Employee blasts CFPB as hostile environment

An attorney at the Consumer Financial Protection Bureau (CFPB) on Wednesday accused managers at the watchdog of engaging in widespread discrimination and retaliation.

Angela Martin, a senior enforcement attorney at the bureau, told lawmakers at the House Financial Services Committee that she was discriminated against by managers. When she complained, she said, she was punished by being isolated from the workforce and stripped of responsibility.

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“I never received a fair shake at the bureau, and I have not been assigned one case or enforcement matter during my entire tenure,” she said.

Martin, who has been with the CFPB since 2011, emphasized that her experience at the agency was not unique. There were dozens of other CFPB employees who have felt mistreated, and many are afraid to speak out for fear of reprisal, she said.

“When you look at me, you must see dozens and scores of people behind me,” she said. “It is tragic.”

Martin made a series of serious allegations against the regulator, saying that several employees have come to her since she went public with her difficulties.

Among her claims, she said one CFPB employee had been diagnosed with post-traumatic stress disorder due to a hostile work environment, and another immigrant employee was referred to as an “f-ing foreigner” at a meeting.

Misty Raucci, a former investigator with Defense Investigators Group who examined CFPB issues at the request of the bureau, criticized managers for creating an intolerable workplace.

The environment at Martin’s branch at the CFPB was “one of exclusion, retaliation, discrimination, nepotism, demoralization, devaluation, and other offensive working conditions which constitute a toxic workplace for many of its employees,” she said.

In a statement, CFPB Director Richard Cordray said he took seriously Martin's claims and "deeply apologize to any member of the CFPB staff who feels that they have not been heard or treated fairly." He also said he would welcome the chance to discuss the matter with Congress.

Bureau officials had been invited to testify at Wednesday's hearing but declined to do so, citing an internal examination into the matter. The bureau has criticized the methods and findings of Raucci's report.

And the manager at the center of the conflict, Scott Pluta, said Martin's claims were "unrepresentative" of life at the CFPB. Pluta is the CFPB's assistant director at the office for consumer response.

"Due to Ms. Martin's privacy rights in an ongoing investigation, I am ethically and legally unable to make public the documents that would vindicate my actions," he said in a statement. "And despite the fact that my privacy rights and those of my staff have been so grossly trampled upon, I remain confident in the process and the Bureau."

The accusations of employee mistreatment opened a new front in a long-running fight between the political parties over the CFPB.

Republicans have long been critical of the CFPB and used Wednesday’s hearing to bolster their argument that the agency lacks accountability and, in particular, congressional oversight. One day before the hearing, the budget proposal from Rep. Paul Ryan (R-Wis.) again called for the CFPB’s budget to be set by appropriators.

“These allegations of discrimination and retaliation at the CFPB underscore the need for congressional oversight,” said Rep. Patrick McHenry (R-N.C.), who chaired the subcommittee hearing. “They’re also deeply disturbing to the public at large.”

Several Democrats noted that Wednesday’s hearing was particularly complicated terrain. McHenry said he would consider “compelling” the CFPB to testify on the matter.

Cordray is expected to deliver regularly scheduled testimony before the panel in the coming weeks, where the matter will likely come up again.

But for now, lawmakers only heard from Martin and Raucci. Several days before the hearing, top panel Democrats asked Republicans to cancel it, noting the narrowed focus that had emerged and saying the hearing was organized in a partisan fashion.

On Wednesday, Rep. Maxine Waters (D-Calif.) called for a full committee hearing on issues at the CFPB with appearances from top management, including Cordray. Democrats have also called on the inspectors general at all financial regulators to review personnel policies for potential problems related to discrimination.

In her testimony, Martin said women and minorities were singled out at the agency, deprived of training opportunities, suffered pay discrepancies with white male colleagues, and were passed over for promotions.

Martin said she lost the ability to oversee her subordinates one day after filing a formal complaint, but at least one of those employees requested removal from her oversight, citing adverse work conditions. The branch where Martin worked also received the highest employee satisfaction ratings within the bureau.

The CFPB’s handling of personnel came into question after American Banker reported that white workers at the bureau were systematically rated more highly than their minority counterparts and that workers suffered poor morale at the bureau.

Martin said that she was a staunch advocate for the CFPB as a whole, saying it would be a “tragedy” if it were weakened. Rather, she said she came forward with her grievances in an effort to address the wrongdoing and improve the agency, which was created as part of the Dodd-Frank financial reform law.

“It is not against the bureau; the bureau will be stronger because of this,” she said.

She also offered praise for Cordray, who she described as “very approachable and kind.”