- The Federal Deposit Insurance Corporation (FDIC) has a “patriarchal” culture, according to an independent report.
- Banking regulators took no action on dozens of harassment complaints and moved the wrongdoers from place to place.
- Investigators questioned the FDIC chairman’s ability to lead cultural change.
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The main U.S. banking regulator has a “patriarchal” and “closed” culture and is led by a chairman known for his hot temper, one source said. independent report It was released on Tuesday.
The 234-page summary of a months-long investigation led by outside law firm Cleary Gottlieb Steen & Hamilton highlighted longstanding and recent problems at the Federal Deposit Insurance Corporation (FDIC). The report said the FDIC has dismissed countless harassment claims and that wrongdoers have been moved or promoted within the company.
The law firm’s report is Story of abominable November The Wall Street Journal article about the FDIC’s toxic work culture comes as the agency faces an investigation from the House of Representatives.
Investigators say the company set up a hotline in mid-January and has received more than 500 complaints, mostly from current employees, about issues such as sexual harassment and discrimination. FDIC has approximately 6,000 employees.
Tuesday’s report called the FDIC’s culture “‘misogynistic,’ ‘patriarchal,’ ‘closed,’ and ‘old-fashioned,’ where favoritism is common, wagons circle managers, and senior leaders… “It’s a ‘good old-fashioned’ boys’ club where executives surround themselves with talented people.” Known for pursuing romantic relationships with subordinates, he has enjoyed a long career without apparent consequences. ”
The FDIC has anti-harassment programs in place, but they are ineffective, the report says. Of the 92 complaints received by the FDIC from 2015 to 2023, none resulted in disciplinary action more serious than suspension, only two warranted suspension, and 78 resulted in disciplinary action. It didn’t work out. Investigators said many employees did not report problems for fear of retaliation.
Investigators spoke with one employee. The employee said he was “very concerned for his safety” because his co-worker who was stalking him continued to send sexually explicit messages even after he filed a complaint. Told. Employees from underrepresented groups said they were told they were “just a token” employee meant to meet quotas.
Tuesday’s investigation builds on a 2020 report from the FDIC inspector general that found the regulator did not have an “adequate” sexual harassment reporting and prevention program. Previous reports also noted widespread fear of retaliation.
The independent panel devoted nine pages to discussing the conduct of FDIC Chairman Martin Gruenberg. Investigators wrote that they heard “credible reports” about Gruenberg’s temperament, including at a May 2023 meeting.
The report states, “As the FDIC faces a workplace culture-related crisis, Chairman Gruenberg’s reputation has been challenged by the credibility of the leadership’s response to the crisis and the ‘moral authority’ to lead cultural change.” “It raises questions about this,” he said.
In a statement to employees released Tuesday, Gruenberg said he is responsible for the agency, including its culture. The 71-year-old Democrat has held the role for nearly a decade under multiple presidential administrations.
“I would also like to apologize for my inadequacies.”
After the report was released, some members of both parties called for Gruenberg to step down. His resignation will leave Republican Party Vice Chairman Travis Hill to take the interim seat.
On Tuesday, White House press secretary Karine Jean-Pierre would not say whether the president still had confidence in Gruenberg.
He said Gruenberg “has decided to apologize and follow the recommendations of his law firm.”
The FDIC did not immediately respond to Business Insider’s request for comment. Sent outside standard hours. The agency has not released a statement beyond Gruenberg’s Tuesday message to employees.