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FDIC nominee promises ‘complete overhaul’ of agency culture

'I will bring accountability,' Romero tells senators

Christy Goldsmith Romero, President Joe Biden’s nominee to chair the FDIC, testifies at her confirmation hearing on Thursday.
Christy Goldsmith Romero, President Joe Biden’s nominee to chair the FDIC, testifies at her confirmation hearing on Thursday. (Screenshot/Senate Committee on Banking, Housing and Urban Affairs)

Christy Goldsmith Romero told senators Thursday she would implement a “complete overhaul” of the way the Federal Deposit Insurance Corporation manages its employees and responds to complaints if she is confirmed to lead the agency.  

President Joe Biden last month nominated Romero, a member of the Commodity Futures Trading Commission, to replace embattled FDIC Chair Martin Gruenberg. If confirmed, she would take over following an independent investigation that found the FDIC failed to protect its staff from sexual harassment, discrimination and other interpersonal misconduct.  

“I would prioritize a complete overhaul of the FDIC’s workplace culture,” Romero said at a Senate Banking Committee hearing.  

She told the panel that she intends to “modernize” how the FDIC runs internally, lift up staff who are doing the “right thing,” encourage complaints and mold the far-flung FDIC field operations and headquarters into a seamless organization. She emphasized she won’t tolerate the behavior that has roiled the agency.  

“It must not continue, and I will bring accountability,” she said.  

Sen. Tim Scott, R-S.C., the ranking member, brought up whistleblower complaints filed at the Troubled Asset Relief Program when she was the special inspector general for TARP.

Romero said there was no comparison between the situations at TARP and the FDIC. She said TARP had an “independent and fair process” for hearing out employees and that there was only one finding against the agency in her 11 years there.  

“We never had anyone complain about sexual harassment,” Romero said. “We never had these issues of retaliation. If there had been discrimination, harassment, retaliation, I would have taken it seriously and dealt with it right away.”  

Scott also expressed concerns about what he said was Romero’s lack of bank-regulation background, particularly with a major proposal pending on bank capital standards, known as Basel III endgame.

“You have little experience with bank supervision or prudential policymaking, let alone managing the world’s largest deposit insurer,” Scott said. “The next chair needs to be prepared to lead, because not only are we going to have to confront the magnitude of Basel III endgame, but as I said a few times already, correcting the culture of the FDIC is so important. And it makes it challenging to have on-the-job training, from my perspective.”  

In response to questions from Democrats, Romero pointed out that she was deeply involved in analyzing the 700 banks that took part in TARP following the financial crisis. She said she examined risks they faced and assessed their health.  

“I can’t think of better experience,” said Sen. Elizabeth Warren, D-Mass.  

Senate Banking Chairman Sherrod Brown, D-Ohio, noted that Romero had been unanimously confirmed for previous regulatory positions.  

“Looking at your experience and background says to me there is no real reason to oppose you except partisan reasons, and I hope the committee rises above that,” Brown said.  

Romero also was pressed by some senators on whether she would support significant changes to the bank capital standards proposal. In testimony earlier this week, Federal Reserve Chairman Jerome Powell said banking regulators were close to agreement on revisions.  

“I think a re-proposal is always on the table when you have a rule that’s proposed and you get that many negative comments,” Romero said. “I’m not looking to get something done fast. I’m looking to get something done right.”  

Other nominees questioned at the hearing were Caroline Crenshaw, a Securities and Exchange Commission member who is being renominated; Kristin Johnson, who is nominated for assistant Treasury secretary; and Gordon Ito, who is nominated to be a member of the Financial Stability Oversight Council.  Brown said he wants to move quickly on all the nominations.