FDIC appoints independent monitor, creates two outside offices to handle harassment and discrimination complaints

The Federal Deposit Insurance Corporation said Thursday it is moving to strengthen oversight of its internal culture and complaints process, announcing the appointment of an independent transformation monitor and the board’s approval of two new offices that will sit outside the agency’s management structure.

FDIC Chair Gruenberg told reporters the agency has incorporated recommendations from a third-party review overseen by a special board committee and has appointed an independent transformation monitor “to audit the agency’s implementation of all the recommendations” from its action plan and the third-party review. The board also approved establishing two independent offices that will receive complaints of harassment and discrimination, arrange for independent third-party investigations and be responsible for discipline resulting from those investigations. Those offices will report directly to the board, he said, and director selection is underway.

The board also approved an interim measure to use other federal agencies to arrange third-party investigations until the new offices are staffed and operating. When a reporter raised criticisms attributed to Jonathan McKernan that the process might hinder outside investigators’ access to information, Gruenberg said the interim use of other agencies was intended to ensure investigations proceed independently while the new offices are established.

Why it matters: The steps respond to internal and external reviews of agency culture and investigative independence, and the structural choice to house investigatory offices outside management and have them report to the board is intended to enhance independence and public trust.

Next steps: The FDIC is selecting directors for the new offices and has appointed a third-party expert to advise on workplace-culture reforms. Gruenberg said the agency considers culture change a top priority and will continue implementation and oversight work.