Some of the recent items on the Consumer Financial Protection Bureau’s (CFPB) agenda have involved efforts to eliminate alleged discriminatory disparities amongst auto lenders and in connection with other private companies as well. However, the CFPB itself has been accused of discrimination under its own roof. Specifically, the CFPB is accused of discriminatory pay between minority and non-minority employees.
During a hearing of the House Financial Services Committee at which CFPB Director Richard Cordray testified, Representative Jeb Hensarling of Texas, the chair of the committee, presented a study commissioned by the committee showing that the CFPB pays African-American employees approximately $16,000 less than their white counterparts. Director Cordray responded to the question by explaining that he did not know how the committee conducted its analysis, which Representative Hensarling had explained followed the same disparate-impact framework that the CFPB uses when determining whether private businesses discriminate in their lending practices.
This is not the first time employment discrimination within the CFPB has been raised. The issue first drew the attention of Congress in April 2014. Congress held its fourth hearing on the subject in June 2015. At that hearing, two witnesses testified that the situation had actually grown worse since it had first been brought to Congress’s attention. That hearing involved contentious accusations from Democrats, who accused the Republican majority of simply using the accusations against the CFPB to attack an agency that Republicans dislike. Republicans rejected those accusations, explaining that the committee would be derelict if it did not look into the reports of discrimination and retaliation within a government agency. Republicans pointed out that the CFPB had a higher per capita number of EEOC complaints than other federal agencies but that it did not appear that the CFPB leadership was taking the allegations seriously.
Congress has been investigating this issue for more than two years. It appears that Congress and Chairman Hensarling continue to view the CFPB’s alleged internal discrimination in its employment practices as a significant issue. It is unclear whether there will be a lawsuit filed regarding the alleged discrepancy in pay or whether any specific legislative action is forthcoming. But at the very least, these allegations cast the CFPB in an unflattering light, in which the CFPB is accused of playing by a different set of rules than those it seeks to impose on private entities subject to its jurisdiction around the country.