U.S. Senator Katie Britt: ‘We Need a Wholesale Change Starting at the Top’ at FDIC

WASHINGTON, D.C., May 17, 2024 – U.S. Senator Katie Britt (R-Ala.) yesterday participated in a Banking, Housing, and Urban Affairs Committee oversight hearing of prudential regulators. The hearing featured testimony from Federal Reserve Vice Chair for Supervision Michael Barr, Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg, and Acting Comptroller of the Currency Michael Hsu.

This hearing comes after a recent independent investigatory report, released last week, detailed a toxic workplace culture at the FDIC. Senator Britt began her line of questioning by highlighting her disgust over these findings, noting the hundreds of allegations of discrimination, unsolicited sexual advances, assault, and even reports of women facing roadblocks to being promoted after having children. Senator Britt then emphasized that the FDIC was established to maintain public confidence in the nation’s financial system.

As the Acting Comptroller of the Currency, Mr. Hsu holds an ex officio seat on the FDIC board of directors. When asked by Senator Britt three separate times whether he believed an agency described by the report as “misogynistic,” “abusive,” and “toxic” instills “trust and confidence in the American people,” Mr. Hsu would not answer with a simple “yes” or “no.” Similarly, Vice Chair Barr would not answer the same question with a simple “yes” or “no” when asked twice by Senator Britt.

As Senator Britt noted in her remarks, Chair Gruenberg has held a significant leadership position at the FDIC – either on the board of directors, as Vice Chair, as acting Chair, or as Chair – for nearly 19 years, and he has clearly failed to ensure an appropriate work environment or healthy culture during his lengthy tenure.

Senator Britt concluded her remarks by calling for “wholesale change” at the FDIC.

“You said this is about people, this is about employees. In order to restore confidence, literally it starts at the top,” Senator Britt told Chair Gruenberg. “We need a change. The American people deserve a change. The FDIC was actually created to give them confidence in the financial system, and we need a wholesale change starting at the top.”

A transcript follows:

BRITT: Thank you, Mr. Chairman.

Let’s get right to it. As a woman, the findings of the FDIC report are particularly disturbing. Hundreds of instances of gender discrimination, unsolicited sexual advances, harassment, and assault, and even difficulty being promoted after having children. Let me repeat that individuals within a United States agency denied opportunities for women, because they chose to have a family.

One employee recounted being told by her supervisor, ‘You’re a mother now, you don’t belong in the workplace.’ That is completely and totally unacceptable. In the 234-page report, I do want to point out a few things.

In 2013, OPM (Office of Personnel Management) analysis said, quote, ‘the culture at the FDIC permits discrimination, and in-group favoritism in relation to promotions… and job assignments.’

Mr. Gruenberg, who was the Chair of the FDIC in 2013?

GRUENBERG:  I was, Senator.

BRITT:  Yes, sir.

In 2015, a female employee was sent an explicit photo by her supervisor. She didn’t report it after being warned quote, ‘you don’t report, you don’t say anything, because you end up getting fired,’ end quote.

Mr. Gruenberg, who was the Chair of the FDIC in 2015?

GRUENBERG:  I was, Senator.

BRITT:  In 2017, a report of quote ‘a subtle and not-so-subtle bias against women [at] the FDIC… (and) particularly (against) women who speak out or dare to ask a question.’

This woman is going to dare to ask a question. Mr. Gruenberg, who was the Chair of the FDIC in 2017?

GRUENBERG:  I was, Senator.

BRITT:  I could go on, but you get the point. The FDIC was created to promote confidence in the American financial sector.

Mr. Hsu, do you believe that an agency described as ‘misogynistic,’ ‘abusive,’ ‘toxic,’ instills trust and confidence in the American people?

HSU: All the recommendations…

BRITT: Yes, or no? If it is described as that, and you have said that you feel like this was an unbiased, non-political report, I have read your words. So, my question to you is, do you believe that an agency described as ‘misogynistic,’ ‘abusive,’ or ‘toxic,’ instills trust or confidence in the American people?

HSU: I believe the issues highlighted need to be solved immediately.

BRITT: No. The question is, do you think that instills confidence? If that’s the way something described, the answer’s ‘no.’ Can you not say ‘no?’ Can you say ‘no?’ Can you do that?

HSU: We need to protect the people at the FDIC…

BRITT: No, no, I heard you earlier. This is actually really disturbing. I didn’t expect to have to go back and forth with you on this. It is an easy answer.

If an agency is described as those things, the answer is, it does not instill trust in the American people. It does not create a culture where women feel like they want to work there, can work there, can succeed, which means there is a competency issue at the FDIC.

That means when you just heard Senator Warnock talking about the ‘Brain Drain,’ the ‘Brain Drain’ is because of the culture. What woman would want to go work under these circumstances? The answer is zero.

If we want to create a place where women can thrive, where women in the workforce feel like they can balance having a family and contributing to the greater good. It is an honor to work at any of the places that you all work. And the answer to the question is ‘no.’

So, let’s try this again. Vice Chair Barr, do you believe that an agency described as ‘misogynistic,’ ‘abusive,’ ‘toxic,’ instills trust or confidence in the American public?

BARR: I think the problems in that report are deeply troubling and unacceptable.

BRITT: So, ‘no.’ Do you agree? ‘No.’

BARR: I agree that the agency has deep problems that they need to resolve.

BRITT: Guys, this is really frustrating. Chair Gruenberg, you have been either the Chair, the acting Chair, or Vice Chair, about 15 of the last 18 years, or 18 years maybe? I guess those three [positions], and then the three years … you were a member of the Board.

 GRUENBERG:  Yes, Senator.

BRITT:  As FDIC Chairman, your responsibility is the day-to-day management of this organization. As the Vice Chair, it’s to advise the Chairman. As (a member of) the Board, it’s to ensure the day-to-day operations of qualified management.

It is clear that we need wholesale change, and I hope that these people will stop putting your career above the very people that you all serve. You said this is about people, this is about employees. In order to restore confidence, literally it starts at the top.

We need a change. The American people deserve a change. The FDIC was actually created to give them confidence in the financial system, and we need a wholesale change starting at the top.

A video of Senator Britt’s line of questioning can be viewed here.

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High quality video of Senator Britt’s line of questioning can be downloaded for media usage here.