WASHINGTON A House Financial Services subcommittee unanimously approved subpoenas for three officials at the Consumer Financial Protection Bureau on Tuesday, compelling them to testify about employee allegations of retaliation and discrimination at the agency.
The House Oversight and Investigations subcommittee approved the subpoenas after agreeing to add amendments by top Democrats that included looking further into employee practices at other federal financial agencies. Democrats also added amendments to recognize that the CFPB and its union offered to send other officials to testify on the issue, including Director Richard Cordray.
"Like all of my colleagues I think that any insidious discrimination at the CFPB has to be dealt with but I don't think that we should find ourselves some years from now being criticized for having had an opportunity to look at these issues at other agencies and not having done so," said Rep. Al Green, the lead Democrat on the subcommittee, who proposed the amendments. "This amendment simply allows us the opportunity to look at other agencies with equal and due diligence. The same due diligence that we are courting the CFPB."
A spokesman for the CFPB declined to comment.
At issue are allegations of employee mistreatment first aired by American Banker in a March 6 story that also detailed racial disparities in employee evaluations.
The House oversight subcommittee held a hearing April 2 to discuss the issue, featuring an agency employee, Angela Martin, who claimed the agency retaliated against her and other employees for filing grievances. An outside investigator also testified, corroborating Martin's claims.
At the time of the hearing, the CFPB declined to send specifically requested officials to testify, arguing it would interfere with ongoing cases and jeopardize the credibility of the personnel grievance process. It instead offered Cordray and the head of its Office of Minority and Women Inclusion to appear before the panel.
But top Republicans were not satisfied, saying they want to hear directly from Stacey Bach, assistant director of the Office of Equal Employment Opportunity; Liza Strong, director of Employee Relations; and Ben Konop, the executive vice president of the CFPB employees' union. (Konop's testimony would replace that of Robert Cauldwell, the president of the CFPB's local chapter, who was initially called to testify at the April 2 hearing.)
The subcommittee convened an unusual hearing on Tuesday to vote on compelling those witnesses to testify. During the hearing, top Democrats questioned Republicans' intentions, suggesting they are using the situation as cover to try to eliminate or restructure the agency.
"Subpoenas are extraordinary things. It's not something you do every day and often. So we want to know why the subpoenas are being issued in light of" the CFPB and its union offering other officials, said Rep. Maxine Waters, the top Democrat on the Financial Services Committee. "I am inclined to support the subpoenas today and I'm going to be inclined to support subpoenas in other areas where we have problems. We want transparency. We want it to be open but let's move forward now with a consensus to clean up government and make sure that racism and discrimination does not exist at any of our agencies."
Rep. Patrick McHenry, the subcommittee's chairman, voiced his support to look beyond the CFPB but argued that the three officials named in the subpoenas specifically have a hand in overseeing employee complaints and grievances.
"While Richard Cordray's testimony may be important at some point, the people that operationally know about the case and the matter can answer questions. And this will either put it to rest or raise more questions," McHenry said. "I want to be respectful by trying to limit this in scope to see where we take it and not to jump to grand conclusions."
McHenry also disputed that Republicans are pursuing a broader agenda.
"The crux of this issue with the CFPB is the American Banker piece and the review that this new agency did internally and saw enormous disparities," he said. "What we saw was a brand new agency establish a very bad culture and that's why we're trying to address it. I certainly have concerns about the management structure at the CFPB but what I've tried to do with this investigation is to take one step at time."
The subcommittee announced after the meeting that Bach and Strong have retained outside counsel to represent them in connection with the subcommittee's investigation.