One of the more egregious examples of President Trump’s attempt to dismantle parts of the federal government has been the ax taken to the Consumer Financial Protection Bureau (CFPB).
Consumer protection in the financial services industry has been seriously eroded by a major drop in enforcement actions and staffing. Republicans in Congress have hated the Elizabeth Warren-inspired agency even before she became a Democratic senator from Massachusetts. Now Trump is draining its energy.
But there’s a new Congress in town, at least the House half. House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) is using her perch to oversee the agency and she wants employees to help.
In a letter to bureau employees, Waters encouraged them in pursuing the agency’s mission, despite the hostile political environment. “I am writing to reassure you of the importance and value of your work, and to let you know, in no uncertain terms, that the anti-consumer actions mandated by Trump appointees will not be tolerated,” said the letter released Friday night. “I will work hard to ensure that you will once again be fully empowered to perform your duties on behalf of America’s consumers.”
Saying that Congress intended for CFPB to be a “watchdog that could swiftly and effectively crack down on unscrupulous financial practices and products,” she encouraged staff members to be watchdogs within the agency. “If, in the course of your work, you are a witness to waste, fraud, abuse or gross mismanagement, please do not hesitate to alert me and my staff.”
To ensure her invitation was not overlooked, the news release with the letter included two links to a form for whistleblowers to report “unlawful activity, mismanagement, waste of funds, or abuse of authority.”
Whistleblowers are protected by federal law, but Stephen M. Kohn, executive director of the National Whistleblower Center, said “given the problems with federal whistleblower protection, we recommend that any whistleblower approaching Congress ensure that they can maintain anonymity."
Waters has good reason to be concerned about the bureau’s workforce. Her letter, addressed to “Dedicated Public Servants,” began with her concern about plummeting morale at the agency and lamented that “your work of protecting America’s consumers” has been “challenged or undermined.”
The consumer bureau’s 2018 employee engagement score fell 25.2 points from the previous year in the Best Places to Work in the Federal Government report, released by the Partnership for Public Service and the Boston Consulting Group in December. The fall was the second steepest in all federal agencies. A graph tracking the agency’s workforce engagement scores moved steadily upward until last year, when it nose-dived. In just one year, CFPB dropped from seventh to 26th place, out of 27 midsize agencies.
Turning that around should be a top priority for Kathy Kraninger, who took over as CFPB director in December. Poor employee engagement “will fundamentally undercut the ability of the agency” to perform its mission however that is defined, said Max Stier, the partnership’s president and chief executive.
Agency’s public affairs officials did not respond to requests for comment.
Even with the current difficulties, bureau employees are dedicated to the agency’s mission and take pride in its accomplishments. But “there are numerous challenges CFPB management has created that are negatively impacting employees and our ability to effectively deliver services, including the gutting of the Fair Lending Division, which has lost a third of its staff and experienced a deep decrease in enforcement actions,” Gail Wisely, president of National Treasury Employees Union Chapter 335, covering the CFPB, told the Federal Insider. “In the last year, we suffered from a 10.8 percent attrition rate and are unable to back fill those positions due to a 16-month-long hiring freeze that is ongoing.”
The Washington Post demonstrated in December how Republican loathing for the agency turned into policy under Mick Mulvaney, Trump’s acting chief of staff who until recently was CFPB acting director. “Publicly announced enforcement actions by the bureau have dropped about 75 percent from average in recent years, while consumer complaints have risen to new highs,” The Post reported.
At the same time, tensions rose between civil servants and political appointees over complaints of laborious “make-work” memos ordered to justify cases and micromanagement. Mulvaney also threatened leak investigations targeting employees “interested in undermining my leadership here, or in quite simply just trying to make me look bad,” according to an April email to staff The Post uncovered. His plan to unravel the Office of Fair Lending and Equal Opportunity and fold its operations into an administrative office sent “shock waves through the bureau’s corridors,” the story said.
The Post also reported in September that employees were shocked when a political appointee, Eric Blankenstein, was placed in charge of enforcing federal financial discrimination laws. He once said “hate-crime hoaxes are about three times as prevalent as actual hate crimes” and questioned whether the n-word is racist.
National NTEU President Tony Reardon welcomed Waters’s letter and praised her for recognizing “the importance of this agency in protecting consumers in their everyday financial transactions.
“It is no secret that this agency has been under attack for far too long with threats to its funding, reorganizations that limit its enforcement efforts and questions about its very future,” Reardon added. “CFPB's singular focus on making financial transactions honest and transparent is not a threat to the economy but an asset, and Congress and the administration should treat it as such.”