President Biden announced his nomination of Christy Goldsmith Romero to lead the FDIC following a workplace controversy. Biden has selected Romero to replace Martin Gruenberg as FDIC Chair amid allegations of a toxic work environment.
According to The Hill, Romero, a current member of the Commodity Futures Trading Commission (CFTC), has been nominated to helm the Federal Deposit Insurance Corporation (FDIC). Her nomination comes after Gruenberg announced his resignation following a report detailing widespread sexual harassment and discrimination at the FDIC.
Before joining the CFTC in 2022, Romero had an extensive career at the Treasury Department. She notably served as the special inspector general for the Troubled Asset Relief Program (TARP), where she oversaw the prosecution of numerous financial crimes.
During her tenure overseeing TARP, Romero was responsible for 406 criminal charges against individuals in the financial industry. This included 55 bankers, one trader, 68 bank borrowers, and 83 scammers preying on homeowners.
Romero’s background in financial oversight and her experience with TARP are expected to be crucial as she steps into her new role at the FDIC. Her nomination is seen as a swift response to the ongoing issues at the agency.
Gruenberg’s resignation was prompted by a report from Cleary Gottlieb Steen & Hamilton, which highlighted a toxic culture within the FDIC. The report described a “patriarchal, insular, and risk-averse culture” that allowed for sexual harassment and discrimination to persist.
The report followed an investigation by The Wall Street Journal, which detailed similar misconduct and described the FDIC as having a “sexualized, boys’ club environment.” Republicans had been calling for Gruenberg’s resignation since last year. Senate Banking Committee ranking member Tim Scott and other Republicans cited troubling allegations of racial discrimination and retaliation at the FDIC under Gruenberg’s leadership.
In addition to Romero, President Biden announced other significant nominations. CFTC Commissioner Kristin N. Johnson has been nominated to be assistant Treasury secretary for financial institutions. Hawaii Insurance Commissioner Gordon I. Ito has been selected to join the Financial Stability Oversight Council.
Biden also plans to renominate SEC Commissioner Caroline Crenshaw. These nominations come as the Federal Reserve works to implement the Basel III endgame, a series of reforms that will require banks to maintain higher capital reserves. The Basel III reforms are a response to the 2007-08 financial crisis. However, they face opposition from Republicans, who have called for a complete overhaul of the regulations.
While Republicans have been vocal about their dissatisfaction with Gruenberg, some Democrats have also called for his resignation. Rep. Bill Foster was among the first Democrats to call for Gruenberg to step down, citing the need for “sweeping changes” at the FDIC.
However, other Democrats have defended Gruenberg, arguing that the issues at the FDIC are systemic and not solely his responsibility. Rep. Maxine Waters criticized the Cleary Gottlieb report, suggesting it unfairly targeted Gruenberg. “Unfortunately, the Cleary report diverts attention from the longstanding institutional challenges confronting the FDIC,” Waters said in a statement in May.
The problems with sexual harassment at the FDIC predate Gruenberg’s tenure. In 2020, under Trump-appointed FDIC Chair Jelena McWilliams, the FDIC’s inspector general reported that the agency lacked clear definitions and procedures for handling sexual harassment cases. Romero’s nomination represents a significant step toward addressing these deeply rooted issues. Her extensive background in financial oversight and experience with TARP may provide the expertise needed to navigate the challenges facing the FDIC.
President Biden’s nomination of Christy Goldsmith Romero as FDIC Chair marks a significant move to address the workplace issues that have plagued the agency. With her background in financial oversight, Romero is poised to bring about much-needed reforms. The Senate will now need to confirm her nomination, a process that will be closely watched. In addition to Romero, Biden has nominated other key figures to important financial roles, underscoring his administration’s commitment to strengthening financial oversight. The path ahead for Romero and the FDIC will be challenging, but her appointment offers a fresh opportunity for change.
