McHenry to Gruenberg: Showing Up Today is Not an Act of Courage, It’s an Act of Hubris
Chairman McHenry takes disgraced FDIC Chair to task at hearing to conduct oversight of the prudential regulators
Washington,
May 15, 2024 -
Today, the House Financial Services Committee, led by Chairman Patrick McHenry (NC-10), is holding a hearing to conduct oversight of Biden’s prudential banking regulators. Republicans will hold Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg to account following the publication of Cleary Gottlieb’s independent report confirming allegations of rampant misconduct and a toxic workplace culture at the agency under his watch. Members will also closely scrutinize regulators’ Basel III Endgame proposal among other partisan regulatory initiatives.
Watch Chairman McHenry’s opening remarks here.
Read Chairman McHenry’s opening remarks as prepared for delivery:
“We are here to conduct oversight of our prudential regulators.
“There’s plenty to discuss. Each of you has put forward proposals that require robust debate and explanation.
“But you’re up first, Mr. Gruenberg, and we all know why.
“You have failed your employees, your agency, and the American people.
“The fact that you have yet to resign proves you take no responsibility for your actions. And let me be clear, showing up today is not an act of courage, it’s an act of hubris.
“Last week, we were confronted with a report outlining appalling and abhorrent behavior at the Federal Deposit Insurance Corporation. This includes your verbally abusive behavior.
“This is beyond partisanship. It’s clear from this report that deep institutional changes at the FDIC are necessary. Mr. Gruenberg, you are not the right person to lead those changes.
“President Biden once said, ‘I’m not joking when I say this: If you’re ever working with me and I hear you treat another colleague with disrespect, talk down to someone, I promise you I will fire you on the spot.’
“So, I ask my Democratic colleagues, and the President, if the behavior outlined in this report doesn’t rise to that level, what does?
“Unfortunately, some of my colleagues on the other side of the aisle may attempt to defend the indefensible today by shifting blame to Republican FDIC Chairs. Let me remind you, Chair Gruenberg led the agency for 10 of the last 13 years.
“You may hear about employee favorability ratings, which come from an annual survey conducted of employees at federal agencies.
“There was a decline in satisfaction in the 2018 survey, which only included a couple months of former Chair McWilliams tenure. So that steep decline was dissatisfaction with Chair Gruenberg.
“Then in 2020—during the core of former Chair McWilliams’ leadership—FDIC employee satisfaction went up to its highest point since 2012, before Mr. Gruenberg’s first stint as Chair.
“When Chair Gruenberg returned to lead the agency again, employee satisfaction plummeted.
“I implore my Democratic colleagues to be consistent when judging the behavior of our regulators. This isn’t just mismanagement—it’s clear misconduct.
“It’s a shame we have to spend this much time talking about your conduct and failed leadership. There are very real issues facing our financial system that deserve this Committee’s full attention.
“The Biden administration’s banking regulators are busy pursuing partisan agendas rather than policies that support the economy, financial system, and American families.
“Most recently, partisan initiatives on executive compensation, the Bank Control Act, mergers, and climate have been put forward. This injects unnecessary divisiveness and threatens agency independence.
“Meanwhile, significant proposals following last year’s banking turmoil remain unresolved—most notably the unjustified and fatally-flawed Basel III Endgame proposal.
“Earlier this year, Chair Powell testified that the Basel III Endgame proposal would undergo significant changes. That’s promising. But I will emphasize again that a re-proposal is in order.
“The Administrative Procedure Act requires a substantially changed proposed rule to be reissued for public comment. This Committee expects you to comply with the law.
“I look forward to discussing these issues and more today. I yield back.”
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