House GOP: Consumer bureau discrimination probe will continue

House Republicans will continue digging into claims of discrimination at the Consumer Financial Protection Bureau.

Rep. Patrick McHenry (R-N.C.), who chaired Wednesday’s subcommittee hearing, accused a CFPB witness of being evasive and unhelpful, after being subpoenaed to testify by the panel.

In particular, Republicans were incensed that the CFPB employee brought in to testify avowed no knowledge of an outside report completed in September that showed discrimination issues at the bureau.

Liza Strong, the CFPB’s lead of labor and employee relations, said she was unaware of that report from the consulting firm Deloitte until recently, and had not read it yet.

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She said Stuart Ishimaru at the bureau’s office of minority and women inclusion was the proper official to talk to about that report since that branch commissioned it. He was not invited to testify at the hearing.

In a statement, CFPB spokeswoman Jen Howard criticized Republicans for blasting Strong.

“It is disappointing that a well-respected, career public servant, who is both a woman and a minority, was personally attacked about work that she did not conduct," said Howard after the hearing. "Stuart Ishimaru, the assistant director who commissioned the Deloitte report, has repeatedly offered to testify and could have directly answered the subcommittee's questions. They refused to allow him to testify.”

The consumer agency has fallen under a critical spotlight following reports that minorities and women were being systematically discriminated against in employee reviews and elsewhere. Republicans long critical of the bureau argue it shows an agency run amok, while Democrats have been eager to explore discrimination claims at the agency and elsewhere in the government.

In April, a CFPB attorney, Angela Martin, charged the agency was rife with discrimination, and she was just one victim of many.

But in her testimony, Strong said her experience was “not consistent” with Martin’s charges.

Martin told lawmakers that she was discriminated against at the agency, and when she complained about it, she was isolated by managers from the rest of the workforce.

But Strong said that Martin refused to enter into mediation to resolve the dispute and her claims were not corroborated by evidence. Furthermore, two employees who reported to Martin “complained of abuse” and were reassigned, she said. Martin was given a monetary settlement to help resolve the dispute, and the agency “essentially created” new positions for her.

“I feel that the bureau went to great lengths to help Ms. Martin get to a place where she could be happy and productive,” she said.

At that same April hearing, an outside investigator, Misty Raucci, said she found evidence of widespread discrimination when hired by the agency to investigate such claims.

But Strong charged that the probe failed to meet “even minimal standards,” relying heavily on anonymous accounts and failing to allow accused parties an appropriate response time. Raucci is no longer with the firm hired to conduct the report, Defense Investigators Group, and Strong said the group’s president agreed the work was unacceptable.

While Strong sought to defuse fiery claims from an earlier hearing, a CFPB employee who serves as a union representative for workers offered his own critical take Wednesday.

Ben Konop, a CFPB enforcement employee who heads bureau members at the National Treasury Employees Union, said the union was “overwhelmed” by grievances from CFPB employees unhappy with their annual ratings.

Konop charged that managers were much more likely to receive high scores than their employees. Furthermore, most CFPB grievances came from minorities, women, and workers over 40, raising concerns the CFPB’s rating system could discriminate against some types of workers.

When faced with those “troubling disparities,” Konop said CFPB managers refused to consider their criticism and denied the large amount of complaints.

“I think it is an extremely large volume for a relatively small agency,” he said.

However, he did credit the agency with taking a “solid first step” in the last few days.

On Monday, CFPB Director Richard Cordray told agency employees there was a systematic disparity in the way employees were rated. The bureau decided to boost the ratings for all employees who received middling ratings in 2012 and 2013, and is reworking how employees are evaluated by the bureau. In addition, the bureau is also reviewing the status of diversity at the agency, which was created by the Dodd-Frank financial reform law.

Cordray has also said he is willing to discuss the matter before lawmakers when he next testifies before Congress.

The discrimination claims have been met with bipartisan outrage, as members of the House Financial Services Committee unanimously agreed to subpoena CFPB officials to testify on the matter. But Democrats were quick to announce Wednesday that while they welcome a debate on discrimination in the federal government, they will fight any efforts to weaken the CFPB in the process.

Wednesday’s hearing came hours before a separate discussion of 11 different bills from GOP lawmakers that would alter the CFPB’s operations. Republicans have long argued the agency lacks accountability and want to establish more stringent controls on its operations. But agency backers maintain the bills would simply handcuff the agency and make it harder for it to police financial markets.

This post updated at 3:14 pm.