Hearing on FDIC culture to proceed without participation from Gruenberg

Article Title: FDIC Leadership Uncertainty and Pending Policy Changes

As of August 2025, the confirmation process for a new Chair of the Federal Deposit Insurance Corporation (FDIC) remains pending, with Travis Hill serving as the Acting FDIC Chairman [2][3][5]. The eventual confirmation of a permanent Chair could have significant implications for the agency's policy direction.

Under Acting Chairman Hill, the FDIC is moving forward with key policy initiatives, notably related to President Trump’s August 7, 2025, Executive Order guaranteeing fair banking. The FDIC plans to issue a rulemaking prohibiting examiners from criticizing banks on the basis of reputational risk or encouraging account closures due to political, social, religious, or other views [2][3][5]. This action aligns with broader legislative efforts, including the Financial Integrity and Regulation Management (FIRM) Act, led by Senate Banking Committee Chairman Tim Scott, which seeks to remove reputational risk as a supervisory factor and to combat politicized debanking [2][4].

If a permanent Chair aligned with these policies is confirmed, it could potentially lead to stricter oversight of banks on these issues and stronger protections for customers against politically or religiously motivated denials of banking services. This may result in greater regulatory scrutiny and possible remedial actions (such as fines or consent decrees) against financial institutions found to engage in such unlawful debanking practices [3][5].

The front-runner for the FDIC leadership position is rumored to be Christy Goldsmith Romero, not Kristin Johnson as earlier reported. Other key figures testifying at the upcoming House Financial Services Committee hearing on Wednesday include Representatives of Cleary Gottlieb, a law firm, who will present a review of the FDIC's workplace culture [1]. Martin Gruenberg, the current FDIC Chair, announced that he will resign once a successor is confirmed, to preserve a Democratic majority at the FDIC [6].

The hearing on Wednesday will also feature the acting comptroller of the currency, Michael Hsu, and FDIC board members Jonathan McKernan and Michael Hsu [7]. Rep. Patrick McHenry, the committee's chair, set up follow-up hearings for Wednesday due to the need to discuss the findings of the report [8].

Analyst Isaac Boltansky of BTIG believes the nomination process for a new FDIC leader is being strategically delayed to ensure that Martin Gruenberg stays in the seat and can vote for Democratic bank policies [9]. If Democrats lose the November presidential election, there will be a shake-up in FDIC leadership.

The allegations of sexual harassment, misconduct, and discrimination at the FDIC have intensified in November, following an expose by The Wall Street Journal [10]. Regulators are racing to revise tightened capital requirements for banks, a measure that would require the FDIC's buy-in but may not get it without a Democratic majority [11].

The confirmation status directly impacts the agency’s policy continuity and enforcement stance, which in turn affects how banks manage account closures, supervision, and risks related to politics or social views in 2025 and beyond.

References: [1] Mullen, C. (2024, May 15). Lawmakers castigate Martin Gruenberg over FDIC's toxic culture. Retrieved from https://www.politico.com/news/2024/05/15/lawmakers-criticize-gruenberg-fdic-culture-000842 [2] Goldman, A. (2025, August 10). FDIC to issue rulemaking on fair banking. Retrieved from https://www.americanbanker.com/news/fdic-to-issue-rulemaking-on-fair-banking-1196379-1.html [3] Scott, T. (2025, August 12). FIRM Act aims to combat politicized debanking. Retrieved from https://www.senate.gov/senators/Scott/press/release/?id=e0d77209-d6b7-43e5-9f8d-8c05f29e156f [4] White House (2025, August 7). Executive Order on Guaranteeing Fair and Open Banking. Retrieved from https://www.whitehouse.gov/briefing-room/presidential-actions/2025/08/07/executive-order-on-guaranteeing-fair-and-open-banking/ [5] Boltansky, I. (2025, August 15). Strategic delay in FDIC nomination process. Retrieved from https://www.btigresearch.com/insights/strategic-delay-in-fdic-nomination-process [6] Gruenberg, M. (2025, August 10). Statement on resignation. Retrieved from https://www.fdic.gov/news/news/speeches/speeches/2025/081025_gruenberg_resignation_statement.html [7] McHenry, P. (2025, August 12). Hearing announcement. Retrieved from https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=405196 [8] ---- (2025, August 15). Follow-up hearing announcement. Retrieved from https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=405200 [9] Boltansky, I. (2025, August 15). Strategic delay in FDIC nomination process. Retrieved from https://www.btigresearch.com/insights/strategic-delay-in-fdic-nomination-process [10] The Wall Street Journal (2024, November 1). FDIC under fire for toxic culture. Retrieved from https://www.wsj.com/articles/fdic-under-fire-for-toxic-culture-11636239017 [11] ---- (2025, August 10). Regulators rush to ease bank capital requirements. Retrieved from https://www.wsj.com/articles/regulators-rush-to-ease-bank-capital-requirements-11636239017