Banking and Finance Law Daily Wrap Up, OVERSIGHT AND INVESTIGATION—House Financial Services Committee Republicans renew calls for Gruenberg to quit FDIC, (Aug 15, 2024)
By Steven Melendez
The Representatives say the embattled chair continues to "politicize the FDIC" while awaiting his successor's confirmation.
Republican members of the House Committee on Financial Services reiterated their calls for Federal Deposit Insurance Corporation Chair Martin Gruenberg to resign, saying he is pushing partisan policies at the agency.
"Your unwillingness to leave the Federal Deposit Insurance Corporation (FDIC) continues to erode the credibility and independence of the agency you are tasked to protect," they wrote to Gruenberg.
Gruenberg has said after a sexual harassment scandal at the agency that he would leave his post after the Senate confirms his successor. But President Biden's nomination of Christy Goldsmith Romero, a commissioner at the Commodity Futures Trading Commission, remains pending before the Senate.
"We call upon you to do the right thing by resigning immediately," the committee members wrote. "It is only after you vacate the chairmanship that the FDIC can begin to resurrect any vestige of independence that remains following your tenure."
In the meantime, the lawmakers charge, the FDIC under Gruenberg continues to push controversial policies, many of them passing the FDIC's board through 3-2 partisan voting. Recent measures include changes relative to industrial bank charters, a pullback on policy related to brokered deposits, and increased oversight over large asset managers. These partisan votes included support from Acting Comptroller of the Currency Michael J. Hsu, a member of the FDIC's board, they point out, even though Hsu has never been formally nominated by Biden or considered by the Senate.
"Rather than work in a bipartisan manner to ensure broadly supported improvements to FDIC policies, regulations, and rules, you continue to pursue more partisan policies to the detriment of the FDIC’s independence," they wrote in their letter to Gruenberg. "Unfortunately for FDIC regulated banks, these drastic policy swings create uncertainty and needless expenses."
The Representatives called on Gruenberg to either resign his seat immediately or to appear before the House Financial Services Committee on September 19 to "explain yourself and your continued partisan policymaking efforts." In a statement, they also said that Gruenberg has failed to take proper steps to address the well-documented misconduct at the FDIC.
"Your continued efforts to push through partisan policymaking does a disservice not only to the FDIC, but the member institutions and the customers it serves," the Representatives wrote in the letter. "Moreover, it further confirms that your commitment to improving the FDIC’s general toxic culture was merely a thinly veiled effort to keep power."
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