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It's Bigger Than the FDIC: Consumer Financial Protection Bureau Beset With Discrimination Charges

AP Photo/Jacquelyn Martin

Some days, it seems every new hour brings some fresh outrage.

On Monday, we brought you the news of the drunken frat-boy behavior of some staffers at the Federal Deposit Insurance Corporation (FDIC.) Now, an interested reader informs us that not only has the FDIC retained an independent firm to investigate all of the shameful allegations, but that the practices of mistreating government employees may be far more widespread in the federal bureaucracy than we may have thought. 

First, the FDIC's actions: They are, it would seem, trying to get to the bottom of this issue.

In a three-minute video to staff reviewed by the Journal, Chairman Martin Gruenberg said the article “raises some serious allegations about the FDIC workplace” and said the firm would contact employees to solicit their confidential input. He didn’t specify which firm the agency had hired.

“I encourage you to participate in this process,” he said. “To the extent the assessment identifies further actions we can take to strengthen our agency, we won’t hesitate to implement them.”

He said harassment and discrimination are “completely unacceptable” and said the agency doesn’t tolerate or “turn a blind eye” to it.

The FDIC said the agency had hired the law firm BakerHostetler.

This is what we in the sane world would call "a good start." The FDIC's leadership is making all the right noises, but what remains to be seen is if anyone faces any serious consequences from it; although the FDIC's Vice Chairman and one of the Directors released a sternly worded statement. Sternly worded statements, as we have seen, have a history of being... sternly worded.

That will all play out in due time, and we here at RedState will be sure to keep an eye on it. But in the meantime, let's cast our optics on the Consumer Financial Protection Bureau (CFPB,) the brainchild of 1/1024 Native American Senator Elizabeth Warren (D-MA.) This organization, an independent agency of the federal government, is likewise beset with accusations, but in this case, they are being accused of racial discrimination; and, while charges of this kind are frequently tossed around too casually, in this case, they appear to have some weight. In 2021, the story broke at Politico:

Rohit Chopra, President Joe Biden’s nominee to lead the Consumer Financial Protection Bureau, told lawmakers last month that racial inequality is “reinforced and exacerbated” by workplace racism. Now, complaints of pay discrimination may be one of the first big challenges he addresses at his own agency.

According to the CFPB’s union, Black employees last year were paid a median $20,000 less than white employees. Base pay was lower for employees of color even when job type and experience were the same, the union said in a pay study it conducted in the fall.

The problem has plagued the CFPB since its creation under former President Barack Obama, even as its management ranks have become more diverse than other federal agencies. The National Treasury Employees Union, which represents the agency’s workers, is now pressing Chopra to make fixing the salary disparities a top priority.

I won't come right out and say that Mr. Chopra's being a Biden appointee means anything one way or another, of course. In fact, it's not really relevant, as these accusations against the CFPB go back almost a decade, with one former staffer in 2014 claiming the CFPB was run like "a plantation," while another former staffer in that year claimed the Bureau left behind a "trail of victims:"

Angela Martin, a lawyer in CFPB’s enforcement division, told a House Financial Services Subcommittee that there are a “trail of victims” at the agency who are afraid to speak out publicly. 

“Unfortunately, there is a pervasive culture of retaliation and intimidation that silences employees and chills the workforce from exposing wrongdoing,” she said. 

In September, the CFPB agreed to a $6 million settlement to resolve a suit brought by black and Hispanic employees. That's a healthy settlement, although it's unclear how much goes to the actual plaintiffs and how much to the attorneys who worked the case.

Even so, a "pervasive culture of retaliation and intimidation?" How has it taken almost a decade for a legal action to work through to a settlement on this? 

While this is a great argument for absolutely gutting the federal bureaucracy, that's a topic for another story. Instead, let's just ask this: Why do these kinds of things keep happening? It's not just at the federal level, of course. Does it happen because, shouting from the usual suspects aside, there usually aren't any real consequences for it? In the private sector, people are quickly fired over this, and even in some areas of government, like the military, any hint of sexual impropriety can ruin a career; or at least, it did when I was wearing Uncle Sam's colors back in the '80s and early '90s.

But bureaucrats seem to work on another level, for reasons that are uncertain. It's another illustration of how power corrupts. But sometimes, it is too obvious; in this case, heads should roll, and that is apparently the intention at FDIC and CFPB.

Here's the thing: If you view this and similar issues from the 30,000-foot level, there are two ways people view not only the law but also the general rules of good behavior. Some people understand that things like sexual harassment, racial discrimination in the workplace, and so on, are illegal because they are wrong. Those people don’t obey the law for fear of punishment; they behave the way they do because it’s the right way to behave. Then there are people who believe that things like sexual harassment, racial discrimination in the workplace, and so on are wrong because they are illegal, and all too often, people like that will attempt something if they think they can get away with it because they don’t see the act as wrong in and of itself.

Is that the case here? It's difficult to know; I can't read minds, and neither can anyone else. But we have the evidence of the behavior of what seems to be an ever-increasing number of bureaucrats who are acting like either drunken frat boys or racist jerks, and that's telling in and of itself. The only conclusion one can draw from all this is that these people, at some level, inexplicably, thought they would get away with it.

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