Key Takeaways From CFPB Whistleblower Hearing in House Subcommittee

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Witnesses presented new evidence at a recent House Subcommittee hearing that the Consumer Financial Protection Bureau (CFPB) discriminated against its employees and retaliated against the whistleblowers.

Thursday’s hearing, which took place in the Oversight and Investigations Subcommittee of the House Financial Services Committee, was titled “Examining Continuing Allegations of Discrimination and Retaliation at the Consumer Financial Protection Bureau.” It was the fourth hearing in which the CFBP’s employees or former employees have testified of discrimination and retaliation within the Bureau since the investigation of such allegations began in April 2014. In two of the previous hearings, members of the Committee questioned CFPB Director Richard Cordray about the CFPB’s alleged unacceptable workplace environment. The director promised at those hearings to take action, according to an announcement on the House Financial Services Committee website.

Here are some key takeaways from Thursday’s hearing:

  • “Unacceptable behavior” – Witnesses testified that the “unacceptable behavior” of discrimination and retaliation at the CFPB has gotten worse despite the Committee’s urging of Cordray to take action.
  • New evidence – The Committee determined that greater accountability and oversight from the Bureau is needed based on new evidence that indicates a “culture” of discrimination and retaliation at the CFPB
  • “Ineffective and insufficient” – The Committee found that any action the CFPB has taken to address the culture of discrimination and retaliation has been “ineffective and insufficient.”

“Of all the federal financial agencies, the CFPB has the worst track record of protecting its own employees against discrimination,” said Sean Duffy (R-Wisconsin), Chairman of the Oversight and Investigations Subcommittee. “The per capita number of Equal Employment Opportunity complaints at the CFPB is far higher than at other federal agencies. Despite disturbing reports of low morale and Congressional investigations, the leadership at the CFPB continues to turn a blind eye to the treatment of its own people. The CFPB is more concerned with bad press than the underlying problem, and has done little more than run an ineffective internal PR campaign to assuage employee concerns.”

Witnesses who testified at Thursday’s hearing were Robert Cauldwell, President of the National Treasury Employees Union Chapter 335 and CFPB Examiner, and Florine Williams, Senior Equal Employment Specialist of the CFPB’s Office of Civil Rights.

Cauldwell went as far as to say the word “allegations” should be removed from the title of the hearing, because “discrimination and retaliation against CFPB employees is a fact.” He claimed in his testimony that the CFPB’s leadership has failed to carry out the Bureau’s mission as outlined by the Dodd-Frank Act.

“Hubris, persecution, retaliation, discrimination,” Cauldwell said. “These are not words one would associate with an agency that is supposed to protect American consumers from these very same vices in the financial industry. It is my belief, based on careful consideration and talks with employees for the past two years, that the Bureau does not have the capacity to clean someone else’s house when they cannot get their own house in order.”

Williams said that until she was employed at CFPB, she had never witnessed such “blatant and willful disregard for the law” as well as merit system principles and well-being of employees.

“Because of the CFPB’s mission, I believed I was joining an EEO program where the rule of law was respected, and the workforce would be treated with civility, dignity, and professionalism,” Williams said. “Unfortunately, my experience at the Bureau has been a radical departure from the 32 years that preceded it.”

U.S. Congressman Randy Neugebauer (R-Texas), Chairman of the House Subcommittee on Financial Institutions and Consumer Credit, introduced the Financial Products Safety Commission Act (H.R. 1266) in March to replace the CFPB’s Director with a bipartisan five-member board. On Thursday, Neugebauer praised the witnesses for having the courage to “shine the light” on the “shocking” allegations of discrimination and retaliation within the Bureau.

“Before the CFPB can protect the American consumer, it must protect its employees,” Neugebauer said. “It is absolutely unacceptable that two years later concerns of discrimination and retaliation have not been adequately handled by CFPB management.”

CFPB spokesman Sam Gilford issued the following statement in response to the hearing and allegations: “The CFPB takes these issues extremely seriously and we will continue our ongoing efforts to improve as an organization. The Bureau is committed to fostering an inclusive and equitable workplace where all employees are treated fairly. To that end, the Bureau has implemented robust processes for handling and redressing Equal Employment Opportunity complaints. As the Office of Inspector General concluded in its March 2015 report, the CFPB’s processes ‘give employees the opportunity to have their complaints heard, investigated, and redressed in a fair and equitable manner.'”

Gilford pointed to a comprehensive review of the CFPB conducted by Charles River Associates last year, which the Bureau ordered to have conducted after detecting demographics-related differences in FY12 and FY13 employee performance management ratings. The independent analysis concluded that “It is important to note that this research to find the root causes of the distributional differences did NOT find any evidence of intentional discrimination” and “The CFPB’s efforts to understand and address the problem of distributional differences in PM ratings have not only been reasonable and sufficient, but demonstrate a sensitivity and level of concern that is much greater than other organizations.”

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