In a June 22 letter to the inspector general of the Federal Reserve Board and Consumer Financial Protection Bureau, Subcommittee on Government Operations Ranking Member and House Representative Jody Hice (R-GA) called for an urgent investigation into reports that the Biden administration is targeting certain career CFPB employees from the Trump administration to replace them with new hires. Senator Pat Toomey (R-PA), the ranking member of the Senate Banking Committee, called for a similar investigation a week prior.
In a published report, the CFPB was accused of offering some senior employees incentives to leave early, such as early retirement packages allowing them to access their full pensions, and investigating other senior employees to find grounds for termination or inducing them to leave voluntarily. Such actions run contrary to both Biden’s original promise to empower the government workforce and civil service protections outlined in the Civil Service Reform Act of 1978, 5 U.S.C. § 1101 et seq., which establishes the mechanism of permanent federal employment based on merit rather than on political affiliation.
Such dilemmas with career staff are not new to the CFPB. Recently created during the Obama administration in 2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act in response to the Great Recession, its original employees were legally hired by circumventing some of the normal federal requirements. Mick Mulvaney, who temporarily led the CFPB during the Trump administration, distrusted these staffers hired by the Obama administration, and thus installed new political appointees to whom these staff members would have to answer. Similar to what’s happening on Capitol Hill today, this led to backlash from lawmakers, as well as to original executive-level CFPB staffers stepping down, allowing Mulvaney and his successor to install more Trump-friendly staffers.
Former Representative Barney Frank (D-MA), after whom the Dodd-Frank Act is named, stated the CFPB is “an unusual agency in that Trump was entirely hostile to its mission and its purpose,” and he would “not be surprised if the [Biden administration] felt it needed to make changes.”
Although some current CFPB employees were not sympathetic to Trump’s vision for a less aggressive CFPB, they are confused as to why the Biden administration is taking such actions. One such employee stated that the Biden administration is ruining the careers of “quality people” with decades of experience at other agencies, raising concerns about the loss of institutional knowledge at a relatively new agency. Another employee who voted for Biden believes he or she is “getting ousted because I was hired by the [Trump administration],” which runs contrary to Biden’s promise during his first week in office to allow agency staffers to work without White House interference.
These actions may raise concerns of more congressional members. “It would be very concerning if the administration were to politicize the CFPB by removing senior career employees and replacing them with handpicked activists as alleged,” said Amanda Thompson, spokesperson for Republicans on the Senate Banking Committee.
The CFPB has yet to comment on the report. We will continue to monitor and report on any development related to this matter.