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FDIC ends outside oversight of its harassment reforms after closing every 2024 audit recommendation
FDIC ended its independent workplace-culture monitorship on Wednesday and said all inspector general recommendations from its 2024 audit are formally closed. Outgoing monitor Carrie Cohen said keeping the reforms going now rests with the agency, led by Chairman Travis Hill.
The Investor · Invest desk
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What happened
- Cleary Gottlieb's 2024 review found pervasive harassment, discrimination and other misconduct at the FDIC, with reports coming particularly from female and minority employees.
- Hill was at the FDIC while many of the allegations took place, as vice chair under the Biden administration and as a top adviser to former chair Jelena McWilliams.
- Sen. John Kennedy said he would not vote to confirm Hill without concrete accountability, including a progress report within 30 days, then voted to advance him after satisfactory reports.
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Why it matters
- contradiction American Banker's summary describes the closed items as the 2024 workplace investigation's recommendations, while its account of the announcement names only the inspector general's audit recommendations, so it is not confirmed that every Cleary Gottlieb item is covered.
- constraint Kennedy has already cast the confirmation vote he held over Hill, so the Senate has used its strongest lever on this issue and the inspector general is the main outside reviewer left.
- exposure Any recurrence found from here tests Hill's own pledge to uphold the reforms directly, and the agency will have no current outside monitor's assessment to point to.
Carrie Cohen, the Morrison Foerster lawyer who ran the monitorship [7], was exact about what her team checked. "As a direct result of the Monitorship Team's independent assessment of the FDIC's remediation design and engagement with the agency at all levels, the FDIC now has the remediation elements in place that are critical to lasting culture transformation," she said [6]. Her test was whether remedies had been designed and installed. The inspector general's March report looked at behaviour, over a period that ran into 2025 [5], the year after Cleary Gottlieb delivered its findings [1].
Both records can be accurate, because they count different things: remedies delivered in one, conduct in the other. The FDIC has formally closed the inspector general's 2024 audit recommendations [2], and from Wednesday it has no outside monitor reporting on its remediation [1]. Hill accepted the handover in the agency's own language. "The conclusion of the independent monitorship is an important milestone in these efforts," he said [9]. "The FDIC remains committed to sustaining this progress and maintaining a workplace where employees are treated with professionalism and respect, where employees are proud to work, and where potential recruits want to work," he said [10].
The 2024 review has already stopped short at the top once. Martin Gruenberg, chairman at the time, was found to have yelled at and berated subordinates. The report did not explicitly call for his removal because he was not accused of sexual misconduct or harassment, and he kept his position [13].
From here the reforms can go one of three ways. They may hold, and a later inspector general review finds nothing like what it reported for 2025. They may slip, and a later review documents problems after the monitor's exit, which would call Wednesday's closures into question. Or no further review comes, and the closures stand as the last word on the 2024 findings by default.
I think the closure says little about conduct after 2025. The monitor assessed design, and the most recent measure of conduct in the record, the March report, showed the problems still present. An inspector general finding that covers the period after the monitorship and shows the conduct described in the 2024 review has stopped would prove that view wrong.
What to watch
- A new FDIC inspector general review of workplace conduct covering 2026, the first period without an outside monitor.
- Whether the FDIC says which Cleary Gottlieb recommendations it considers closed, as distinct from the inspector general's audit recommendations.
- Whether Sen. John Kennedy or other lawmakers ask the FDIC for further progress reports now that Hill's confirmation is done.