The FDIC's Martin Gruenberg era — a nearly two-decade tenure — appears to be coming to an end at the climax of a sweeping agency misconduct scandal. But don't count him out just yet, and brace for a fierce bank lobbying barrage before the whole thing's over. The FDIC chair says he's prepared to step down once a replacement is nominated by President Joe Biden and confirmed by the Senate. The White House says to expect a nominee soon. Biden and the Senate — with Senate Banking Chair Sherrod Brown being a key figure — can act as quickly as they want. Brown said Monday evening that he’s offered names of potential replacements to the White House, though he wouldn't say who. "I've asked the White House to move as close to immediately as the White House can move," Brown said. "As soon as they nominate somebody and we're convinced they're qualified and ready for the job, we'll move." Potential candidates who’ve already been through the confirmation process, and who could possibly move more easily, are already in the conversation. They include Treasury Under Secretary Nellie Liang, a former Fed financial stability official who was once nominated to join the Fed board, and Graham Steele, a recently former Treasury official who was once an aide to Brown. Another name being floated is New York Department of Financial Services Superintendent Adrienne Harris, who has not gone through the Senate. But there's plenty of reason to think it could be a grinding confirmation process not just because we're nearly five months out from an election. It's because the pick will become the focus of a titanic tug-of-war between the banking lobby and financial reformers over whether Washington will subject the industry to much higher capital requirements. Regulators are indicating that they might back off, but the stakes are too high for either side to take a chance. The bank capital fight is why there will be incentives for some Democrats to maintain the status quo and keep Gruenberg in place, just as there were last week. On Thursday, Sen. Elizabeth Warren told Gruenberg his resignation "would do nothing to improve the toxic culture at the FDIC, but it would give Republicans a veto over bank policy.” Following news of his tentative resignation, Warren reiterated her priorities. “I respect FDIC Chair Gruenberg’s decision to step down upon confirmation of a successor,” she said. “The FDIC must work with urgency to improve the agency’s workplace culture and implement the action plan’s recommendations. I support the White House nominating a new leader for the FDIC who has a strong track record of standing up to Wall Street and a demonstrated commitment to supporting President Biden's banking policy priorities.” Given the bank lobby's sway, it's unlikely a "strong track record of standing up to Wall Street" would help with Senate confirmation. Another big question: Who would want the job given the task at hand? It entails taking ownership of an agency with a mandate to improve its deeply dysfunctional culture, while also facing the prospect of being all but powerless if there's a second Trump term. The agency's regular daily work has already been affected. According to a person familiar with the matter, Gruenberg decided to step down after it became clear he would face significant backlash internally. An annual survey of employee happiness released Monday showed that the FDIC ranked second to last among midsize agencies. It's unclear if the dire need to improve the internal dynamics at the agency may spur lawmakers to act more quickly, but they're of aware of the need. "We'll begin to rebuild trust among the 5,000 employees," Brown said. It’s Tuesday — Send tips to zwarmbrodt@politico.com.
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