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Politics & Money

House subpoenas two more in CFPB discrimination investigation

Whistleblowers fear retaliation for voluntary testimony

(Update 1: Added CFPB's annual performance report and counter claim on gender discrimination 1:15 p.m. ET.)

(Update 2: Added CFPB spokesperson comment. 2:25 p.m. ET.)

The House Financial Services Oversight and Investigations Subcommittee will subpoena two more whistleblowers who allege they were witness to or victims of discrimination and retaliation at the Consumer Financial Protection Bureau.

CFPB examiner Ali Naraghi and former bureau employee Kevin Williams asked the committee to be subpoenaed in order to protect their interests and guard against further retaliation by the Bureau.

The House has been investigating allegations of discrimination and retaliation at the CFPB for several months, after a story broken in American Banker in March 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.”

The latest round of subpoenas is part of the subcommittee’s ongoing investigation into what a previous CFPB whistleblower testified is “a pervasive culture of retaliation and intimidation that silences employees and chills the workforce from exposing wrongdoing.”

CFPB spokesperson Jen Howard replied to news of the subpoenaes.

"The Bureau never received any request for these two individuals to testify. Director Cordray is scheduled to testify in front of the House Financial Services Committee on June 18 regarding our semi-annual report," she said in a written statement.

As HousingWire first reported in May, new 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.

However, CFPB disputes the claim of disparate evaluations of male and female employees. It cites its annual performance report that shows, referencing page 18, that there was not a statistically significant difference found for male vs. female ratings (3.83 & 3.89, respectively).

"When allegations of discrimination at the CFPB were first uncovered, my subcommittee committed to investigating these claims and providing all affected Bureau employees a forum to share their stories of mistreatment by agency leaders,” said Oversight and Investigations Subcommittee Chairman Patrick McHenry, R-N.C. “We are continuing these important efforts by subpoenaing two more employees who have experienced both discrimination and retaliation while at the Bureau. This behavior has no place in our government and my subcommittee will not rest until we have exposed those CFPB leaders responsible.”

The findings of Deloitte’s report corroborated whistleblower and CFPB attorney Angela Martin’s testimony that there have been  problems related to the CFPB’s hiring, staff promotions, performance reviews and employee pay since the Bureau’s inception. 

Deloitte’s report also suggests that the Bureau’s Office of Minority and Women Inclusion (OMWI) is ineffective and that CFPB leaders and employees are uncertain what OMWI actually does. Deloitte delivered the study to the CFPB in September 2013.

“Out of the 31 leadership interviews Deloitte conducted, approximately 80% expressed that they do not understand the purpose or objectives of the OMWI office,” the report states.

This will be the third hearing into a pattern of unequal treatment of African Americans, Hispanics, women and those over 40. The first was held April 2 and the second May 21.

At the Subcommittee’s April 2 hearing, Martin testified about the Bureau’s “pervasive culture of retaliation and intimidation,” saying she and her colleagues “have suffered and are suffering at the hands of inexperienced, unaccountable managers.”

At that same hearing, the subcommittee heard testimony from Misty Raucci, an outside investigator hired by the CFPB to examine Martin’s claims. Raucci’s investigation concluded that Martin’s claims of retaliation were valid.

On May 21, the subcommittee heard testimony from two subpoenaed witnesses: Liza Strong, the Director of Employee Relations at the CFPB, and Ben Konop, Executive Vice President of Chapter 335 of the National Treasury Employees.

Konop testified that the employees union “alleged that women and minority employees were being underpaid when compared to similarly situated white male colleagues. To date, the Bureau has denied each of these grievances at all stages, often using inconsistent reasoning, despite what I feel is convincing evidence of low pay for numerous women and minority workers.”


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