Federal Deposit Insurance Corp. Chair Martin Gruenberg will not attend a House Financial Services Committee hearing Wednesday because of a scheduling conflict, an agency spokesperson told Politico and American Banker.
Fellow FDIC board members Jonathan McKernan and Michael Hsu, the acting comptroller of the currency, will still testify Wednesday, as will representatives of Cleary Gottlieb, the law firm that last month published its review of the agency’s workplace culture. Hsu and McKernan led the committee that oversaw that review.
Allegations that the FDIC tolerated an environment rife with sexual harassment, misconduct and discrimination have nagged the agency for years but intensified in November, after The Wall Street Journal published an expose with interviews from dozens of employees.
Cleary Gottlieb’s report surfaced roughly a week before Gruenberg testified to the committee during a hearing that was meant to be a semiannual report on the agency’s work.
Rep. Patrick McHenry, R-NC, the committee’s chair, said last month his fellow lawmakers “described having to choose” between discussing the findings of the report and the original purpose of the hearing. So McHenry set up follow-up hearings for Wednesday.
The FDIC has been in close communication with the committee since the hearing was announced, and tried to find another date when Gruenberg would have been available to testify, an agency official said, according to American Banker.
Gruenberg announced last month that he would resign once a successor is confirmed, a maneuver that would preserve a Democratic majority at the FDIC. (Without Gruenberg, the agency’s board would be deadlocked 2-2 between Democrats and Republicans, and Vice Chair Travis Hill, a Republican, would lead it in the interim.)
Separately Monday, The Wall Street Journal and The New York Times each reported the Biden administration was close to nominating Christy Goldsmith Romero, a Commodity Futures Trading Commission commissioner, to lead the FDIC.
That marks a reversal from early reporting that indicated Kristin Johnson, another commissioner at the CFTC, was the front-runner for the position.
The rumor also runs counter to analysis quoted by American Banker on Monday.
“The likeliest scenario in our view is that the process to name and confirm a new nominee is strategically slow-walked to ensure that Gruenberg is in the seat and able to cast a vote advancing Democratic bank policies,” Isaac Boltansky, an analyst with BTIG, wrote in a research note seen by the publication. “It is difficult to envision either the White House moving quickly to submit a nominee or the Senate acting with haste on that nomination.”
If Democrats were to lose the November presidential election, FDIC leadership would be in line for a shake-up anyway. Ahead of that, regulators are racing to revise tightened capital requirements for banks — a measure that would require buy-in from the FDIC but likely wouldn’t get it without a Democratic majority.
