Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg faced questioning and criticism from legislators on Tuesday regarding allegations of systemic sexual harassment and discrimination within the agency. The allegations were revealed in an investigative report published by The Wall Street Journal, prompting an ongoing federal investigation into the toxic work environment.

During his testimony before the Senate Banking Committee, Gruenberg expressed his personal concern and distress over the report's findings. The investigation uncovered shocking incidents, such as female employees receiving explicit photos from their male superiors and being told that engaging in sexual activities would boost their career prospects. Additionally, the report revealed instances where women were denied opportunities for advancement.

Gruenberg assured senators that the experiences described in the report were unacceptable and pledged to take appropriate actions to address the situation. However, when questioned by Republican Senator Mike Rounds about his prior knowledge of the allegations, Gruenberg stated that he was generally unaware of the specific cases detailed in the report.

Following the report's publication, the FDIC promptly announced its decision to hire a law firm to conduct an independent investigation, demonstrating a commitment to accountability and transparency. Gruenberg stated that he expects the findings from the review to be made public within the next 90 days or sooner.

This is not the first time the FDIC has come under scrutiny for its handling of sexual harassment. In 2020, the agency's inspector general released a report highlighting the lack of an adequate sexual harassment prevention program and the need for policy improvement. The report also revealed that 8% of respondents in a 2019 survey reported experiencing sexual harassment between January 2015 and April 2019.

Gruenberg acknowledged that previous FDIC chairs held responsibility for addressing the issue but emphasized the steps taken to implement the inspector general's recommendations. However, he acknowledged that these measures did not sufficiently address the underlying cultural issues within the agency.

Meanwhile, FDIC board members Vice Chair Travis Hill and Director Jonathan McKernan issued a joint statement emphasizing their commitment to accountability and holding responsible employees and managers accountable for inappropriate conduct.

Gruenberg's testimony before the Senate Banking Committee was just the beginning of his scrutiny. He is scheduled to testify before the House Financial Services Committee on Wednesday, where he will face further questioning about the agency's handling of sexual harassment and discrimination allegations.

As the investigation continues, the FDIC is under pressure to take swift action to address the toxic work environment described in the report. The outcome of the investigation and subsequent measures taken by the agency will be closely watched as legislators and the public expect tangible changes to prevent such incidents and promote a safe and inclusive workplace at the FDIC.