Gruenberg Stands His Ground

Faring somewhat better than he did yesterday (see Client Report REFORM232), FDIC Chair Gruenberg weathered repeated calls from Democrats to reform the agency’s culture without being subjected to direct demands that he resign.  That said, Ranking Member Scott (R-SC) called for a separate hearing on the Cleary report; he will not get one in the Senate, but this request suggests the one HFSC Chair McHenry (R-NC) mentioned yesterday may well be in the works.  If it is, then this may prove challenging to Mr. Gruenberg, who otherwise seems unwilling to resign and is not yet facing dismissal from the White House.  Senate Banking Republicans were as scathing as their House counterparts, with Sen. Kennedy (R-LA) comparing Mr. Gruenberg’s efforts to fix the FDIC to “asking Alec Baldwin to conduct a course in gun safety.” Sen. Warnock (D-GA) asked for and received a commitment for a ninety-day progress report on FDIC reform.  Acting Comptroller Hsu also took tough questioning today from Republicans such as Sen. Britt (R-AL), although he does not face demands for resignation.  Chair Brown (D-OH) also pressed Vice Chair Barr to join the FDIC and FRB in issuing a formal merger policy, but Mr. Barr again demurred, saying that the FRB is working with the OCC, FDIC, and DOJ on an inter-agency effort Mr. Hsu also acknowledged under questioning.   Mr. Barr also acknowledged the need to issue an incentive-compensation rule but declined to say if the FRB might join the FDIC and OCC (see FSM Report COMPENSATION38) if changes are made.

REFORM233.pdf