WASHINGTON (Legal Newsline) - A federal agency that often pursues discrimination claims against businesses will pay $6 million to resolve a class action lawsuit that alleges minority and female employees are treated worse than white males.
The Consumer Financial Protection Bureau pursues discriminatory lending practices but found itself in legal trouble when a class action was filed against it in 2018. The case documents the problems female, Hispanic and/or Black employees have encountered there.
It cited 2014 testimony from Angela Martin, an attorney at the CFPB, about a "culture of retaliation and intimidation that silences employees from exposing wrongdoing."
"She also testified that 'the white males in power' at Consumer Response give themselves the highest performance evaluation ratings, ensuring for themselves the top raises and bonuses," the suit says.
"Meanwhile, minority employees make up what is called 'the plantation.' They do the work of the Bureau but receive lower performance ratings and fall farther behind in compensation, creating a racial pay gap that continues to widen."
The CFPB was created during the Obama Administration and has been the subject of complaints from businesses arguing it is too zealous and others who noted its head seemed to answer to no one.
Meanwhile, about 85 of its employees were apparently fighting their own war. Information from the complaint noted pay discrepancies between white and Black staffers from 2011-16, with whites making about $15,000 more per year.
One plaintiff "was assigned complex investigations that took longer to close, while less complex investigations that required little time to complete were given to whites and male employees," though that wasn't reflected in her pay and performance reviews, the suit says.
"The Bureau also improperly denied (Carzanna) Jones promotions and transfers to other positions. For example, although she met the requirements for a 'Career Ladder' promotion, the Bureau refused to promote Jones."
U.S. District Judge Beryl Howell, in Washington, D.C., approved the settlement terms on Jan. 18. They include $1.5 million for attorneys at Stowell & Friedman, plus Justin Leinenweber.
The CFPB admitted no wrongdoing and recently updated its pay structures, notes a blog post by Elliot Johnson of Ballard Spahr.
"We view as ironic that the CFPB, which has been vigorously, and sometimes zealously enforcing fair lending laws, would be sued for employee discrimination and pay out $6 million in damages and $1.5 million in attorneys fees," it says.
"The optics are not very pleasant."
The Southwest Public Policy Institute issued a press release condemning the CFPB's practices and mentioning the agency's recent data breach that gave up information on 250,000 consumers.
"I have to ask: on what basis should consumers be placing their trust in the CFPB to look after their interests?" said SPPI president Patrick Brenner.
"“If these are supposed to be our ‘watchdogs,’ then who is watching the watchdogs? All we have seen from the CFPB since their inception is hypocrisy, ineptitude, and, frankly, corruption. The CFPB is so broken down to its very foundation that we shouldn’t be talking about reforming it: it’s time to talk about doing away with it all together.”