When everybody’s gunning for you, the last thing you want to do is walk around handing out ammunition. But in recent days, the Consumer Financial Protection Bureau has been doing just that.
The young agency, with a mandate to clean up the financial services industry by eliminating practices that take advantage of consumers was stung last week by a pair of embarrassing reports in the media.
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The first, the trade publication American Banker dug into the agency’s internal employee review documents and found that an African American working at CFPB is only half as likely as a white employee to receive the agency’s top ranking. The employee reviews are used to make decisions about bonus payments, among other things.
The second came from the right-leaning Washington Examiner newspaper, which reported that the agency was poised to pay a prominent fundraiser for President Obama $22.3 million to rent temporary office space while its permanent headquarters is renovated.
The news spurred the agency’s highest-profile foe, House Financial Services Committee Chairman Jeb Hensarling (R-TX) to note on his website calling CFPB “a troubled agency that has lost credibility.”
On February 28, Hensarling was one of the most vocal supporters of a bill to restructure the CFPB, which passed the House of Representatives 232-182 with the full support of the Republican conference as well as 10 Democrats. In a speech prior to the vote, he complained in particular about the agency’s new rule restricting banks’ ability to offer certain kinds of mortgages.
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“Consumers, yes, they have to be protected from Wall Street, but they have to be protected from Washington as well,” he said. “You do not protect consumers by having unelected, unaccountable bureaucrats in Washington whose average salary is over $175,000 — salary and benefits — to somehow say: I am from Washington. I am smarter than you. I will decide whether or not you get a mortgage. It is arrogant; it is unfair; it is abusive. It must stop.”
This week’s revelations will, if possible, only strengthen Hensarling’s hand when it comes to attacking the new agency.
The American Banker report discovered that in the agency’s job performance evaluations, 21 percent of white employees received a top rating of “five stars,” while only 11 percent of African Americans did. Whites also received a “four star” rating at higher rates than African Americans, at 54 percent compared to 47 percent.
A spokesman for the CFPB told the newspaper, "The CFPB is committed to fairness and equity in the workplace as well as the marketplace," Gilford said. "Just as we often remind lenders that strong compliance management systems are critical to ensure compliance with consumer protection laws, the bureau has taken a compliance management approach in monitoring and evaluating its own performance rating process."
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The Washington Examiner report on the building’s temporary office space revealed that the offices the agency is expected to occupy for the two years it takes to renovate its permanent space near the White House would cost $22.3 million. The building where the temporary offices are located, the Examiner reported, is owned by Obama campaign bundler Neil G. Bluhm.
The agency has already come under fire for the $145 million price tag related to the refurbishment of the building it will occupy on a permanent basis. The original estimate has been $55 million.
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