American Banker magazine reported on March 6 that the CFPB's employee performance-review process is plagued by exactly the kind of disparate-impact statistics that the agency uses to prove discrimination in the industries it regulates. For example, according to confidential CFPB data obtained by the magazine, 20.7% of the agency's white employees received the highest performance rating compared with 10.5% of African-American employees and 9.1% of Hispanic employees. The reviews are taken into account for pay raises and bonuses.One would hope that the principle of "by one's standard of measure, it will be measured" would apply here, since the CFPB does go gangbusters after lenders found to have "disparate impact" in lending, but I am not holding my breath. For we are talking about an arm of the Cathedral here, in a time of scant sunlight between party and State. It wasn't the philosophy that failed here, after all, it was just misapplied. Amiright?
It would be difficult to find a government agency less vulnerable to charges of discrimination than the CFPB. Its core culture still bears the imprint of its first leader, Elizabeth Warren, the progressive firebrand and rising star of the Democratic Party who is now a senator from Massachusetts. The law that created the bureau, the 2010 Dodd-Frank Act, explicitly requires the agency to combat discrimination in consumer finance.
While working as a CFPB enforcement attorney in 2011-12, I observed the political correctness that epitomizes the agency. Workforce diversity was a top priority in hiring some 1,000 employees. It seems inconceivable that CFPB's management could be discriminating against its workers. But disparate-impact statistics equal discrimination. Or at least that's what the CFPB tells the businesses it regulates.
The lesson the CFPB should learn from its own disparate-impact experience: Statistics are complicated. Numbers don't lie, but people often misinterpret them. Effect does not necessarily equal cause. Are the CFPB's managers discriminating based on race, despite the agency's best intentions? Were the statistical disparities caused by cronyism, elitism, or some other problem?
My guess as to the outcome of this apparent incident of rank liberalist hypocrisy? Corrective action will occur, in the form of Jim Crow personnel action based on race and sex, so as to restore demographic representation, another sop to big-D Diversity. And although it could be cause to Question, maybe even Notice, this unfortunate happening will not under any circumstances be allowed to impact equalitarian orthodoxy, not even a smidgen.