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Biden nominates Christy Goldsmith Romero to lead FDIC at pivotal time for the banking regulator

By Elisabeth Buchwald, CNN

New York (CNN) — President Joe Biden has nominated Christy Goldsmith Romero as chair of the Federal Deposit Insurance Corporation.

The announcement comes after current FDIC Chair Martin Gruenberg said he intended to resign once a successor is confirmed by the Senate following a scathing independent investigation detailing pervasive sexual harassment, discrimination and bullying at the agency charged with regulating the banking sector.

Goldsmith Romero, a Democrat, served as special inspector general for the Troubled Asset Relief Program at the Treasury Department that was borne out of the Great Recession. In that role, she was responsible for overseeing efforts to crack down on banks’ misuse of funds they received from the program.

In a statement released Thursday, the White House said Goldsmith Romero “has more than 20 years of experience as a career federal attorney and leader in financial regulation, serving under four Presidents” and touted her experience promoting “financial stability and market resiliency, integrity, and vibrancy.”

An agency under scrutiny

She also has the advantage of having been unanimously confirmed by the Senate twice for previous positions, which may improve her odds of getting confirmed a third time. That contributed to why Biden chose to nominate her, a person familiar with the matter told CNN. Republican and Democratic senators were briefed on Biden’s intent to nominate her prior to Thursday’s announcement, they added.

As incoming head of the FDIC, she will largely be viewed as the figure responsible for fixing the longstanding problematic culture at the agency. Goldsmith Romero was picked instead of promoting someone internally at the FDIC because there was a general sense that it would take someone perceived as having a clean slate to usher in lasting change, the person said.

An independent investigation commissioned by the FDIC released in early May confirmed the Wall Street Journal’s reporting from last year. Among the findings were many women receiving sexually explicit messages as well as unwanted advances from male coworkers who were often in more senior roles. Minorities and women reported being passed over for promotions. A Hispanic employee said they were “asked by a colleague to recite the Pledge of Allegiance to prove that they were American.”

Many FDIC employees who partook in the investigation expressed a fear of retaliation for speaking out against alleged misconduct in addition to a lack of disciplinary actions taken against wrongdoers.

Gruenberg’s exit

Under pressure from the top-ranking Democrat on the Senate Banking Committee, Sherrod Brown of Ohio, Gruenberg announced he would vacate the position once a new chair is confirmed.

The move drew sharp rebuke from Republicans, who viewed it as politically motivated because if Gruenberg resigned immediately then Vice Chair Travis Hill, a Republican appointee, would have automatically become chair.

That would have left the agency deadlocked with one other Republican and two Democrat members on the FDIC’s board of directors, which would likely prevent controversial banking regulations, such as ramped-up capital requirements, from taking effect.

This story has been updated with additional context and developments.

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