SENATE BANKING DEMOCRATS CALL FOR INDEPENDENT PROBE OF FDIC

SENATE BANKING DEMOCRATS CALL FOR INDEPENDENT PROBE OF FDIC

— Win Smart, CFA (@WinfieldSmart) November 17, 2023

Brown Leads Committee Democrats in Calling for An Independent Investigation of FDIC Culture

WASHINGTON, D.C. – Today, U.S. Senator Sherrod Brown (D-OH), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, led 11 members of the Senate Banking and Housing Committee in calling for an independent investigation into the Federal Deposit Insurance Corporation (FDIC) after reports that the agency has failed to fix a toxic culture of sexual harassment and misconduct, discrimination, and misogyny. In a letter to FDIC Acting Inspector General Tyler Smith, the senators expressed outrage over these allegations and requested a thorough investigation to make sure the agency addresses these issues and to restore public trust.

“The FDIC is charged with protecting the stability and public confidence of our banking system. The FDIC’s employees play a critical role in ensuring our financial system operates in a safe and sound manner. It is imperative that the FDIC recruit and retain talented public servants and create a safe and professional work environment. Allowing employees that have engaged in misconduct to stay on the job, while losing talented employees because of the failure to meaningfully address these systemic issues, compromises public trust in the FDIC. The issues raised in these reports require immediate attention,”the Senators urged.

They added, “Your office’s investigation into this matter is vital to fully understanding the longstanding failings at the FDIC and will be important in helping the FDIC make the necessary changes to the culture of this agency.”

In addition to Senator Brown, the letter was signed by Senators Jack Reed (D-RI), Bob Menendez (D-NJ), Jon Tester (D-MT), Mark Warner (D-VA), Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), Catherine Cortez Masto (D-NV), Tina Smith (D-MN), Raphael Warnock (D-GA), John Fetterman (D-PA), and Laphonza Butler (D-CA).

A copy of the letter can be found HERE or below.

Dear Acting Inspector General Smith:

We request that your office conduct a comprehensive investigation into the workplace culture at the Federal Deposit Insurance Corporation (FDIC). We are extremely concerned by recent reports that the FDIC has failed to fix a toxic culture of sexual harassment and misconduct, discrimination, and misogyny spanning well over a decade. The allegations described in news reports are nothing short of appalling.

According to The Wall Street Journal, female examiners at the FDIC have been subjected to inappropriate behavior by male examiners, including supervisors.^[1] Fearing retaliation or lacking trust in the administration of the FDIC’s sexual harassment policies, some female employees have either chosen to leave the agency or not report incidents of harassment. Additionally, stretching back as far as 15 years, reports allege leadership at the FDIC have created a hostile and combative work environment for employees.^[2]

Your office previously documented weaknesses in the FDIC’s sexual harassment policies and procedures. In July 2020, your office issued a report that found that the “FDIC had not established an adequate sexual harassment prevention program and should improve its policies, procedures, and training to facilitate the reporting of sexual harassment allegations and address reported allegations in a prompt and effective manner.”^[3] It appears these issues continue to persist and the FDIC has failed to make the necessary and meaningful changes.

The FDIC is charged with protecting the stability and public confidence of our banking system. The FDIC’s employees play a critical role in ensuring our financial system operates in a safe and sound manner. It is imperative that the FDIC recruit and retain talented public servants and create a safe and professional work environment. Allowing employees that have engaged in misconduct to stay on the job, while losing talented employees because of the failure to meaningfully address these systemic issues, compromises public trust in the FDIC.

The issues raised in these reports require your office’s immediate attention. As part of your investigation, we request that your office consider the reports of sexual harassment and misconduct; the process that led to a lack of meaningful disciplinary action against individuals who engaged in misconduct; whether the agency implemented meaningful changes after issuance of the 2020 Inspector General’s report; a review of the 2008 management inquiry into then-Board Member Martin Gruenberg; and other matters identified in the Journal’s reporting.

Your office’s investigation into this matter is vital to fully understanding the longstanding failings at the FDIC and will be important in helping the FDIC make the necessary changes to the culture of this agency.

Sincerely,