FDIC workplace probe finds bank regulator needs a ‘structural and cultural transformation’ to fix ‘sexualized, boys’ club environment’

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A probe into the Federal Deposit Insurance Corp.’s workplace found credible allegations of a toxic environment for bank examiners and that the agency’s culture needs an overhaul, according to four people with direct knowledge of the findings.

The report by law firm Cleary Gottlieb Steen & Hamilton says the FDIC needs a “structural and cultural transformation” to restore confidence in its examiner ranks and agency-wide, said three of the people, who asked not to be identified discussing an unpublished review. It stretches more than 200 pages and includes accounts of problematic behavior by FDIC employees.

The findings, which could be released as soon as Tuesday, also recommend changes to the agency’s performance review process, workplace conduct metrics, and that an internal monitor be installed to oversee the effort. A representative for the FDIC declined to comment. 

The investigation was prompted by a Wall Street Journal article in November that reported female bank examiners had left the FDIC because of its “sexualized, boys’ club environment.” FDIC Chairman Martin Gruenberg said at the time that he was “deeply troubled” by the report, and that the agency had no tolerance for the alleged misconduct in its workplace.

The review found the article’s description of the workplace culture to be credible, said the people. The findings also show employee satisfaction scores were dragged down by cultural issues in recent years, they added.

Investigation’s Scope

Meanwhile, the Journal article prompted calls from some prominent Republican lawmakers for Gruenberg, who was appointed by President Joe Biden, to resign. 

The investigation’s scope was not meant to recommend discipline or call for the removal of agency officials, the people said. Gruenberg was interviewed as part of the review. A spokesperson for him said he declined to comment for this article.

The review did not conclude that Gruenberg failed to act on the allegations reported by the Journal. However, it does cite examples of him losing his temper with staff in unrelated instances and questions whether he is the best person to lead the workplace culture changes at the agency, said the people.

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