Tags: CFPB | Congress | probes | GAO

CFPB Official: Congressional Probes 'Political Theater'

By Jennifer G. Hickey   |   Thursday, 28 Aug 2014 01:15 PM

Officials at the Consumer Financial Protection Bureau, the agency charged with defending consumers from predatory lending and discrimination by financial and housing institutions, say investigations into charges of racial discrimination amount to "political theater" that will eventually go away, the Credit Union Times reported.

"Last year there were 97 some odd thousand [Equal Employment Office] complaints filed in the U.S. Only one has resulted in a congressional hearing – the one happening on Wednesday," Scott Pluta, the assistant director for the CFPB’s Office of Consumer Response, told bureau staffers two days before a congressional oversight hearing, according to a transcript of a March meeting obtained by the Times.

"It is an unfortunate event but it is just an event. This too shall pass, a week from now, a month from now, months from now, a year from now, it will eventually be in the ether but it will pass," he added.

Pluta's bravado contrasts with public statements made by CFPB Director Richard Cordray, who testified before Congress in July that the bureau is "committed to ensuring that all Bureau employees are treated fairly and that they receive the respect and dignity they deserve."

Pluta previously worked for the 2008 Obama campaign as a voter protection coordinator and was appointed to serve as counsel at the Department of Homeland Security before moving to the CFPB in 2010.

A divergence between public and private conduct is part of the culture at the agency, a former staffer told The Washington Times.

"Anybody who asks questions or doesn’t just take orders gets discriminated against," Ali Naraghi, a CFPB bank examiner told the newspaper. "What CFPB does internally to its staff is contrary to all of their objectives and the mission of the agency."

The CFPB, which was established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, is the brainchild of Massachusetts Democratic Sen. Elizabeth Warren. It has remained a source of controversy ever since President Barack Obama acted without congressional approval to appoint Richard Cordray to be the first director.

The bureau has been the focus of congressional investigators since March, when American Banker disclosed rampant allegations of discrimination and retaliation against minority employees.

Citing confidential agency data, American Banker reported in March that 115 official complaints had been filed by CFPB employees with the National Treasury Employees Union (NTEU) since last August 2013 that demonstrated there was a pattern of discrimination and retaliation among bureau managers.

Specifically, the complaints alleged that white employees were disproportionately receiving more favorable performance reviews and that data showed whites were twice as likely in 2013 to receive top marks than their African-American or Hispanic counterparts.

Since the initial allegations were disclosed, the House Financial Services Committee has held three hearings, including testimony from Bureau employees, and on July 30, the Government Accountability Office (GAO) announced it would launch an investigation of its own.

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