Federal Deposit Insurance Corp. Chair Martin Gruenberg pledged Monday to resign once a successor is confirmed “in light of recent events,” according to a statement posted on the regulator’s website.

“Until that time, I will continue to fulfill my responsibilities as Chairman of the FDIC, including the transformation of the FDIC’s workplace culture,” Gruenberg said in Monday’s statement.

That culture has been under fire since November, when a Wall Street Journal article detailed a work environment at the agency that tolerated sexual harassment and discrimination. A review of the FDIC by the law firm Cleary Gottlieb, released this month, revealed a “misogynistic,” “insular” culture where employees held a “widespread fear of retaliation.”

Gruenberg’s offer to step down pending approval of a successor ensures a Democrat remains atop the agency for the time being. If Gruenberg were to resign immediately or with a concrete time frame, the FDIC’s board would be deadlocked 2-2 between Republicans and Democrats, and power would pass to the agency’s vice chair, Republican Travis Hill.

House Financial Services Committee Chair Patrick McHenry, R-NC, accused Gruenberg on Monday of playing politics.

“While [Gruenberg’s] intent to resign will be welcome news to the FDIC employees who have been subjected to an appalling culture of misconduct and abuse — this announcement is too little, too late,” McHenry said in a statement. “There is a clear succession plan in place and the agency’s operations would continue unabated if he rightly stepped down today.”

Likewise, Sen. Tim Scott, R-SC, scolded Democrats for accepting an open timeline for Gruenberg’s departure.

“If President [Joe] Biden and Democrats were really serious about supporting employees and fixing the FDIC’s toxic work culture, they’d ask Chairman Gruenberg to step down immediately,” said Scott, the ranking member of the Senate Banking Committee. “This draw-it-out strategy makes it clear that this administration is prioritizing their political agenda over protecting workers.”

It was Scott’s Democratic counterpart whose change in tone on Gruenberg appeared to accelerate the resignation offer.

“After chairing last week’s hearing, reviewing the independent report, and receiving further outreach from FDIC employees ..., I am left with one conclusion: there must be fundamental changes at the FDIC,” Senate Banking Committee Chair Sherrod Brown, D-OH, said Monday, hours before Gruenberg offered to step down. “Those changes begin with new leadership, who must fix the agency’s toxic culture and put the women and men who work there — and their mission — first.”

Brown on Monday urged Biden to “immediately” nominate a new chair “and for the Senate to act on that nomination without delay.” 

Sam Michel, the White House’s deputy press secretary, said Monday that Biden would nominate a new FDIC chair "soon." 

"The President, of course, expects the Administration to reflect the values of decency and integrity and to protect the rights and dignity of all employees," Michel said in a statement seen by NPR.

Regulatory agenda at risk

Apart from politics as usual, one potential reason for Gruenberg’s open timeline is concern that some of the FDIC’s work, such as its role on the joint proposal to increase capital requirements for the U.S.’s largest banks, would suffer without continuity. Regulators, led by the Federal Reserve, are working to get a revised version of the contentious measure enacted ahead of the November election.

Before Monday, Democrats, including Brown, had largely stopped short of asking Gruenberg to resign.

“The FDIC needs to be fixed. The women and men who work there deserve better,” Brown said May 7, the day the Cleary Gottlieb report was published. “Chair Gruenberg must accept responsibility and must immediately work to make fundamental changes to the agency and its culture.”

Even at a hearing last week, one Democrat addressed the Cleary Gottlieb report as though Gruenberg would remain in charge. “Sounds like you need to fire more people,” said Rep. Stephen Lynch, D-MA.

After Brown issued his statement asking the FDIC chair to resign, Gruenberg’s predecessor at the agency, Sheila Bair, posted a similar plea on X, formerly Twitter.

“I have known and worked with Chairman Gruenberg for years. But there is a desperate need for change at the FDIC. This controversy is hurting him and his agency,” Bair wrote Monday. “For his own sake and everyone at the FDIC, he should announce his intention to resign effective with the appointment and confirmation of a new Chair.”

Amplifying outcry

Calls for Gruenberg to resign had steadily increased from Republican lawmakers for months. The saber-rattling grew in earnest when McHenry asked Gruenberg during a November hearing whether he had been investigated for misconduct. Gruenberg said he had not but later acknowledged he was investigated in 2008 but that the complaint was dropped.

That, alongside the damning allegations surrounding the FDIC’s culture, led senators including Thom Tillis, R-NC, and Joni Ernst, R-IA, to speak out.

“Desperately needed changes at the FDIC are not possible if the agency is still being led by an individual who himself was investigated for alleged mistreatment,” Tillis posted on X at the time. “Marty Gruenberg should resign.”

“Not only did he fail his employees, he lied to Congress,” Ernst wrote on X. “Accountability is coming.”

Ernst ratcheted up her frustration after Gruenberg apologized to FDIC employees during an all-hands meeting.

“The civil servants these monsters abused are owed more than just an apology, they deserve justice,” Ernst said. “There needs to be real ramifications. This includes your resignation.”

The resignation calls renewed once Cleary Gottlieb issued its review, and by then, at least one Democrat was asking Gruenberg to step down.

“I am appalled and deeply disturbed by the details of widespread sexual harassment and discrimination at the FDIC outlined in the report ..., and I commend the brave individuals who came forward to shed light on these abuses,” said Rep. Bill Foster, D-IL. “Sweeping changes must be made to mend the toxic work environment that has run rampant for far too long, and that starts with a change of leadership. It is time for Chair Gruenberg to resign.”

Gruenberg has served on the board of the FDIC since 2005, leading the agency twice — from 2011 to 2018 (with the first 16 months of that as acting chief) and again from 2022 onward.