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Yesterday, I joined the Board in supporting a resolution promoting accountability at the FDIC. This action is part of our broader effort to transform the culture and structure of the agency so that it is a safe, fair, and inclusive workplace for all FDIC employees. The measure promotes accountability by ensuring that independent, third-party investigations of executives and Board members can proceed immediately, pending the full operationalization of the Office of Professional Conduct (OPC) and Office of Equal Employment Opportunity (OEEO). The resolution also provides a fair means for Cleary Gottlieb to share information regarding allegations against FDIC executives and Board members with independent investigators, while protecting the confidentiality and anonymity of those who engaged in the Cleary Gottlieb review.

This is just one of a number of important actions taken by the FDIC to transform the culture and structure of the agency. As co-chair of the Special Review Committee which oversaw the independent review conducted by Cleary Gottlieb, I remain fully committed to implementing all of the recommendations in the Cleary Gottlieb report.

Real transformation requires continued oversight and monitoring. At my request, the Board also recently received an update on the implementation of the agency’s Action Plan. The Action Plan synthesizes all of the recommendations from the Cleary Gottlieb review, the Office of Inspector General review, and internal initiatives into a single, coherent set of workstreams and projects with sponsors and deadlines. Actions included in the plan include protecting victims and survivors, making structural changes in how incidents are reported and leaders are held accountable, finalizing new anti-fraternization and anti-retaliation policies, and developing a table of penalties to ensure that disciplinary actions are consistently applied.

For the Action Plan update, the Board was joined by Carrie Cohen, Esq. whom, along with her law firm Morrison & Forester LLP, was recently selected unanimously to serve as the Independent Transformation Monitor. Ms. Cohen has been charged with monitoring and auditing the FDIC’s transformation efforts including implementing recommendations from the Action Plan, the Cleary Gottlieb report, reports from the FDIC Office of the Inspector General, and related work.

In addition, the Board voted unanimously to hire a Third-Party Expert who will advise the Board on the agency’s transformation efforts. An announcement is forthcoming.

Cultural transformation requires strong leaders. The Board will soon select Directors to lead the OPC and the OEEO, which were established on June 20, 2024. These offices report directly to the Board rather than management, thus mitigating the risk of retaliation, which the Cleary Gottlieb report identified as one of the root causes of the agency’s issues. Hiring the most qualified and independent Directors to lead these offices with all deliberate speed is a top priority for me, as it represents yet another step towards credible reporting channels that can be trusted by all FDIC employees.

Sustained cultural transformation requires structural change. Taken together, implementing the Action Plan, hiring the Independent Monitor and Third-Party Expert, and standing up the OPC and OEEO represent significant structural improvements for the FDIC. These changes are necessary to truly transform the culture. They are actions, not just words, and are intended to demonstrate to FDIC employees that this time will be different.

Throughout this process, I have put the interests of FDIC employees first and repeatedly emphasized the need to focus on substance – namely, the steps necessary to transform the culture and structure of the agency. The proposal adopted by the Board today provides a clear path for executives and Board members to be held accountable in a timely and fair manner pending the full operationalization of the OPC and OEEO, while also respecting the confidentiality and anonymity of those who engaged in the Cleary Gottlieb review. I was surprised by Director McKernan’s objection, as his counterproposal distracts from our substantive goals.

I remain committed to protecting and serving the employees of the FDIC and continuing to work with all members of the Board to seek consensus to make the agency safe, fair, and inclusive for all.