The Federal Deposit Insurance Corp. has ended the independent monitorship established to oversee workplace-culture reforms following a 2024 investigation that found pervasive failures to protect employees from sexual harassment, discrimination and other misconduct. The agency said the work now shifts from outside oversight to FDIC leadership and its internal accountability systems.
WASHINGTON — The Federal Deposit Insurance Corp. announced Sept. 30 that Independent Monitor Carrie H. Cohen of Morrison & Foerster LLP has concluded her engagement overseeing and auditing the agency’s workplace-culture remediation program.
The monitorship was created after an independent review led by Cleary Gottlieb Steen & Hamilton LLP concluded that, “for far too many employees and for far too long,” the FDIC had failed to provide a workplace free from sexual harassment, discrimination and other interpersonal misconduct. The review also found that management’s responses and the underlying culture that enabled the behavior were insufficient and ineffective. More than 500 current and former FDIC employees contributed accounts to the investigation.
A milestone, not an endpoint
FDIC Chairman Travis Hill characterized the conclusion of the monitorship as an important milestone in the agency’s culture-transformation effort.
“Two and a half years ago, the Cleary Gottlieb report found that ‘for far too many employees and for far too long, the FDIC has failed to provide a workplace safe from sexual harassment, discrimination, and other interpersonal misconduct,’” Hill said in the agency’s announcement. “Since then, we have taken dramatic steps to transform the agency’s culture.”
According to the FDIC, its reforms have included strengthened procedures for investigating alleged misconduct, holding employees accountable when misconduct is substantiated, significant turnover across the agency’s leadership ranks, and changes intended to encourage employees to raise concerns and differing viewpoints without fear.
The FDIC also said it has implemented all workplace-culture recommendations from the agency’s Office of Inspector General stemming from its 2024 audit work. The OIG has formally closed those recommendations, the agency said.
Monitor cites new foundation
Cohen said her team’s independent assessment found that the FDIC now has core remediation components needed to support lasting cultural change.
“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,” Cohen said.
But Cohen also underscored the limit of the monitor’s role: “As the monitorship concludes, responsibility for carrying these reforms forward rests with the FDIC.”
That distinction will be significant for the banking and regulatory communities. The FDIC’s credibility depends not only on its bank-supervision, deposit-insurance and resolution functions, but also on its ability to demonstrate that its own governance, investigative and personnel systems operate fairly and reliably.
Background
The FDIC established the monitorship after the Cleary Gottlieb review recommended outside, independent scrutiny of reforms involving the agency’s culture, policies, reporting mechanisms and structures governing harassment, discrimination and related misconduct.
The earlier review described an urgent need for sustained reform, finding that a safe, respectful and inclusive workplace was essential to the FDIC’s institutional mission. Its work followed public reporting and employee allegations that brought renewed attention to misconduct and cultural shortcomings inside the agency.
The monitor’s departure closes the formal external oversight phase. The more consequential test is whether the FDIC can maintain effective investigations, protect employees who report misconduct, ensure leadership accountability and preserve a culture in which staff can challenge decisions and raise concerns without retaliation.
For regulated institutions and collection-industry compliance leaders, the episode also serves as a reminder that culture risk is operational risk. Written policies, hotlines and training are necessary, but their effectiveness ultimately depends on credible investigations, visible accountability and a workforce that trusts management will act on complaints.
Upcoming Events
