes, D-Conn., said. "If they're not persuaded, I hope you do the right thing."
Himes nodded toward the probable impact of Gruenberg's potential resignation. Should Gruenberg leave the agency, the agency's Vice Chairman Travis Hill, a Republican, would lead.
"There's more of a whiff of politics up here right now," Himes said.
Rep. George Meeks, D-N.Y., said he was "pissed off" about the information in the report.
"How can trust and credibility come back to that agency for all of the workers that were denied and people who may want to work at the FDIC, how can that trust and credibility be returned under current leadership?" Meeks said.
Others still suggested they need to be convinced that Gruenberg should continue his tenure as chairman.
"I'm not so sure you're the guy to make the changes, but maybe you are," said Rep. Stephen Lynch, D-Mass. We need to see."
Former Republican heads of the agency, Sheila Bair and Jelena McWilliams, found some defenders in Republican lawmakers.
While some Democrats, including Waters, have criticized the report's handling of previous leadership, Rep. Bill Huizenga, R-Mich., chairman of the panel's oversight and investigations subcommittee, said that the report's investigators told him that had they found negative information about Bair or McWilliams, they would have included it.
"Those two women were cleaning up your messes," Huizenga said.
Rep. Bill Foster, D-Ill., the sole Democrat who last week said he thought Gruenberg should step down, did not renew his call for Gruenberg to resign.
"As someone who has led successful organizations and teams, I know that an organization's culture starts at the top, and we need agency leaders that comprehend the problem and are committed to implementing and following through on meaningful reforms that will ensure our agencies can attract and retain dedicated staff," Foster said. "I encourage my colleagues to take the time to fully review the facts of this situation."
A spokesperson for Foster's office said that his previous call for Gruenberg to step down still stands.
