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Consumer Financial Protection Bureau Director Richard Cordray pauses while testifying before the Senate Banking, Housing and Urban Affairs Committee hearing on Capitol Hill in Washington, November 12, 2013.     REUTERS/Larry Downing   (UNITED STATES - Tags: POLITICS BUSINESS) - RTX15AU9 Consumer Financial Protection Bureau Director Richard Cordray pauses while testifying before the Senate Banking, Housing and Urban Affairs Committee hearing on Capitol Hill in Washington, November 12, 2013. REUTERS/Larry Downing (UNITED STATES - Tags: POLITICS BUSINESS) - RTX15AU9  

Whistle-blower testifies on discrimination at federal agency

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Chuck Ross
Reporter

A whistle-blower tearfully told Congress Wednesday that the head of a federal agency asked her to “back down” from claims that she experienced discrimination and retaliation.

“On August 7 Director [Richard] Cordray called me at night and told me that I need to tell my attorneys to back down,” testified Angela Martin, an attorney at Consumer Financial Protection Bureau (CFBP) who filed the discrimination and retaliation complaint against the agency. “He was trying to secure me a position in Enforcement.”

“Richard Cordray has said in public discrimination is evil, and we all know that, but at the same time there’s rampant discrimination in the ranks,” said Martin, who criticized what she called the CFPB’s “culture of duplicity.”

Wednesday’s hearing by the House Financial Services Committee was sparked by an American Banker report last month documenting sharp racial disparities in employee evaluations within the ranks of the CFPB.  The federal agency was created under the Dodd-Frank financial reform bill and often handles cases of discrimination against financial consumers.

The American Banker report showed that employee evaluations within the CFPB “show a pattern of ranking white employees distinctly better than minorities in performance reviews used to grant raises and issue bonuses.”

Evaluation records showed that white employees were given 5-star evaluations at twice the rate of black employees.

Besides addressing the report, the committee heard testimony from both Martin and Misty Rauicci, who spent six months investigating discrimination claims at CFPB.

Martin testified that she experienced discrimination and retaliation from a male superior and that she was stripped of a chief counsel role and was demoted.

“I have never seen anything like this,” said Martin, when asked to compare her time at CFPB to previous stint in the Army. Martin also said that one section of the CFPB that had a majority of black staffers was referred to internally as “the plantation.”

The charges against the CFPB are seen as ironic given the agency’s role in handling discrimination against financial consumers. Last year, the agency reached a $98 million settlement with Ally Bank for alleged bias against minority borrowers. (RELATED: Minority staffers given lower scores at federal agency fighting discrimination)

“They were to shield the American consumers from such practices and instead they were committing unfair and deceptive practices against their employees,” testified Raucci. ”I believe that they undermine their own mission.”

Republican members of the committee agreed.

“Of course, the CFPB is unaccountable to its own standards,” stated Illinois Republican Rep. Randy Hultgren.

The CFPB refused to allow two employees — an assistant director of the Office of Equal Opportunity Employment and a director of employee relations — to testify at the hearing.

“The Bureau will not participate in a public hearing about an individual claim involving the sensitive and personal information of employees who did not consent to have that information shared publicly,” said CFPB spokesman Sam Gilford in a statement. Gilford said that the CFPB was willing to take part in a non-public hearing on the issue.

The House committee’s ranking Democrats, California Rep. Maxine Waters and Texas Rep. Al Green, attempted to block the hearing.

“We take exception with the unorthodox manner in which the upcoming hearing was empaneled and organized,” read a letter sent by the Democrats to Texas Republican Rep. Jeb Hensarling, the financial services committee’s chairman.

Committee Republicans criticized the CFPB and Democrats over the attempt.

“Disappointingly, the CFPB has refused to permit these witnesses to testify at the hearing,” wrote Hensarling and North Carolina Republican Rep. Patrick McHenry. “To the extent you believe the CFPB’s decision has resulted in an “abrupt change in the tone and scope of the hearing,” you should direct those concerns to CFPB, not the leadership of this Committee.” (RELATED: Consumer Financial Protection Bureau compared to NSA)

Frustration over the CFPB’s refusal to allow its employees to testify was expressed at Wednesday’s hearing.

“Instead of coming here today, they said ‘we’re not going to show up’,” said Wisconsin Republican Rep. Sean Duffy, calling the CFPB’s reaction to the accusations against it “disappointing.”

“I hope that you now see the value of this testimony,” said Hensarling to committee Democrats.

Republicans have criticized the CFPB since its inception over its lack of congressional oversight. The agency has a single director, Richard Cordray, rather than a board of directors. The agency has also been accused of being overly protective of its methods for investigating financial firms.

Alan Kaplinsky, the chair of the consumer financial services group at Ballard Spahr, called the charges against the CFPB “very embarrassing” for the agency. But he said that the hearing likely will not change how they approach discrimination cases in the finance industry.

“I don’t think the result is that they’re all of a sudden going to become gun-shy when it comes to their practice of very vigorously enforcing fair lending laws if they see it,” Kaplinsky told The Daily Caller News Foundation.

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