McHenry demands Gruenberg testify on FDIC toxic culture

Bloomberg News

WASHINGTON — Rep. Patrick McHenry, R-N.C., chairman of the House Financial Services Committee, has set a date for a hearing that specifically examines the Federal Deposit Insurance Corp.'s workplace culture on June 12. 

FDIC Chairman Martin Gruenberg has already testified in front of the House Financial Services Committee as part of a previously scheduled oversight of the prudential banking regulators. It was his first time taking questions since the release of a report from the law firm Cleary Gottlieb that outlined a pervasively toxic culture at the agency. 

Although that report didn't find that Gruenberg was a main instigator of the worst problems in the report, it did raise questions about his temperament and his ability to lead the agency through its next phase. 

McHenry, in the letter, demanded that Gruenberg testify at the second of two panels on June 12, to understand how Gruenberg "will address the FDIC's workplace culture as chairman."

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Gruenberg said he would resign from the agency, at which he has served for roughly two decades, including nearly a decade as chairman, once the Biden administration has a new chairman confirmed by the Senate. Given the limited number of legislative days left before the 2024 elections in November, Gruenberg could continue to lead the agency for months to come. 

"Your appearance is critical so that Congress can ensure its banking agencies are acting to maintain stability and public confidence in the nation's financial system," McHenry said. 

McHenry told acting Comptroller of the Currency Michael Hsu, who previously defended Gruenberg's ability to continue atop the FDIC, and FDIC board member Jonathan McKernan that they would testify at the first panel earlier in the day. McKernan and Hsu are co-chairs of the special review committee that's overseeing the reforms recommended by the Cleary Gottlieb report. 

A representative from Cleary Gottlieb will also be on that first panel, McHenry said in the letters to Gruenberg, McKernan and Hsu.