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Investments

GAO takes up investigation into discrimination at CFPB

Non-partisan investigation comes at request of House Republicans

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The Government Accountability Office will look into the CFPB’s organizational culture and management practices in light of allegations that bureau managers are discriminating against employees based on race and gender and retaliating against employees who complain.

Investigations and Oversight Subcommittee Chairman Rep. Patrick McHenry, R-N.C., said the GAO had agreed to conduct the review during a hearing with CFPB Director Richard Cordray. 

The agreement comes at the request of Republican members of the House Financial Services Committee. The GAO is a non-partisan department of the federal government and not subject to majority or minority party direction.

“Since the subcommittee opened its investigation into allegations of discrimination and retaliation at the CFPB, no fewer than 32 employees have come forward about their maltreatment,” McHenry said. “These 32 brave leaders have come forward to do what is right: to protect their colleagues who suffer, and they have stood up even in the face of retribution from their managers if they are found out.

“Shortly, all CFPB employees will have an opportunity to confidentially share all of their concerns with the Government Accountability Office,” he said. 

Evidence shows, and the CFPB has conceded, that white male employees were more likely to receive positive performance ratings than minority, women and older employees. The CFPB was aware of these problems as early as September 30, 2013, when a Deloitte Consulting report showed there were disparities in employee evaluations.

The initial Congressional investigation was prompted by a story broken in American Banker in March that detailed a pattern of personnel problems including evidence that “the CFPB's own managers have shown distinctly different patterns in how they rate employees of different races.”

According to confidential agency data reviewed by American Banker, “CFPB managers show a pattern of ranking white employees distinctly better than minorities in performance reviews used to grant raises and issue bonuses. Overall, whites were twice as likely in 2013 to receive the agency’s top grade than were African-American or Hispanic employees.”

Since then it has come to light that the CFPB management was aware of the allegations in January 2014.

The GAO investigation was requested by Chairman McHenry as well as Financial Services Committee Chairman Jeb Hensarling, R-Texas, and and Financial Institutions and Consumer Credit Subcommittee Chairman Shelley Moore Capito, R-W.V.

The request comes presumably to answer charges the investigation into the CFPB is political.

“The problem is a CFPB management culture that condones intimidation, discrimination, and retaliation.  And if the Director has failed to reprimand and remove bad managers, then the problem is also his leadership – or lack thereof,” McHenry said.

To read witness testimony and watch previous Subcommittee hearings looking into these allegations, click herehere and here.

HousingWire reached out to the CFPB for comment and will update when available.

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