By Charles S. Clark
March 10, 2014
The Consumer Financial Protection Bureau, now in its third year of combating discrimination in lending under the “disparate impact” concept, has come under fire by some in the banking industry for its internal performance evaluations.
An investigation using confidential data published March 6 by The American Banker, a trade journal, found that “CFPB managers show a pattern of ranking white employees distinctly better than minorities in performance reviews used to grant raises and issue bonuses. Overall, whites were twice as likely in 2013 to receive the agency’s top grade than were African-American or Hispanic employees, the data shows.”
The report by Rachel Witowski said at least 115 CFPB employees had complained to the National Treasury Employees Union, according to CFPB itself. “Inside the agency, morale is poor and management has been accused in several cases of favoring Caucasian men and of creating a hostile work environment. That’s according to interviews with a dozen current and former staffers across six departments, all of whom requested anonymity over concerns about retaliation,” Witowski wrote.
On Monday, in a Wall Street Journal op/ed based on the report, attorney Ronald L. Rubin wrote that the results are more an indicator of the problems with using measures of the “disparate impact” of policies and practices on women and minorities as a proxy to measure bias than with the agency itself. “While working as a CFPB enforcement attorney in 2011-12, I observed the political correctness that epitomizes the agency,” he wrote. “Workforce diversity was a top priority in hiring some 1,000 employees. Regular meetings of the ‘Culture Club’ provided a forum for workers to air concerns about issues like discrimination.”
Given that, Rubin wrote, “It seems inconceivable that CFPB's management could be discriminating against its workers. But disparate-impact statistics equal discrimination. Or at least that's what the CFPB tells the businesses it regulates.”
Asked to respond to the report, CFPB spokesman Sam Gilford said in an email to Government Executive, “We hold ourselves to the standards of fairness that we expect of the companies and industries we regulate. That’s why the bureau has adopted a robust compliance management approach to ensure our internal policies result in the fair treatment of our employees -- it’s the same approach we recommend to companies in the marketplace. We are fully committed to making sure that our talented and diverse staff [is] treated fairly and with the respect they deserve.”
CFPB had originally detected the racial patterns in employee ratings and shared them with NTEU, Gilford said, adding that a third-party analysis is now underway. “If the ongoing review finds problems, we will be proactive about taking appropriate corrective actions,” Gilford added. “This is our second year using this performance rating system. It was modeled after widely accepted best practices, structured to reflect input by employees across the agency, and approved by the Office of Personnel Management. Employees work collaboratively with their managers to develop their goals, and receive feedback on performance throughout the year before they are rated. Once they receive their rating, there is an appeals process that allows them to advocate for a higher rating. It is important to note that we are still in the middle of the ratings appeal process, and anticipate that the numbers could change after it is completed.”
CFPB’s most recent employee survey, he said, found that CFPB employees are more satisfied with their jobs than their peers across federal government, and overall satisfaction is up from the previous year.
By Charles S. Clark
March 10, 2014