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Discrimnatory pay accusations against CFPB reflective of trend, group says

By Sean Fowler | May 17, 2016

WASHINGTON (Legal Newsline) – As the Consumer Financial Protection Bureau faces allegations of unequal pay for its minority employees, a national committee that monitors such cases says the CFPB needs to look hard at its practices before the situation gets worse.

"Any employer charged with bias in paying wages should take the charge seriously and examine its practices, and I would expect CFPB to do this," Michele Leber, chair of the National Committee on Pay Equity, told Legal Newsline

"Litigation is expensive and lengthy and should be a last resort."

The agency is currently looking into allegations of discriminatory practices by auto lenders and other private financial services companies, but a recent hearing of the House Financial Services Committee in which CFPB Director Richard Cordray was asked to testify included a study done by the committee showing African-American employees are paid about $16,000 less than white employees.

When Cordray asked what methodology was used for the study, he was told that it uses the exact same framework the CFPB itself uses when it studies private businesses for discrimination.

Leber said that the bureau, which was created in 2010 as a response to the 2007 financial crisis, is too young to already be facing such issues. 

 "In general, CFPB, as a relatively new government agency, should not have the problems other employers might have: a historical bias in the wage structure or nontransparent salary structure," said Leber, who pointed out she was speaking generally and was unfamiliar with the specifics of the CFPB situation. 

Having first been brought to Congress' attention in April 2014, there have already been four hearings on the issue -- and in June 2015 two witnesses testified the situation is actually getting worse.

 This has been a party-line issue, with Democrats saying Republicans are only leaping on the organization because of their dislike of the CFPB, and Republicans responding that it's the duty of the Financial Services Committee to investigate these sorts of allegations, especially since the number indicates they aren't being taken seriously.

Leber pointed out that, if the allegations are true, they may not be cases of specific discrimination by the CFPB, but exercises of some of the general discriminatory ideas seen in many workplaces. 

 "If there are inequities, I would think they would stem from salary negotiation (less likely, probably, to be done by women or persons of color) and/or paying based on previous salaries (likely to be lower for women or persons of color)," she said.

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