Biden Nominates New FDIC Chair Amid Toxic Workplace Controversy

Ms. Romero, a Democrat, joined the Commodity Futures Trading Commission (CFTC) in March 2022. She served 12 years at the Treasury Department, including a decade as the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

She has a background in enforcement and has spearheaded significant actions against Wall Street banks and other financial institutions.

“She has proven herself to be a strong, independent, and fair regulator who is not afraid to do what’s right,” Mr. Brown said in a statement. “I call on the entire Banking and Housing Committee, Senate leadership, and the full Senate to move quickly to bring new leadership to the FDIC at this challenging time.”

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“I will review Christy Goldsmith Romero’s nomination to ensure she has the qualities necessary to support employees, lead the FDIC through the changes it desperately needs, and return credibility to the independent agency,” he stated.

“But let me be clear – Chairman Gruenberg should resign immediately. Every day he remains Chairman means the agency can’t move forward and heal or begin the process of restoring a respectable, dignified workplace culture at the FDIC.”

House Financial Services Committee Chair Patrick McHenry (R-N.C.) urged Ms. Romero, if confirmed, to “immediately begin taking steps to reverse the toxic culture overseen by Gruenberg to rebuild trust between FDIC employees and management.”

He urged the Senate to move ahead with the confirmation proceedings quickly to “curtail Chair Gruenberg’s ability to further damage the agency and endanger financial stability.”

The FDIC has become embroiled in a scandal that rocked the regulatory body.

After details were released to the public, Mr. Gruenberg apologized to staff and said he was “very sorry” for leading this climate.

As he didn’t leave his post immediately, the Democrats maintain a majority on the FDIC board.

A Partisan Grilling at Congressional Hearing

The House Financial Services Committee held a hearing that concentrated on the report’s findings and the FDIC’s future.

Mr. McHenry demanded Mr. Gruenberg resign immediately or be removed by President Biden, noting that “deep institution changes at the FDIC are needed now, not later.”

In addition to inappropriate behavior at the FDIC, Mr. McHenry outlined the agency’s record with Mr. Gruenberg at the helm, including the regional banking crisis last year that saw three major bank failures.

“So, I ask the White House and my Democratic colleagues: Does your agenda really outweigh the need for a competent leader at the helm of the FDIC?”

Rep. Andy Barr (R-Ky.) asserted that Democrats were more worried about threats to President Biden’s regulatory agenda than “about cleaning up the mess” the FDIC chief created.

“If he leaves the agency, we’ll have two Democrats and two Republicans,” he noted. “It’s supposed to be an independent regulatory agency.”

The hearing quickly delved into partisan politics, with Democrats accusing their colleagues on the other side of the aisle of hypocrisy.

According to Rep. Maxine Waters (D-Calif.), the committee’s ranking member, GOP lawmakers have refrained from demanding Vice Chair Travis Hill, a Republican, step down “despite him being a senior official under former Chair Jelena McWilliams when allegations of misconduct persisted.”

“I also wonder whether my colleagues will call for anyone who has been found liable for sexual abuse to stand down from holding other positions of power in government — like, for example, the former president [Donald Trump] and top Republicans,” Ms. Waters said.

Rep. Stephen Lynch (D-Mass.) argued that his Republican colleagues are not being genuine on the issue.

“There’s real reason to question the genuineness on my colleagues’ part,” Mr. Lynch said.

Additional Nominations

The White House also announced several other nominations to be sent to the Senate.

President Biden will nominate Kristin N. Johnson to serve as the Assistant Secretary for Financial Institutions at the Department of the Treasury. She currently serves as a CFTC commissioner.

The president will also nominate Caroline A. Crenshaw to be a commissioner at the Securities and Exchange Commission and Gordon I. Ito to be a member of the Financial Stability Oversight Council.