Posted October 5, 2014 by Chris Warren in Prepaid Cards

Consumer Financial Protection Bureau Under Fire For Mismanagement, Discrimination

When it was first established as part of the sweeping Dodd-Frank bill in 2010 the Consumer Financial Protection Bureau (CFPB) was envisioned as something of a white knight – a good guy with some muscle that could help protect American consumers from too powerful Wall Street bankers. But if recent allegations by CFPB employees that have been aired by congressional investigators and in an in-depth story in The Washington Times are true, many of the agency’s own workers need protection themselves.

Among the charges included in The Washington Times story about disgruntled Consumer Financial Protection Bureau workers include those of Ali Naraghi, a bank examiner with the CFPB who claims that he was called a “f’ing foreigner” by superiors when he questioned the methodology used to assess financial institutions. Naraghi, who filed a complaint about his treatment by CFPB supervisors and testified before congress, formerly worked at the Federal Reserve, where he received glowing reviews for his performance. By contrast, Naraghi has received the lowest performance rating possible from his bosses at the CFPB since he joined the agency in 2011, a fact he attributes to his raising concerns about what he considered the lack of objectivity in the CFPB’s methodology.

Other allegations about how the CFPB is run are equally troubling. The Washington Times reports that dozens of agency employees have complained that managers run their departments like “fiefdoms.” “The bureau’s lack of accountability is enabling managers to create their own mini-fiefdoms, stock the ranks of inexperienced and unqualified friends and retaliate against anybody who disagrees with their agenda,” reads the story, written by reporter Kelly Riddell.

Citing internal agency documents, the newspaper also reports that white employees at the CFPB were twice as likely to receive the highest employee rating than black or Hispanic employees. According to Angela Martin, a CFPB enforcement attorney, there is a division of the CFPB referred to as “The Plantation.” “There is an entire section in Consumer Response Intake that is 100 percent African-Americans, even the contractors, and it’s called “The Plantation.” And people tell me it’s very hard to leave The Plantation. You must be extremely savvy, or you must [have] somebody else [help you] to get out,” Martin testified to congress last spring.

For its part, the CFPB says it is working with the union representing its employees to address employee complaints and what are alleged to be systemic problems. At the same time, a CFPB spokesperson told The Washington Times that, on average, a survey of employees shows that the agency’s workers are more satisfied with their managers than federal employees as a whole. According to the survey, nearly 75 percent of employees said they had a high level of respect for the agency’s senior leaders, compared to 54 percent of employees across the entire federal government.

Chris Warren