Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg has announced his resignation, effective January 19, 2025, just one day before President-elect Donald Trump is set to take office. Gruenberg’s decision clears the way for the incoming administration to appoint new leadership at one of the nation’s top banking regulatory agencies.

Gruenberg, a Democrat and vocal Wall Street critic, has served at the FDIC for nearly two decades and has held the chairmanship twice, under both President Barack Obama and President Joe Biden. Despite his lengthy tenure, Gruenberg has faced criticism in recent years over accusations of workplace misconduct within the FDIC, including reports of sexual harassment and a toxic work culture.

A Wall Street Journal investigation in November 2023 and subsequent external reviews highlighted these issues, leading to bipartisan calls for Gruenberg’s resignation. Responding to pressure, Gruenberg announced in May that he would step down once a successor was named. However, with the Senate failing to confirm Biden's nominee, Commodity Futures Trading Commission official Christy Goldsmith Romero, Gruenberg remained in his role until now.

Republican lawmakers welcomed Gruenberg’s departure but criticized the timing. Sen. Tim Scott (R-SC), the ranking member of the Senate Banking Committee, called the resignation “long overdue,” accusing Gruenberg of prioritizing politics over effective leadership. Rep. Bill Huizenga (R-MI), who introduced a resolution calling for Gruenberg’s immediate removal, echoed similar sentiments, stating, “The damage has been done.”

Gruenberg’s resignation paves the way for Vice Chairman Travis Hill, a Republican, to assume the acting chair role. Hill is also reportedly being considered for permanent appointment by Trump’s transition team, according to Reuters. This change aligns with Trump’s broader plan to overhaul financial regulations, which he has criticized as burdensome and stifling to economic growth.

Gruenberg’s departure comes at a critical time for the FDIC. The agency is jointly responsible for overseeing U.S. banks and is involved in several contentious regulatory projects, including the implementation of new long-term debt requirements for regional banks and the Basel III Endgame capital rules.

The FDIC is also grappling with the aftermath of recent banking failures, which have raised questions about the agency’s oversight and crisis management capabilities. Trump has pledged to streamline regulatory frameworks, and Gruenberg’s resignation is expected to accelerate these efforts.

In his resignation message to FDIC employees, Gruenberg expressed gratitude for the opportunity to serve. “It has been the greatest honor of my career to serve at the FDIC,” he wrote. “I have especially valued the privilege of working with the dedicated public servants who carry out the critically important mission of this agency.”

With Gruenberg stepping aside, the Trump administration has a clear path to reshape the FDIC to align with its regulatory vision. The incoming leadership will face significant challenges, including maintaining stability in the banking sector and navigating the evolving financial landscape.

The FDIC chair transition will likely be a focal point of discussions as bank regulators, including Gruenberg, testify before Congress this week.

Washington Examiner Article