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Martin Gruenberg

Democrats push for quick Martin Gruenberg replacement

Senate Democrats are hoping for fast action to replace Martin Gruenberg now that the Federal Deposit Insurance Corp.’s chair said he’ll step down when the Senate confirms a successor.

For Democrats, it would be a welcome end to the political uproar following the release of an independent report detailing the FDIC’s toxic workplace culture and systemic failures to stop sexual harassment.

But with the election just months away, it won’t be easy for a nominee to win Senate confirmation.

“The White House needs to nominate somebody who’ll move quickly,” Senate Banking Committee Chair Sherrod Brown (D-Ohio) told us. “Leadership of the FDIC is really important for a whole host of reasons.”

Brown, who called for new FDIC leadership just before Gruenberg announced his plans to step aside, said he has discussed names for a potential replacement with the White House. With Gruenberg in hot water for weeks over the report, bank lobbyists and other insiders have been eyeing some potential options whom the White House could tap.

“I think the Biden administration will recognize that it’s important to move very quickly, and we here in the Senate need to act very quickly on the confirmation,” Sen. Chris Van Hollen (D-Md.) said.

The challenge: It’s entirely possible that the Senate won’t be able to confirm Gruenberg’s replacement this year, especially this close to an election. It will be difficult enough to get 50 Democrats on board. And we don’t expect Republicans to play ball with the possibility of a new Trump administration looming in January. That means an FDIC nominee could burn through a lot of Senate floor time that Majority Leader Chuck Schumer would rather use for something else.

But Democrats aren’t too worried that Gruenberg’s announcement represents a setback for their party’s banking regulatory policies. Democrats pointed to the fact that Gruenberg will remain in the job until there’s a successor in place.

“It’s now up to the president to nominate someone who… changes the culture of the agency, not the policies,” said Sen. Jack Reed (D-R.I.), a senior member of the Banking Committee.

“Because I think Marty has done a good job in trying to make the banks more responsive,” Reed added. “At this point, his willingness to depart is an opportunity for not only continued policy, but addressing the cultural issues of the agency.”

While that’s good news for Biden’s banking agenda, it also leaves Democrats open to continued criticism on how they’re handling the scathing report about the agency’s workplace culture.

“Why wait?” Sen. Thom Tillis (R-N.C.) said of replacing Gruenberg. Tillis added that Gruenberg “needs to get out of an environment he made toxic.”

— Laura Weiss and Andrew Desiderio

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