Tags: CFPB | discrimination | union | employee

House Subcommittee Rakes Muck at CFPB

By    |   Thursday, 10 April 2014 07:51 AM

The House Financial Services Committee's Subcommittee on Oversight and Investigations, chaired by Patrick McHenry, R-N.C., held a hearing April 2 titled "Allegations of Discrimination and Retaliation Within the Consumer Financial Protection Bureau."

Two panels of witnesses were scheduled to testify. The first consisted of Angela Martin, an enforcement attorney from the CFPB, and Misty Raucci, a former investigator for the Defense Investigators Group. The second, a panel of three witnesses invited to represent agency employees, did not appear, and two other CFPB employees also declined invitations to testify.

In his opening statement, McHenry noted that over 100 complaints have been registered with the union and more employees have come forward seeking to tell their stories. He expressed appropriate sympathy for the two years of anguish the complaining witness has endured since she first came forward.

In her statement, Martin told her story of being a former JAG officer and private attorney who first proposed the idea of creating a separate office to look after the consumer issues faced by service members, yet she has not been allowed to do any meaningful work in 400 days at the agency.

The former independent investigator, Raucci, testified that a gentleman named Scott Pluta, the agency's assistant director of the office of consumer response, led a ring of employees of Martin's unit who acted as "facilitators" in a scheme to demote her and that some of the people involved stood to benefit from the demotion. Further, the action did not follow the CFPB's own equal employment opportunity rules. She found the environment in Martin's unit to be "one of exclusion, retaliation, discrimination, nepotism, demoralization, devaluation and other offensive working conditions, which constitute a toxic workplace for many of its employees."

It is well-known that congressional Republicans don't like the CFPB. They fought its creation as part of the Dodd-Frank Act of 2010 with the somewhat spurious argument that the mainline financial regulators should and would perform the consumer protection function when they had manifestly failed to do so. They fought the confirmation of Richard Cordray, former Attorney General of Ohio, but he was first installed based on a dubious recess appointment, then finally confirmed.

The CFPB has distinguished itself by meeting all of its deadlines for adopting the regulations required under Dodd-Frank, but the agency has been dogged by turnover, evidently some infighting and now these charges, first reported in the American Banker, which look, on the surface at least, like a gift to the opponents, as the agency stands accused of conduct that is, at the very least, politically incorrect, "sharp racial disparities" in evaluations of minority versus white employees that affect the determination of raises and bonuses, and there are further allegations of retaliation.

Maxine Waters, D-Calif., one of the leading supporters of the CFPB, supported the investigation and called for further hearings, thus avoiding the potential embarrassment of a partisan confrontation. She affirmed that her only interest is to seek solutions and not to score any partisan political points. (It is difficult to imagine what partisan gain would be available to Democrats from this circumstance as long as Republicans conduct themselves in a manner that does not overtly seek to sensationalize or exploit the case. It's pretty amazing that the administration would choose to engage in a protracted conflict with a former JAG officer within an agency it created for the avowed purpose of helping consumers.)

This looks like a "man bites dog" story, and one would expect the CFPB, with some help from administration counsel, to be able to figure out a way to contain the damage. It is even a bit ironic that a Democratic agency created and appointed under a Democratic administration would even find the need to form a union except for appearance's sake, but this appears to have developed into a genuinely adversarial relationship.

(Archived video, the staff memorandum and witness testimony can be found here.)

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The House Financial Services Committee's Subcommittee on Oversight and Investigations, chaired by Patrick McHenry, R-N.C., held a hearing April 2 titled "Allegations of Discrimination and Retaliation Within the Consumer Financial Protection Bureau."
CFPB, discrimination, union, employee
Thursday, 10 April 2014 07:51 AM
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