Federal Deposit Insurance Corp. Chairman Martin Gruenberg will not be appearing at a House Financial Services Committee hearing on Wednesday due to a scheduling conflict, a spokesman for the group told Politico and American Banker.
FDIC Director Jonathan McKernan and Acting Comptroller of the Currency Michael Schuh are also scheduled to testify Wednesday, as are representatives from the law firm Cleary Gottlieb, which last month released an investigation into the FDIC’s workplace culture. Schuh and McKernan led the committee that oversaw that investigation.
Allegations that the FDIC tolerated an environment of sexual harassment, misconduct and discrimination have dogged the agency for years, but they intensified after The Wall Street Journal published an exposé last November that included interviews with dozens of employees.
Cleary Gottlieb’s report surfaced about a week before Grunberg was due to testify before the committee at a hearing for what was supposed to be a semi-annual report on the bureau’s activities.
The committee’s chairman, Republican Rep. Patrick McHenry of North Carolina, said last month that his colleagues “We have to debate either the findings of the report or the original purpose of the hearing,” he said.So McHenry set a follow-up hearing for Wednesday.
The FDIC has been in close contact with the committee since the hearing was announced and was trying to find another date for Grunberg to testify, officials said, according to American Banker.
Grunberg announced his resignation last month. Once the successor is determinedThe maneuver will ensure that Democrats maintain a majority on the FDIC. (Without Grunberg, the FDIC board will be deadlocked 2-2 between Democrats and Republicans, with Republican Vice Chairman Travis Hill leading the board in the interim.)
On Monday, The Wall Street Journal and The New York Times each reported that the Biden administration is on the verge of nominating Commodity Futures Trading Commission commissioner Christy Goldsmith Romero to head the FDIC.
This marks a reversal from earlier reports that suggested another CFTC commissioner, Christine Johnson, was the leading candidate for the post.
The rumors also contradict an analysis cited by American Banker on Monday.
“In our view, the most likely scenario is that the nomination and confirmation process for a new nominee will be strategically slowed down to allow Gruenberg to assume the chairmanship and cast the votes to advance Democratic banking policy,” BTIG analyst Isaac Boltanski wrote in a research note seen by the magazine. “It is unlikely that the White House will quickly submit a nominee or that the Senate will rush through the nomination.”
Ahead of what would likely be a new leadership team at the FDIC if Democrats lose the presidential election in November, regulators are rushing to overhaul banks’ strict capital requirements, a move that would require the FDIC’s consent, which is unlikely without a Democratic majority.
