Yesterday, the House Financial Services Committee’s Oversight and Investigations Subcommittee held a third hearing in its series of hearings addressing alleged discrimination at the CFPB. The Subcommittee heard testimony from current and former CFPB employees who described their experiences with discrimination and retaliation at the CFPB. The witnesses testified that Director Cordray’s reluctance to fire managers who had been accused of discrimination and retaliation “emboldened and empowered” other managers to continue to act badly.

In addition to testifying about their own experiences, the witnesses also testified about other CFPB shortcomings. Kevin Williams, a former Quality Monitor in the Office of Consumer Response, testified about the consumer response call center, where he claimed there were “abnormal” numbers of breaches of consumers’ personally identifiable information. He stated that there should have been security measures in place to prevent this from happening.

Ali Naraghi, an examiner in the southeast region of the Division of Supervision, Enforcement and Fair Lending, testified about problems with the CFPB’s bank examination process. He stated that managers were being put in charge of areas as to which they did not have expertise, which caused them to make wrong decisions and led to inefficiencies in the examination process generally. In addition, he testified that examination procedures were like “fishing expeditions,” since examiners were told to expand their sample size if their initial examination did not come up with any violations. Rep. Barr (R-KY) commented that this was not a “fair-minded approach” to enforcing consumer protection law.

Democratic members of the subcommittee pressed the witnesses to explain what they wanted the committee to do. Mr. Naraghi responded that he sought greater internal oversight and accountability, and Mr. Williams responded that the committee should initiate an independent investigation. A statement that the CFPB had changed some of its employment practices since the last hearing led Rep. McHenry to comment that it was clear the CFPB was responding to the committee’s continued scrutiny of this issue, stating, “apparently the agency is listening.”