Consumer Finance Bureau Accused of Giving Higher Rankings to White Employees

Wednesday, March 12, 2014
President Obama and CFPB director Richard Cordray (photo: Manuel Balce Ceneta, AP)

One of the Consumer Financial Protection Bureau’s (CFPB) key duties is to ensure that banks don’t discriminate in their lending when it comes to customers’ ethnicity. But the agency appears to have its own problem with favoring white employees over African-American, Hispanic, and Asian ones when it comes to job evaluations.

 

In rating the performances of CFPB workers (using a scale of 1 to 5), management has clearly given a greater number of higher marks to whites than minorities, according to American Banker, which obtained internal data from the agency.

 

The percentage of whites receiving ratings of 4 or 5 was 75%, while the rate for Asians as well as Hispanics was 65%, and for African-Americans it was 58%.

 

Among those receiving the highest rating (5), 21% were white, 11% were African-American, and 9% were Hispanic. Members of the top one-fifth of that highest-rated group, who are white, were referred to as “role models.”

 

Minorities only seemed to compile larger percentages with the lower scores.

 

For instance, a 3 was given to 42% of African-Americans, 35% of both Asians and Hispanics, and 24% of Caucasians.

 

“The statistics themselves do not prove that CFPB managers are discriminating intentionally against minority employees,” wrote American Banker’s Rachel Witkowski. “Yet they do indicate that racial disparities can be just as easily identified within the CFPB’s ranks as among the lenders the bureau regulates.”

 

“If we’re telling banks to own it [statistical evidence of racial bias], then why don't we own things too?” one agency employee remarked, according to Witkowski.

 

Notably, in terms of its personnel make-up, CFPB is one of the more diverse federal regulators. About 47% of its staff is comprised of women, and 34% identify themselves as minorities.

 

American Banker also reported that the agency suffers from poor morale, and that some managers have been accused of creating a hostile work environment. Even employees who claim to be treated well report that their co-workers have been given too much to do too quickly, and have suffered from burnout.

 

Furthermore, workers have filed 115 official grievances with the National Treasury Employees Union in just the last seven months. The total number of complaints increases to more than 200 if you include those that haven’t moved through the system yet.

 

“My manager has embarrassed me in front of team meetings and often talks condescending to staff,” one current CFPB employee who spoke on condition of anonymity told American Banker. “I’m sure even more people have considered filing complaints but are scared of what could happen.”

 

CFPB spokesman Sam Gilford said the agency takes “corrective actions” when problems surface. “We hold ourselves to the standards of fairness that we expect of our regulated entities,” he told American Banker.

 

“The main truth about the agency is there is something very wrong going on because management simply cannot have this many complaints so early” in the existence of such a young organization, Swick and Shapiro attorney David H. Shapiro responded with regard to the agency that came to being in 2011.

 

“The level of hypocrisy at this agency is shocking,” another CFPB employee said. “If it was a lender and had similar statistics, it would be written up, immediately referred to the Justice Department, sued and publicly shamed.”

- Danny Biederman, Noel Brinkerhoff

 

To Learn More:

CFPB Staff Evaluations Show Sharp Racial Disparities (by Rachel Witkowski, American Banker)

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