By Douglas Gillison
(Reuters) -The head of the U.S. Federal Deposit Insurance Corporation faced outraged criticism from lawmakers on Tuesday following a media report that cited pervasive allegations of sexual harassment at his agency.
FDIC Chairman Martin Gruenberg, who appeared at a Capitol Hill oversight hearing with other top financial regulators, told the Senate Banking Committee he was personally distraught after the Wall Street Journal's report on Monday and committed to providing a safe working environment for staff.
The subject threatened to overshadow testimony on proposed changes to bank capital regulations that have drawn fierce opposition from industry.
The FDIC's performance has come under harsh scrutiny following a costly series of large bank failures earlier this year, two of which occurred during the agency's supervision.
In a related development, Republican lawmakers on the House of Representatives Financial Services Committee, before which Gruenberg is due to testify on Wednesday, called for an urgent briefing on the matter from an FDIC watchdog agency.
Gruenberg said on Tuesday he found the matter was "deeply disturbing" and said the FDIC would employ all its resources to review internal practices "and how we can most effectively address it."
The article cited misconduct occurring between 2010 and 2022 in cities such as San Francisco, Dallas, Seattle and Denver, as well as interviews with "more than 20 women" who had quit.
Republican Senators John Kennedy and Cynthia Lummis both noted Gruenberg's nearly 20-year tenure on the FDIC board, chastising him for what they said was his failure to act on a long-standing problem spotlighted by the FDIC's inspector general.
Kennedy asked Gruenberg if he had personally ever engaged in sexual harassment, which the chairman denied. Kennedy and Lummis cited examples of "disgusting behavior," such as lewd remarks, wild partying, unsolicited nude photographs and pressure for sex with colleagues in return for professional advancement, prompting women to leave the agency.
"You and your colleagues ought to hide your heads in a bag," said Kennedy. "This is no country for creepy old men."
Gruenberg noted that he was not chairman at the time of the inspector general's report in 2020 and said the FDIC had addressed all of that report's recommendations. But he conceded this had likely not changed workplace culture.
"You've been there for 18 years at an agency that now has been exposed as having a hostile work environment towards women," said Lummis. "This is so far beyond the pale that I'm just gonna say you sure as heck better do something about it."
Gruenberg on Monday told FDIC staff that the agency would not tolerate sexual harassment and announced it had hired an outside law firm to review its internal practices.