House Republicans on Friday said they were beginning an investigation into FDIC Chair Martin Gruenberg and allegations of workplace misconduct at the agency, ramping up political pressure on the top bank regulator.
GOP lawmakers led by House Financial Services Chair Patrick McHenry (R-N.C.) told Gruenberg in a letter they will use the panel's "full arsenal" of oversight and investigative tools, including compulsory measures, "to ensure that our banking system remains safe and sound.”
"Chairman Gruenberg, the viability of your leadership is in question," they said.
The announcement followed Wall Street Journal reports that described a long-running toxic work environment at the FDIC and said Gruenberg and other agency leaders did little to address the behavior.
The House Republicans launching the investigation, including Reps. Bill Huizenga of Michigan and Andy Barr of Kentucky, told Gruenberg they were concerned that the FDIC under his leadership lacks the ability to address the problems revealed in the stories.
“Our concern is underscored by your nearly 20-year tenure in all aspects of leadership and management at the FDIC, including serving twice as chairman,” they said. “It has failed to instill the confidence the public needs to know their banking system is and will be safe and secure in the future.”
House Republicans have fiercely opposed much of Gruenberg’s agenda at the agency, including a key proposal intended to shore up the banking sector that could be jeopardized by the scandal. McHenry opposed his nomination to lead the agency last year.
An FDIC spokesperson said the agency will “be fully transparent and cooperative with the committee.” The FDIC has hired the law firm BakerHostetler to conduct an independent review of the matter.
In a letter on Friday afternoon, Democrats on the Senate Banking Committee called for the FDIC’s acting inspector general to conduct a “comprehensive investigation into the workplace culture” at the agency.
The lawmakers, led by Senate Banking Chair Sherrod Brown of Ohio, wrote that the inquiry should consider the allegations outlined in the Journal, including “a review of the 2008 management inquiry into then-Board Member Martin Gruenberg,” which was first reported by the paper.
The FDIC inspector general's office said it is reviewing the lawmakers' request.
The top GOP member of the Senate Banking Committee, Tim Scott, said in a statement Thursday that the “allegations deserve a thorough and independent review followed by forceful action.” He added that Gruenberg “should seriously consider if he possesses the leadership the FDIC requires at this moment.”