By Douglas Gillison and Pete Schroeder
WASHINGTON (Reuters) - The head of the Federal Deposit Insurance Corporation plans to tell Congress he will establish a new, independent office devoted to professional conduct after an external review found comprehensive mistreatment of employees at the U.S. bank regulator under his watch.
FDIC Chairman Martin Gruenberg said in prepared testimony submitted to the House Financial Services Committee that addressing workplace problems is his "top priority."
"I love this agency and its people must be protected," he said in the testimony.
Gruenberg is set to testify Wednesday before the House panel along two other bank regulators. The hearings come as Gruenberg has faced several calls for his resignation over a workplace misconduct scandal that has rocked the agency, which is tasked with ensuring the stability of the banking system.
Hundreds of agency employees in recent months contacted an outside investigative team to report instances of sexual assault, harassment, racial discrimination and whistleblower retaliation in the wake of a November Wall Street Journal expose, according to a report released this month. Favorability ratings for top FDIC management have also fallen sharply on Gruenberg's watch.
Gruenberg's ouster would hamstring much of President Joe Biden's financial regulatory agenda in an election year, and thus far key Democrats on Capitol Hill have refrained from calling for Gruenberg to step aside. He is also set to testify before the Senate Banking Committee Thursday.
In his testimony, Gruenberg said he accepted the findings of the independent review, which also reported several instances where he personally lost his temper with subordinates.
He said the FDIC will adopt all of the report's recommendations, including hiring a monitor to track the agency's culture overhaul and a third-party expert to assist in that project. Gruenberg said he hopes to kick off the effort this week.