Fed OIG’s Report on Alleged Discrimination Within CFPB Made Public

The Federal Reserve Inspector General made his findings of the investigation of discrimination in the Consumer Financial Protection Bureau (CFPB) public Monday, stating the CFPB has made progress in combatting discrimination, but still was work to do. Last week, legislation was introduced to replace the director of CFPB with a five-person committee to combat the alleged overreach of the Bureau, according to House Financial Services Committee (HFSC) Chairman Jeb Hensarling (R-Texas).

Allegations of workplace discrimination within the CFPB arose in 2013 when documents were leaked by employees to the media. Employees alleged they were givin unfair evaluations based on gender, race, and age, not job performance. Head of the CFPB Rirchard Cordray admitted the employee evaluation system used in 2012 and 2013 was unfair and launched his own internal report last year. Cordray’s report found black and Hispanic workers, those over age 40, those outside Washington, D.C., and those in the union were more likely to get bad performance evaluations under the system, which worsened their pay and career advancement prospects.

The inspector general’s review found that in three of the CFPB’s six divisions in fiscal year 2012, white employees received higher performance ratings than their black colleagues, and the same was true in two of the six divisions when it came to Hispanic co-workers. The report released Monday found that the CFPB’s policies for promoting diversity and inclusion within its workforce fell short of what was necessary to achieve the goals set at the end of fiscal year 2013.

While the inspector general’s own review and the review of an outside consulting firm found there was a “statistically significant” discrepancy, there was no evidence of an intentional policy to target nonwhite, non-male employees, according to the report.

“The results of the external consulting firm’s analysis of the CFPB’s fiscal year 2012 and fiscal year 2013 performance ratings indicated statistically significant disparities among CFPB employees across certain demographic groups. However, these statistically significant differences do not necessarily indicate discrimination and could be due to a wide variety of explanations, such as actual differences in employee performance,” the report said.

HSFC Committee Chairman Hensarling said the report findings show the CFPB "is a very troubled bureaucracy" whose managers "seem to have a real problem when it comes to how they treat minority employees.”

"Each day, it becomes more apparent that the CFPB is an unaccountable Washington bureaucracy in need of real reforms," Texas GOP Rep. Jeb Hensarling said in a statement.

The CFPB has since scrapped the old evaluation system and said it has taken steps to improve diversity within their organization.

”The CFPB appreciates the OIG’s affirmation of diversity and inclusion efforts as critical to the overall development and performance of an organization. The CFPB concurs with the OIG’s recommendations regarding additional policies and enhancements to the Bureau’s diversity and inclusion efforts, and has already made significant progress in addressing the recommendations since the close of the evaluation period in October 2014,” the CFPB said in a statement in the report.