Perceptions of Discrimination Still Prevalent at New Financial Regulatory Agency

CFPB has taken steps to improve, but report finds it has not solved all its issues yet.

More than two years after the Consumer Financial Protection Bureau made headlines for alleged biases against minority and female employees, a new audit has found the young agency still has outstanding issues on diversity and inclusion.

While CFPB has taken a series of actions to rectify widespread complaints of discrimination at the nearly five-year-old agency, the Government Accountability Office through a survey of employees, reviews of existing data, and documents and interviews with employees found perceptions of mistreatment are ongoing at the agency. The dissatisfaction was more prevalent among black and female workers, GAO found.

While eight in 10 employees overall are enthusiastic about their work and held positive views of their supervisors, one in three said that success at CFPB is based on favoritism rather than merit. More than one in four expressed perceptions of unfair treatment, as well as feelings they could not report concerns without negative consequences.

Black employees were three times more likely than their white counterparts to express dissatisfaction with how differences among employees are valued. Women also expressed higher levels of unhappiness on questions relating to diversity. The most recent Federal Employee Viewpoint Survey also showed larger general dissatisfaction figures at the agency among black employees. Nearly one in five respondents to the GAO survey said they had personally felt discriminated against (that number jumped to 27 percent among black employees), while one-third disagreed that all employees are held accountable for their actions.

Protect American Consumers, a “dark money” group that has taken to the airwaves to hammer CFPB for its regulatory agenda and the accusations of discrimination in its workforce, said the GAO report showed what has “long been known” about the agency.

“The agency is a haven for discrimination and is rife with poor employee morale,” said Steve Gates, the group’s spokesman. “Congress must act now to increase accountability on the CFPB in order to ensure the agency is allowed to get back to its core mission: protecting America’s consumers.”

GAO cited the rapid rate at which CFPB was stood up as partly responsible for its failure to address all diversity issues.

“CFPB faced competing priorities related to meeting challenging statutory deadlines and devoting time and resources to building its organizational culture and providing staff development for its growing employee population,” the auditors wrote.

The agency has taken several steps, including creating an Office of Minority and Women Inclusion and an internal Equal Employment Opportunity office. OMWI held 48 “listening sessions” in 2014 to hear concerns and come up with solutions. CFPB has launched diversity training and distributed guidance to managers to mitigate biases in hiring. In 2014, in consultation with the National Treasury Employees Union, the agency moved to a two-tier, pass-fail performance management structure after the original system was found to be systemically biased against minority workers.

GAO found, however, CFPB was doing little to document the progress it has made in implementing its new initiatives. Without data to measure its progress, the auditors said, the agency cannot be sure if the situation is improving.

Better reporting would allow CFPB to “pinpoint performance shortfalls and gaps and suggest midcourse corrections,” GAO said. “Furthermore, providing transparency around results and processes used to achieve results can help an organization to build the employee enthusiasm and momentum needed to help ensure that change management initiatives are successful.”

Additionally, while CFPB has established a grievance process with NTEU, it has not made all options clear to the workforce. More than 70 percent of employees who filed a grievance of some kind said management never tried to informally resolve their issues. GAO said the agency is also failing to collect feedback on the grievance process.

“While CFPB has made progress in strengthening its management of complaint processes,” GAO said, “employee views collected through our survey and interviews suggest that many employees with experience with CFPB’s complaint processes lack confidence and trust in CFPB’s management of these processes.”

Tony Reardon, NTEU's president, said CFPB has a ways to go to fix its personnel issues. 

"Since NTEU began representing CFPB employees in 2013, we have raised employee concerns about disparate treatment and other workplace issues through the collective bargaining and the grievance process," Reardon said. "Our work continues but NTEU has made a meaningful difference in the working lives of CFPB employees and we will continue to seek improvements so they can focus on their important mission of protecting American consumers." 

CFPB agreed with GAO’s recommendations to collect and report more information on its programs to boost diversity, inclusion and fairness, but said its internal surveys showed better numbers and favorable trends. GAO noted the questions were different and therefore could not be compared to the data the auditors collected.

The agency recently came under fire for spending $15.3 million in fiscal 2016 on ads to promote its tools for consumers, more than nearly all other agencies.