Democrats, Republicans Vow to Continue Probe into CFPB Employment Practices

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WASHINGTON — Lawmakers from both sides of the political aisle reached a rare accord Wednesday during a House Financial Services subcommittee hearing, pledging to further investigate allegations of retaliation and discrimination among employees of the Consumer Financial Protection Bureau.

In the days immediately preceding the hearing, Democrats had called on the Republican committee leadership to cancel it, saying what was meant to be a broad discussion prompted by an American Banker article had instead become about a single case.

By the end of the hearing, however, Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, said the discussion had been productive and raised important issues that warranted further examination.

Initially the hearing turned into "one person, one hearing," Waters told Rep. Patrick McHenry, chairman of the House oversight and investigations subcommittee. "But since it's turned out to be what it is, I agree with you that it should be held. I like what we have here today … and [those testifying] just opened up a conversation in a way we've never had before."

The hearing featured Angela Martin, a senior enforcement attorney at the CFPB, and an independent investigator who was called in to examine her allegations of discrimination and retaliation. Both witnesses said the CFPB has a systemic problem of "hostility" by management after employees file complaints.

But McHenry told Waters the hearing "is not simply about Angela Martin."

"It's the Angela Martins within these agencies, whether there's one more or dozens or hundreds more," he said. "It is important we have that oversight."

The CFPB declined to send witnesses in response to the allegations, saying it would interfere with the integrity of the internal grievance process.

Instead, CFPB Director Richard Cordray issued a statement: "I take seriously the concerns raised at today's hearing and deeply apologize to any member of the CFPB staff who feels that they have not been heard or treated fairly.

"I welcome the opportunity to appear before Congress to discuss these issues fully," Cordray said.

That appears to be where lawmakers are headed next. Democrats urged committee leaders to hold a full panel hearing featuring senior CFPB leaders to discuss broad concerns about the agency's Equal Employment Opportunity process and allegations of discrimination. Moreover, Democrats are seeking to probe possible discrimination at all the federal banking regulators.

"I do not see this as the end, I see this as the beginning," said Rep. Al Green, D-Texas, the ranking member of the House oversight subcommittee. "I believe we are at Genesis and I think Revelations are yet to come. But to get to revelations, we cannot focus solely on one regulator.

"We have to allow revelations to go through the other regulators as well. It's important that we require the empirical evidence necessary to ascertain whether or not this type of behavior that we are investigating today exists in other agencies as well."

Nine Democrats, including Waters and Green, sent letters last week to the inspector generals of all the federal financial regulators as well as the U.S. Treasury Department requesting an investigation of their employment policies and practices with regard to women and minorities.

The hearing originally stemmed from documents obtained and reported by American Banker on March 6 that showed racial disparities among how employees were rated. The story also discussed the more than 100 official grievances filed in the past several months, largely over allegations of pay inequity and unfair treatment. (The CFPB has since said it was changing the performance evaluation process.)

But the hearing largely revolved around Martin's case as a symbol for larger issues within the CFPB. The panel also heard additional testimony from Misty Raucci, a former director of the Defense Investigators Group, who looked into the case on behalf of the CFPB.

Raucci's report, provided to the CFPB in December, strongly backed Martin's allegations that she had been retaliated against by agency managers. The CFPB has said the report is biased and unfair since it relies in part on claims by anonymous sources.

Such a claim is ironic, Martin said, because the agency itself relies on anonymized data for employee evaluations and other actions.

Raucci said Wednesday that she was initially supposed to only collect two to five statements about Martin's case, but that it quickly spiraled into a six-month investigation as she "became a veritable hotline for employees at CFPB, who called to discuss their own maltreatment at the bureau." She said many of the complaints focused on a particular agency division.

"I found that the general environment in Consumer Response is one of exclusion, retaliation, discrimination, nepotism, demoralization, devaluation, and other offensive working conditions which constitute a toxic workplace for many of its employees," Raucci said in her written statement. "The corrosive environment of the CFPB workplace was engendered by the bureau's perpetual failure to uphold its own EEO policies."

A spokesman for the CFPB, Samuel Gilford, rejected Raucci's findings.

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Comments (1)
Hard to finesse the fact that senior management of this federal agency, responsible for ferreting out discrimination against consumers, is discriminating against its own employees. Yet another self-inflicted wound. Similarly hard to ignore the members of the Committee who wanted to cancel the hearing to protect the Bureau from criticism rather than help end the discrimination against employees.
Posted by jim_wells | Wednesday, April 02 2014 at 7:53PM ET
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