FDIC leader announces he will resign after successor is confirmed amid report of 'toxic' environment

The chairman of the Federal Deposit Insurance Corp. (FDIC) Martin Gruenberg said on Monday that he would resign his post once a successor has been chosen to take his place.

The announcement comes months after House Republicans launched an investigation into allegations of sexual harassment and discrimination at the FDIC. There were also allegations of retaliation against people who spoke up at the agency under Gruenberg's leadership.

"Throughout [my] time I have faithfully carried out the critically important mission of the FDIC to maintain public confidence and stability in the banking system,” Gruenberg said in a statement. “In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed. Until that time, I will continue to fulfill my responsibilities as Chairman of the FDIC."

The White House said President Joe Biden will nominate a replacement to the position soon, who would then have to be confirmed by the United States Senate. 

“In his long tenure of service at the FDIC, Chairman Gruenberg has helped protect the economy from financial instability and worked to ensure the banking system serves more Americans fairly,” White House deputy press secretary Sam Michel said in a statement, per The Hill. “We thank him for both his commitment to swiftly implement recommendations made in a recent report and his willingness to stay at FDIC until his successor is confirmed."

A series of reports by the Wall Street Journal last year triggered the House investigation, and an outside investigation from the Cleary Gottlieb Steen & Hamilton law firm confirmed the allegations. Gruenberg had served on the FDIC board since 2005.

Senate Banking Chairman Sherrod Brown, a Democrat from Ohio, condemned the FDIC's "toxic culture" under Gruenberg and called for Biden to nominate a new replacement immediately. 

“After chairing last week’s hearing, reviewing the independent report, and receiving further outreach from FDIC employees to the Banking and Housing Committee, I am left with one conclusion: there must be fundamental changes at the FDIC,” Brown said in a statement. “I’m calling on the President to immediately nominate a new Chair who can lead the FDIC at this challenging time and for the Senate to act on that nomination without delay."