PeakDash

WASHINGTON (TND) — Lawmakers spent a second consecutive day grilling the leader of the agency that oversees U.S. banks and suggesting he resign from his position after an investigation found a culture of rampant sexual harassment and toxic workplace culture that shifted attention away from a lengthy list of pending regulatory moves that could reshape the U.S. financial system.

Leaders of the nation’s agencies that oversee the financial industry and system have appeared in front of Congress the last two days for oversight hearings that come after last year’s string of bank failures sparked a wave of moves to shore up the banking system and avoid future issues.

But most of the hearings have been dominated by a bipartisan grilling of FDIC chair Martin Gruenberg for his handling of workplace culture after a scathing report found there is widespread sexual harassment and discrimination within the agency. Several lawmakers have called on him to resign from his position and grilled him on exactly what he is doing to address the problems.

An independent review of the FDIC’s workplace culture said it is an environment that fostered “hostile, abusive, unprofessional, or inappropriate conduct," and raised questions whether Gruenberg is credible enough to lead the agency through a transformation. The report, released last week, included noted incidents of stalking, harassment, homophobia and other issues.

More than 500 workers reported incidents in the investigation, which has sparked calls for Gruenberg to resign from his post.

“I again want to apologize and express how deeply sorry I am. I also acknowledge my own failures as chairman, both at failing to recognize how my temperament in meetings impacted others and for not having identified deeper cultural issues at the FDIC,” Gruenberg said. “I am personally committed to addressing these issues. We accept all the recommendations of this report and are incorporating them into our existing action plan for a safe, fair and inclusive work environment to restore credibility with our workforce.”

His repeated apologies and commitments to fix all the issues laid out in the report were met with fierce skepticism from lawmakers on both sides of the aisle, though Republicans were much more adamant that he should resign.

“Do I understand you to assert that you’re the person to clean up the FDIC,” Sen. John Kennedy, R-La., said in a line of questioning about the report. “Do you also believe that Elvis is alive? Do you also believe in Bigfoot?”

Gruenberg’s tenuous position at the FDIC comes at a time with several major overhauls to the nation’s financial system are pending, including rules the agency itself is trying to implement in the wake of the wave of bank collapses last year. If Gruenberg were to resign from the position he has held for 10 of the last 13 years, the FDIC board may not have enough votes to pass the rules being proposed, a point several Republicans took issue with.

The list of proposals includes a plan to increase regulatory oversight of banks by instituting new rules to include stricter scrutiny of banks that hold as low as $100 billion in assets and forcing them to hold more capital to withstand any potential bank runs.

“These giant banks threaten our entire economy when they collapse, but strong capital requirements allow them to better absorb shocks without needing a bailout from the taxpayers,” said Sen. Elizabeth Warren, D-Mass., who is one of the most outspoken lawmakers when it comes to strict oversight and regulations for the financial sector.

Banks and some GOP lawmakers have been adamantly opposed to all the new proposals over concerns that they could lead to stricter lending standards that make it harder for consumers and businesses to obtain lines of credit.

A review conducted by the Federal Reserve after the bank failures found regulators failed to act and identify to act quickly enough, along with recommending tougher regulatory frameworks for banks to operate under.

Another significant policy reform under consideration by federal regulators is Basel III, a set of measures in response to the late-2000s financial crisis to strengthen regulation, supervision and risk management of banks. The proposals made in Basel III have faced fierce pushback from the financial services industry that argues it poses a risk to the entire U.S. economy through tighter lending conditions.

“The capital standards with the Basel III puts so much capital on the sidelines,” said Sen. Tim Scott, R-S.C. “That capital allows folks like me coming from poverty to experience the American dream because you have the ability to get a loan. Parking more capital on the sidelines really is a way of disenfranchising more Americans and not necessarily making the system more fair.”

Barr and other Fed officials have said that substantial changes are under consideration as they move forward with Basel in response to the public comments about it.

ncG1vNJzZmivmpawtcKNnKamZ56axLR7zZqroqeeYsSwvsudZpuZnqB6s7HGrqOarJ%2BnwG7AzrGgnGWnpL%2BsvMuamp5lk6q5tcHRnmSorpWnwKmtw6iurGWfq7Kzv8ign61ln5t6p7XNmqWcoZGherTF0q2cpmWWmbakecWem56qkaF6s7HSnqmvnV2irrPAyKdkoKqlmrujsdGgZJuZnqB6p63IpayrnaNisKK8yK2YpWWimrOwvsw%3D