• FDIC chairman Martin Gruenberg said he will resign after report on poor workplace culture.
  • An investigation found the FDIC's culture misogynistic and insular. Wrongdoers were not punished.
  • President Joe Biden will nominate a new FDIC chair, who the Senate would then vote on.

The chairman of a key US bank regulator said he will resign after an independent investigation found widespread sexual harassment and other issues at the agency, and politicians from both sides criticized his leadership.

The independent report from earlier this month found the Federal Deposit Insurance Corporation has a "patriarchal," "misogynistic," and "insular" work culture. The report also probed FDIC chairman Martin Gruenberg's strong temper.

The 71-year-old Democratic chairman has spent nearly a decade in the role under multiple presidential administrations.

In an email to staff Monday cited by The Wall Street Journal, Gruenberg said he would resign once a successor has been found. Staying in office would prevent FDIC vice chairman Travis Hill, a Republican, from becoming the agency's acting chairman.

"In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed," according to the email viewed by the Journal. He added he would continue to fulfill his responsibilities in the meantime, "including the transformation of the FDIC's workplace culture."

The White House said that President Joe Biden would soon nominate a new FDIC chairman and that it expects the Senate to move quickly to confirm the nominee.

At a hearing earlier this month, House of Representative members questioned the FDIC's ability to perform its job as a bank regulator and stop bank failures if Gruenberg yells at employees who bring him bad news.

"I accept the findings of the reports and as chairman, I take full responsibility to anyone who has experienced sexual harassment, discrimination or other misconduct at the FDIC," Gruenberg said at the hearing.

Lawmakers from both parties asked for him to step down during the hearing.

The 234-page summary of the months-long investigation, led by external law firm Cleary Gottlieb Steen & Hamilton, highlighted long-standing and recent issues at the agency. The report said that the FDIC has dismissed myriad harassment complaints and that wrongdoers are moved around internally or promoted.

Investigators said they set up a hotline in mid-January and received more than 500 complaints — largely from current employees — about sexual harassment, discrimination, and other issues. The FDIC has about 6,000 employees.

The report characterized the FDIC's culture as "a 'good ol' boys' club where favoritism is common, wagons are circled around managers, and senior executives with well-known reputations for pursuing romantic relations with subordinates enjoy long careers without any apparent consequence."

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