WASHINGTON — House Democrats decried a hearing Thursday on allegations of discrimination and retaliation by management at the Consumer Financial Protection Bureau, arguing GOP lawmakers were using it as political cover to remove the agency's director and change its structure.
During the House Financial Services oversight subcommittee hearing, Democrats largely declined to ask questions of two agency whistleblowers who testified of a "dysfunctional" civil rights office that has allowed discrimination and retaliation to take place. Instead, they wanted to talk about discrimination virtually anywhere else, touching on banks' lending practices and even, at one point, the Confederate flag.
Rep. Al Green, D-Texas, repeatedly suggested the panel ignore recent stories in American Banker about employees' allegations and instead focus the hearing on a story last year by Bloomberg Newsdiscussing allegations of discrimination by mortgage bankers.
"We're painting a false Picasso," Green said. "We've used American Banker as evidence; I want to use Bloomberg... We've used American Banker for what I would call probable cause for this hearing. I want to use Bloomberg. Here's what Bloomberg says about some serious discrimination, bank discrimination and its debilitating effect on minority entrepreneurs for a recent mystery shopper experiment."
Green said the committee had "not one hearing of serious insidious discrimination in banking, in mortgage lending."
For their part, some Republicans said they were open to hearings about discrimination in the private sector but felt the CFPB should lead by example if it's going to enforce fair lending laws.
"How can an agency that is unable and unwilling to govern itself be entrusted to protect the American people and frankly, make sound decisions about how it pursues its own mission?" asked Rep. Mia Love, R-Utah. "Perhaps most disturbing to me is that despite all the publicity this issue has received and all the previous congressional hearings, overwhelming evidence indicates this culture of discrimination and intimidation within the CFPB has only been growing worse. It's clear to me that reform of the CFPB is badly needed... I believe we need to look at discrimination everywhere; why not start here?"
The hearing quickly unraveled thereafter with occasional shouts and even hisses about which lawmakers were sincere in fighting discrimination versus promoting their party's agenda. The two witnesses — Florine M. Williams, a senior equal employment specialist in the CFPB's office of civil rights, and Robert Cauldwell, an examiner and the agency's local union president — were effectively sidelined at their own hearing.
"We have to take a pause when it appears that the opposite side of the aisle would like to use discrimination in a way to attack the bureau," Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, told the witnesses. "Now that interferes with what may be a legitimate cause you have... Do you think that the majority on the opposite side of the aisle are more concerned about discrimination than this side of the aisle?"
Republicans immediately took issue with Waters' comments, with several trying to interrupt her. That ended with Waters shouting: "You will not interfere with me. I will not yield!"
When asked, both witnesses said they did believe in the mission of the CFPB, but concurred with Republicans that the agency needed a new director.
"It took the agency two years to even have the office of equal employment opportunity" established, said Williams who spent more than 20 years specifically in the EEO offices of federal agencies including the Department of Housing and Urban Development and the U.S. Postal Service. "Even when the office was established the individual who was an agency attorney representing the agency against EEO complaints and against negotiated grievances was made the face of EEO. As long as the behavior continues at the CFPB and as long as the director accepts the behavior I don't see how there will be any change."
Cauldwell said at first he thought Cordray was taking the allegations seriously when he testified on the issue last year before Congress. After revelations that the CFPB was rating white employees higher than black and Hispanic employees, Cordray scrapped the review system and remanded money to most whose pay was affected by their lower rating.
But both Williams and Cauldwell said they no longer believe Cordray is serious about fixing problems.
"I do not" think Cordray takes the allegations seriously, Cauldwell said. "And I don't think he ever will."
The hearing came a week after American Banker reported that the CFPB's EEO complaints for the first half of 2015 have surpassed those of three other bank regulators despite having the fewest employees. EEO complaints at the CFPB nearly tripled to 24 in fiscal year 2014 compared to 9 in 2013.
Rep. Sean Duffy, the subcommittee chairman, told witnesses at the end of the hearing that the CFPB will not make the necessary changes unless Democrats help force it to.
If CFPB employees "wonder why this hasn't stopped, they wonder why the CFPB management feels emboldened to do what they do to you... The way that they can get away with it is because this committee will do everything they can to not focus on this like a laser," Duffy said. "How many questions did you get? I was hoping we were going to have engagement to hear your story and [instead] you hear a lot of back and forth talking about issues at 30,000 feet.
"We're having problems right here at a government agency" and "if you can't get that right at the CFPB, what does that say? What does that say about what we believe as an institution? I'm disappointed that we are trying to talk about everything else."