McHenry bashes FDIC chief for ‘hubris’ in attending hearing despite calls to resign

Embattled Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg took the hot seat in front of the House Financial Services Committee on Wednesday morning following a scathing report on widespread sexual harassment and discrimination at his agency.

“Showing up today is not an act of courage. It’s an act of hubris,” Rep. Patrick McHenry (R-N.C.), chair of the Financial Services panel, told Gruenberg. McHenry and numerous other Republicans have called for Gruenberg to resign.

Gruenberg has faced pressure for months after The Wall Street Journal released a bombshell report last year documenting a culture of sexual harassment, misconduct and retaliation at the top bank regulator. A report issued last week by law firm Cleary Gottlieb Steen & Hamilton confirmed the Journal’s findings and highlighted stunning instances of inappropriate behavior.

Democrats have been split on whether Gruenberg should step down. Ranking member Maxine Waters (D-Calif.) accused Cleary Gottlieb of political bias, focusing on Gruenberg and not on Republican leaders of the agency.

“The report seemed to downplay workplace concerns and complaints of harassment that occurred under prior Republican agency leadership,” Waters said.

However, an increasing number of Democrats during Wednesday’s hearing signaled that it was time for Gruenberg to move on.

“You’re on a short leash. A lot of people here would like to see you gone, to be honest with you. I’m not so sure you’re the guy to make the changes, but maybe you are. Maybe you can prove that to us. I don’t know, I don’t know,” Rep. Stephen Lynch (D-Mass.) told Gruenberg.

Rep. Jim Himes (D-Conn.) said he had trouble envisioning Gruenberg as the right person to clean up the FDIC and its culture of retaliatory intimidation.

“I’m stumbling over this ‘I’m the right guy to fix this’ thing,” he said.

Rep. Greg Meeks (D-N.Y.) said he couldn’t describe himself as anything other than “pissed off” by the report.

“If I’m going to be honest, I’m pissed off. I heard people talk about [being] upset, appalled, but I’m pissed off — that’s my language, where I come from,” he said.

The scolding came as Gruenberg appeared for a hearing beside other top bank regulators as they mull a set of new rules.

A set of major banking reforms, known as the Basel III endgame, is now being implemented by financial regulators at the FDIC, Federal Reserve and Office of the Comptroller of the Currency, though the Fed and some lawmakers have called for an alternative proposal of the international banking plan that would require an increase of capital requirements.

“On the issue of Basel III, I want to make my ongoing position clear that the fundamentally flawed proposal must be scrapped and at most there should be a reproposal, if justifiable,” said Rep. Andy Barr (R-Ky.), chair of the financial institutions subcommittee.

Updated at 11:14 p.m. EDT.

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