CFPB Still Under Fire For Discrimination Claims

The Consumer Financial Protection Bureau (CFPB) is not off the hook yet for allegations of employee discrimination and retaliation, at least not for one Congressional subcommittee who is taking its investigation further into the federal regulatory agency.

The latest step in an ongoing investigation that began in April, the House Financial Services Oversight and Investigations Subcommittee last week voted to authorize subpoenas for two more whistleblowers who claim instances of discrimination and retaliation at the CFPB. 

“We are continuing these important efforts by subpoenaing two more employees who have experienced both discrimination and retaliation while at the Bureau,” stated Subcommittee Chairman Patrick McHenry (R-NC). “This behavior has no place in our government and my subcommittee will not rest until we have exposed those CFPB leaders responsible.”

Those called to testify before the Subcommittee included CFPB Examiner Ali Naraghi and former Quality Monitor of CFPB’s Office of Consumer Response Kevin Williams, both of whom asked to be subpoenaed in order to guard against further retaliation from the CFPB.

Naraghi, an examiner in the CFPB’s Southeast Region, claimed in his testimony that he was a victim of retaliatory practices by several executive level agency employees.

In one circumstance, Naraghi claimed Bureau management had at one point referred to him as a “f’ing foreigner,” despite his being a naturalized U.S. citizen. 

The alleged retaliation began after Naraghi had raised a number of concerns regarding various CFPB examination practices such as inexperienced exam managers and the lack of a risk model to ensure “equitable assessment across institutions.”

“I soon found that voicing a professional dissenting opinion that is any way at odds with Bureau management—even in the smallest of ways—will result in retaliation,” Naraghi said.

Naraghi, who served 14 years in various positions with the Federal Reserve Board of Governors prior to joining the CFPB, then provided an example of the discrimination he faced after suggesting to CFPB Chief Human Capital Officer Dennis Slagter that senior management should consider including experienced staff, such as those from the Federal Reserve, when strategizing about the agency’s large bank supervision program.

“In response, Mr. Slagter stated ‘if you don’t like it go back to the Federal Reserve Board,'” Naraghi said. “This is in direct contradiction to CFPB’s stated policy of welcoming feedback.”

Also testifying, Kevin Williams shared his experiences working with the CFPB from July 2011 to February 2014. 

“I was attacked, maligned, and humiliated on a daily basis,” Williams said during his testimony.

Williams claimed one of his managers, who was African-American, did little more than discredit his work, disparage his character and downplay his achievements.

“My black managers—and, thus, the Bureau—treated me as a pariah because as a black male I was not qualified to question the information provided by consultants precisely and merely because most of them were young white men.” 

He also went on to say a “plantation” mentality existed at the CFPB, referring to his time as a charter member in the Intake Unit at the Office of Consumer Response. 

“There, I personally witnessed and was the victim of racial discrimination perpetrated by black as well as white managers,” Williams said. “The unit was dubbed the Plantation because when we started, the majority of black employees were assigned to Intake, which was basically data entry.”

Wednesday’s testimonies follows two previous hearings on employee allegations, one of which was April 2, where CFPB attorney and whistleblower Angela Martin testified about the agency’s “pervasive culture of retaliation and intimidation.”

Additionally, Martin claimed she and her colleagues also “suffered and are suffering at the hands of inexperienced, unaccountable managers.” 

These allegations were validated during that same hearing after the Subcommittee heard the testimony from Misty Raucci, an outside investigator the CFPB hired to examine Martin’s claims.

“Like Ms. Martin, my story is a microcosm and when you look at me you should see dozens and even scores of employees in addition to me,” said Naranghi during the Wednesday hearing.

Last month, CFPB Director of Employee Relations Liza Strong and Ben Konop, executive vice president of Chapter 335 of the National Treasury Employees, were subpoenaed to testify before the House Subcommittee.

During the hearing, Konop testified that the employees union “alleged that women and minority employees were being underpaid when compared to similarly situated white male colleagues,” the Subcommittee noted. 

In a separate hearing this week, CFPB Director Richard Cordray came under fire from the House Committee on Financial Services for his agency’s annual report to Congress.

During the hearing, Chairman Jeb Hensarling (R-TX) revealed that Williams’ testimony, which would be heard later that afternoon, had already been delivered to the committee. 

“The frequency and duration of these occurrences, speaking of discrimination, created a hostile work environment for all blacks at the Bureau whether they were unwitting manipulated black managers or mistreated hard-working black employees,” said Hensarling as he read Williams’ testimony. “It’s just that we, the later, suffered the objectively adverse consequences.”

These “disturbing developments” demonstrate why there must be structural reform at the CFPB, Hensarling added. 

“Consumers deserve accountability—not only from Wall Street but they deserve it from Washington, too,” he said. “Yet, by design the CFPB remains arguably the least accountable Washington bureaucracy in the history of America and it shows. This must change.” 

Written by Jason Oliva

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