Federal Reserve Board: Needs to Improve Communication with Congress; Former Fed Vice Chair Donald Kohn Offers Suggestions in Op-Ed

Bloomberg published an article about a simmering disagreements between the Federal Reserve Board (Board) and Congress (members of the House Financial Services Committee)

Issues in brief–

  • Federal Open Market Committee leak, involving Medley Global Advisors. The Board has not responded to Congressional requests for information, citing a Department of Justice investigation. However, the Board conducted a previous investigation (in 2012), which was closed without finding any wrongdoing.
  • Reform of the Federal Reserve Act. Chair Janet Yellen feels the current structure of the Board is acceptable, according to the Bloomberg article.

In a Bloomberg View opinion piece, former Board Vice Chair Donald Kohn (with his book’s co-author David Wessel) offered suggestions for better Board communication with Congress. One of the suggestions is for the Board to provide Congress with copies of the Monetary Policy Report several days in advance of the hearings (the document is typically sent to Congress less than 24 hours before the first hearing).

The eight suggestions from Kohn and Wessel follow.

  1. The Fed should volunteer — and Congress should agree — to have monetary policy hearings quarterly, rather than twice a year. If the Fed believes that the economy evolves quickly enough to warrant issuing new projections and taking questions from the media every quarter, then the same reasoning should apply to informing the people’s representatives.
  2. In connection with the hearings, the now semi-annual Monetary Policy Report — or a streamlined version of it — should become quarterly. Among other things, the Fed should share the monetary policy rules that it already consults in its deliberations.
  3. The Fed should publicly release the Monetary Policy Report three days before the relevant hearing, so members of Congress and staff have adequate time to digest it.
  4. The Monetary Policy Report should continue to include the Fed’s assessment of financial stability risks. The intersection of these risks and monetary policy should be one focus of the quarterly hearings.
  5. Fed staff should continue to brief and field questions from the congressional staff who prepare members for the hearings. The chair should meet with the leaders of the relevant committees in the week before the hearing.
  6. Congress should establish a process for obtaining and publishing the views of outside experts about key policy issues before each set of hearings.
  7. To make them more informative and allow for more give-and-take, each quarterly hearing in the House should allow only half the committee members to question the chair, and each member should be allotted 10 minutes (instead of the current five).
  8. The Fed should hire outside experts to periodically evaluate the procedures used to generate the economic projections that the Federal Open Market Committee receives from its staff and how the committee presents its own projections to the public. These projections — both the staff inputs and the committee outputs — play a critical role in policy making and should be as sound and well-understood as possible. Other central banks have successfully employed such external peer review, which would help Congress and the public better evaluate the quality of monetary policy.
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Federal Reserve Board: H.2 Release for Week Ending March 12, 2016; Dems Request Update to 2013 GAO Study on Diversity in Financial Services Agencies and Industry

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending March 12, 2016, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Forms Forms — initial Board review to extend without revision the Funding and Liquidity Risk Management Guidance (FR 4198) and Recordkeeping Provisions Associated with Guidance on Leveraged Lending (FR 4203).

-Proposed, March 9, 2016

 

Forms — initial Board review to extend without revision the Reporting, Recordkeeping, and Disclosure Requirements Associated with Regulation NN (Reg NN).

-Proposed, March 10, 2016

 

 

 

 

 

Personnel Division of Banking Supervision and Regulation — appointment of Steve Spurry, Kathleen Johnson, and Joanne Wakim as assistant directors.

-Announced, March 7, 2016

Management Division — appointment of Steven A. Miranda as deputy director.

-Announced, March 9, 2016

 

Enforcement American Bank of Baxter Springs, Baxter Springs, Kansas — written agreement dated January 5, 2010, terminated March 4, 2016.

-Announced, March 8, 2016

 

CB Financial Corporation, Wilson, North Carolina — written agreement dated May 25, 2010, terminated March 3, 2016.

-Announced, March 8, 2016

 

Hazard Bancorp, Hazard, Kentucky, and Peoples Bank and Trust Company of Hazard — written agreement with the Federal Reserve Bank of Cleveland and the Commonwealth of Kentucky Department of Financial Institutions.

-Announced, March 8, 2016

 

 

 

Congressional Democrats Request Update to General Accountability Office’s 2013 Report on Diversity within the Financial Services Industry and Related Federal Agencies

On March 15, 2016, Ranking Member of the House Financial Services Committee, Rep. Maxine Waters (D-Calif.), Ranking Member of the Senate Banking Committee, Sen. Sherrod Brown (D-Ohio), and Ranking Member of the Investigations subcommittee of the House Financial Services Committee, Rep. Al Green (D-Tx.) requested that the General Accountability Office update its 2013 report “Diversity Management: Trends and Practices in the Financial Services Industry and Agencies after the Recent Financial Crisis” (released on May 16, 2013).

The Democrats stated that they were concerned about the slow pace of increasing diversity in the financial sector, as such diversity will help the industry to understand better all of the communities that it serves and to ensure that all consumers are treated fairly.

See also a report from the staff of the House Financial Services Committee (discussed previously in this blog).

 

Federal Reserve Board: H.2 Release for Week Ending March 5, 2016; GAO Investigates Regulatory Capture at the NY Fed Bank

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending March 5, 2016, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Forms Forms — final Board review to implement the Application for Membership for the Community Advisory Council (FR 1401).

-Approved, February 29, 2016

 

 

 

 

Personnel Division of Reserve Bank Operations and Payment Systems — appointment of Travis Nesmith and Marta Chaffee as assistant directors and David Mills as deputy associate director, and reassignment of Jeff Walker.

-Announced, March 1, 2016

Regulations and Policies Regulation YY (Enhanced Prudential Standards) — publication for comment of proposed rule to establish single-counterparty credit limits for large U.S. bank holding companies and foreign banking organizations.

-Approved, March 4, 2016

Enforcement ColoEast Bankshares, Inc., Lamar, Colorado — written agreement issued June 6, 2012, terminated February 29, 2016.

-Announced, March 3, 2016

 

Community First, Inc., Columbia, Tennessee — written agreement issued April 19, 2012, terminated February 29, 2016.

-Announced, March 3, 2016

 

CSRA Bank Corp., Wrens, Georgia — written agreement issued August 19, 2010, terminated January 20, 2016.

-Announced, March 1, 2016

 

FMB Equibanc, Inc., Statesboro, Georgia — written agreement issued April 23, 2010, terminated February 25, 2016.

-Announced, March 1, 2016

 

Industrial Bank of Korea, Seoul, Korea, and its New York, New York Branch — written agreement with the Federal Reserve Bank of New York and the New York State Department of Financial Services.

-Announced, March 1, 2016

 

Valley Bancorp, Inc., Brighton, Colorado — written agreement issued August 27, 2009, terminated February 26, 2016.

-Announced, March 3, 2016

 

General Accountability Office to Investigate Regulatory Capture at the New York Federal Reserve Bank

(March 4, 2016) According to Dow Jones Newswires, Representatives Maxine Waters (D-Calif.) and Al Green (D-Tx.), both of the House Financial Services Committee, requested that the General Accountability Office, a legislative branch agency, to investigate regulatory capture at the New York Federal Reserve Bank.

Federal Financial Regulatory Agencies: Financial Services Democrats Receive Responses from Agencies; Seek Further Action and Commitment for Measurable Results

In a previous post, I discussed the publication of a report by the U.S. House of Representatives’ Democrats (Representative Maxine Waters (D-Calif.), Representative Al Green (D-Tx.), and members of the Tri-Caucus) on the diversity and inclusion issues within the federal financial agencies.

Agency Date submitted Link Comment
Consumer Financial Protection Bureau December 7, 2015 http://democrats.financialservices.house.gov/uploadedfiles/2015.18.25_diversity_report_and_reforms_agency_responses_final.pdf
Federal Deposit Insurance Corporation December 7, 2015
Federal Housing Finance Agency December 7, 2015
Federal Reserve Board November 25, 2015 and February 8, 2016 Detailed letter (Feb. 8, 2016) submitted 2 days before the Monetary Policy Report hearing (Feb. 10, 2016).
National Credit Union Administration December 7, 2015
Office of the Comptroller of the Currency December 8, 2015
Securities and Exchange Commission December 9, 2015

According to a press release issued on January 8, 2016, the Democrats received responses from the federal financial regulatory agencies. Waters and members of the Tri-Caucus appreciated the responses but seek further action to ensure demonstrated commitment and action on the part of these agencies.

Federal Financial Agency Report Number Internet Link Comment
Consumer Financial Protection Bureau Audit report 2015-MO-C-002 http://oig.federalreserve.gov/reports/cfpb-diversity-inclusion-mar2015.pdf American Banker article about racial disparities of CFPB staff evaluations.
Department of the Treasury, Office of the Comptroller of the Currency OIG-15-017 http://www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/OIG-15-017.pdf
Federal Deposit Insurance Corporation Eval-15-001 http://www.fdicoig.gov/reports15/15-001EV.pdf
Federal Housing Finance Agency EVL-2015-003 http://fhfaoig.gov/Content/Files/EVL-2015-003.pdf
Federal Reserve Board Audit report 2015-MO-B-006 http://oig.federalreserve.gov/reports/board-diversity-inclusion-mar2015.pdf What is left out of the report is significant: Artis v. Bernanke (now Yellen). Also 12 U.S.C. 244 needs Congressional attention to ensure that Title 5 of the U.S. Code applies to the Board; the Board’s record-keeping on, and reporting of, its internal management is lax.
National Credit Union Administration OIG-14-09 http://www.ncua.gov/about/Leadership/CO/OIG/Documents/OIG201409EqualOpportunityDiversity.pdf Click for blog post on this report
Securities and Exchange Commission 528 http://www.sec.gov/oig/reportspubs/528.pdf Report is thorough, thoughtful, and well done.

In particular, Chair Janet Yellen stated in the Fed’s letter that the Fed had already begun acting on recommendations from its Inspector General.

[Note: Key issues to monitor PMR monitoring, discussions with OMWI director. Responses to these recommendations were opaque.]

Author’s note: Other posts relating to the Federal Reserve Board on this issue follow.

https://alexwdc.wordpress.com/2015/11/27/federal-reserve-board-h-2-release-for-week-ending-november-21-2015-a-brief-comment-on-diversity-practices-of-the-board/

https://alexwdc.wordpress.com/2015/11/13/federal-reserve-board-h-2-release-for-week-ending-november-7-2015-background-on-the-boards-omwi-program/

https://alexwdc.wordpress.com/2015/12/11/federal-reserve-board-walter-t-charlton-counsel-for-cynthia-artis-artis-v-bernanke-on-c-span-in-2002-a-note-onjohn-roberts-and-antonin-scalia/

https://alexwdc.wordpress.com/2015/10/29/federal-reserve-board-h-2-release-for-week-ending-october-24-2015-boards-ig-identifies-major-management-challenges/

https://alexwdc.wordpress.com/2015/07/22/federal-reserve-board-long-running-employment-discrimination-case-artis-v-bernanke-yellen-dismissed-with-prejudice-length-of-case-offends-conscience/

https://alexwdc.wordpress.com/2016/02/11/federal-reserve-board-legal-cases-against-the-board-2/

Federal Reserve Board: H.2 Release for Week Ending November 7, 2015; Background on the Board’s OMWI Program

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending November 7, 2015, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Testimony and Statements Supervision and Regulation — statement by Chair Yellen before the House Committee on Financial Services on the Federal Reserve’s regulation and supervision of financial institutions.

-Published, November 4, 2015

Bank Holding Companies M&T Bank Corporation, Buffalo, New York — commenter’s request for reconsideration of the Board’s approval of the proposal by M&T Bank Corporation to acquire Hudson City Bancorp, Inc., Paramus, New Jersey.

-Denied, November 4, 2015

Forms Forms — final Board review to extend without revision the recordkeeping and disclosure requirements associated with the regulations implementing the Fair Credit Reporting Act (Regulation V).

-Approved, November 2, 2015

Forms — initial Board review to implement the Application for Membership for the Community Advisory Council (FR 1401).

-Proposed, November 2, 2015

Reserve Bank Operations Federal Reserve Bank of Minneapolis — appointment of Neel T. Kashkari as president, effective January 1, 2016.

-Approved, October 22, 2015

(A/C)

Reserve Bank Services Federal Reserve Priced Services — 2016 private sector adjustment factor and fee schedules for priced services and electronic access.

-Approved, November 2, 2015

Enforcement Deutsche Bank, AG, Frankfurt, Germany — issuance of a consent cease and desist order and assessment of a civil money penalty.

-Approved, November 2, 2015

Goldman, Sachs & Co., New York, New York — issuance of a consent order of prohibition against Rohit Bansal, a former institution-affiliated party.

-Announced, November 5, 2015

Separately, last week, Representative Maxine Waters (D-Calif.) and other Congressional Democrats issued a report (Waters Report) about diversity within the federal financial regulatory agencies. The executive summary for the report indicated that the Board’s director for the Office of Minority and Women Inclusion (at the time of this writing, the Board calls the office, the Office of Diversity and Inclusion (or ODI)) is Ms. Sheila Clark.

[Quote from Rev. Thomas Merton’ s book, “Seeds of Destruction.” (Pope Francis mentioned Rev. Merton during his remarks before a joint session of Congress.)–

But the [civil rights] laws have been framed in a way that in every case their execution has depended on the good will of white society, and the white man has not failed, when left to himself, to block, obstruct, or simply forget the necessary action without which the rights of the Negro cannot be engaged in fact. (Page 19).

]

Some pertinent background facts:

January 11, 2011: Artis v Greenspan–The Court of Appeals for the District of Columbia Circuit, issued a decision against the Board, remanding the case to the U.S. District Court for the District of Columbia.

January 11, 2011: The Board announced that it had created offices of diversity and inclusion for the Board and the Federal Reserve Banks. The director of the Board’s office was named–Ms. Sheila Clark.

Ms. Sheila Clark–

  • See a Huffington Post article by Professor Robert D. Auerbach, author of “Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan’s Bank,” in which he stated (reference (about letter) is located at page 123 of his book)–
    • “The Fed Press Release states that Sheila Clark will be one of the heads of the “diversity and inclusion offices” at the Board. I have a copy of a letter sent by her (10/27/1995) stating that “while the Board of Governors of the Federal Reserve System has taken the position that [missing ‘it”] is not subject to the [C]ivil [R]ights Act of 1964, as amended, and its associated executive orders and regulations, it subscribes fully to their basic goals and spirit.” Yet, the Federal government’s Equal Employment Opportunity Commission (EEOC) had told Greenspan emphatically as early as 1989 that the Commission’s position was that Title VII of the Civil Rights Act applied fully to the Federal Reserve.”
Sheila Clark's letter to the EEOC (printed in the Aurebach book, page 123).
Sheila Clark’s letter to the EEOC (printed in the Auerbach book, page 123).

In addition, the executive summary of the Waters Report (page 5) stated the following about the Board:

The Federal Reserve Board of Governors (“FRB”)

OMWI Director–Sheila Clark

The Federal Reserve Board is the central bank of the United States, and in addition to working to provide a safer, more stable and flexible monetary system, it also regulates bank holding companies, and the largest, most complex non-bank financial institutions in the country.

In racial, ethnic and gender categories, its workforce diversity was found to exceed the diversity found within the civilian labor force.

The FRB has the most diverse general workforce and the largest percentage of women employees in senior management.

Yet, notably the FRB OIG determined that the diversity data collected was not validated against the agency’s employee electronic human resources records which undermines the integrity of the agency’s diversity efforts and its strong empirical diversity data.

The FRB does not have a finalized set of diversity and inclusion standards as required under the Dodd-Frank Act.

Federal Reserve Board, Office of Minority and Women Inclusion, Reports to Congress

(Preface language for report submitted in 2015.) “Pursuant to section 342(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Office of Diversity and Inclusion (ODI) of the Board of Governors of the Federal Reserve System must submit an annual report to the Congress outlining the activities, successes, and challenges of the office. This is the office’s report for calendar year 2014. Sheila Clark serves as the director of ODI.”

Federal Reserve Board: H.2 Release for Week Ending October 31, 2015; Rep. Maxine Waters Issues Report on Diversity at Fed. Financial Agencies, Incl. the Board

[Update 8-March-16: Representative Maxine Waters (D-Calif.) and the Tri-Caucus issued a press release (dated 8-Jan-16) discussing the receipt of letters from the federal financial regulatory agencies.]

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending October 31, 2015, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Regulations and Policies Margin and Capital Requirements for Covered Swap Entities — (1) interagency final rule to establish minimum margin and capital requirements for swaps and security-based swaps that are not cleared through a clearinghouse, in accordance with the Dodd-Frank Act, and (2) request for comment on interim final rule to exempt from margin requirements certain non-cleared swaps, such as those used for hedging purposes by commercial end-user counterparties.

-Approved, October 30, 2015

Regulations Q and YY — publication for comment of proposed rule to require U.S. global systemically important banking organizations and the U.S. operations of systemically important foreign banks to meet a new long-term debt requirement and a new total loss-absorbing capacity requirement.

-Approved, October 30, 2015

In addition, on November 5, 2015, the Board permanently barred Mr. Rohit Bansal, former investment banker at Goldman Sachs & Co. from participating in the banking industry.

CN6B2sAUcAQ0nRs

Separately, and also on November 5, 2015, Representative Maxine Waters (D-Calif.), Ranking Member of the House Committee on Financial Services, and the Tri-Caucus, issued a report, “The Dodd-Frank Act Five Years Later: Diversity in the Financial Services Agencies.” In addition, the Committee Democrats issued a letter, with the report, to the agency heads, requesting a response by December 7, 2015.

Notably, but sadly unsurprisingly, the report found that across the federal financial agencies, black/African American employees, overall, received lower performance management scores than white employees (see graphs on page 12 of the report, especially the one for the Board at the bottom of the page).

In addition, the report had specific comments for each agency. I will quote the portion of the report relating to the Board below.

The Federal Reserve Board of Governors (FRB)

Empirically, the FRB workforce was among the most diverse of all the Agencies, both generally and with respect to the senior management. In racial, ethnic, and gender categories, its workforce diversity was found to exceed the CLF. However, the OIG found several areas where the FRB has failed to adhere to statutory requirements.

Procedurally, the FRB did not follow the statutory instructions to name the newly-established diversity office, “the Office of Minority and Women Inclusion,” and instead opted to call it the “Office of Diversity and Inclusion” (“OD&I”).

Substantively, the OIG also recommended that the OD&I Director ensure that No-FEAR Act training is offered on a regular basis, is tailored to the FRB, and includes EEO and diversity and inclusion topics in accordance with the Board’s No-FEAR Act Written Training Plan.[48. Federal Reserve Board, Office of Inspector General, THE BOARD CAN ENHANCE ITS DIVERSITY AND INCLUSION EFFORTS, (2015-MO-B006, Mar. 31, 2015), 54.] Further, the OIG suggested that such trainings be updated as necessary to address any deficiencies identified, and that attendance records be retained.[49. Id.] The OIG noted that the EEOC’s MD-715 “guidance advocates that all employees receive information about the EEO program through training on the EEO process and the protections afforded to employees, related policy statements, and reasonable accommodation procedures.”[50. Id. at 53.] Such diversity and inclusion training is critical to the proper functioning of the human resources office within the agency. Notably, the OIG found that the “data collected [for the OD&I’s MD-715 processes] were not validated against the employee electronic records stored in HR” during the audit period from FY 2011 through FY 2013. The lack of controls for diversity data found at the FRB by the OIG undermines the integrity of the agency’s diversity and inclusion programs, and may in fact be contrary to required EEOC reporting regulations.

Ultimately, the FRB’s implementation of the Section 342 requirements suggests to the Committee staff a tendency toward maintaining the status-quo with respect to workforce diversity efforts. “Although the FRB established the OD&I to include an OMWI function in response to the Dodd-Frank Act requirements, according to the OD&I official, the OD&I has not significantly modified its approach because these activities were already being covered prior to the enactment of the Dodd-Frank Act.”[51. Id. at 55.] Also, like several other agencies, as of the date of the OIG’s report, the OD&I had not finalized a formal set of diversity and inclusion standards, as required by Section 342.

[Author’s note: This blog covered some parts of these audit reports from the Inspectors General, especially that for the Board.]

Federal Financial Agency Report Number Internet Link Comment
Consumer Financial Protection Bureau Audit report 2015-MO-C-002 http://oig.federalreserve.gov/reports/cfpb-diversity-inclusion-mar2015.pdf American Banker article about racial disparities of CFPB staff evaluations.
Department of the Treasury, Office of the Comptroller of the Currency OIG-15-017 http://www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/OIG-15-017.pdf
Federal Deposit Insurance Corporation Eval-15-001 http://www.fdicoig.gov/reports15/15-001EV.pdf
Federal Housing Finance Agency EVL-2015-003 http://fhfaoig.gov/Content/Files/EVL-2015-003.pdf
Federal Reserve Board Audit report 2015-MO-B-006 http://oig.federalreserve.gov/reports/board-diversity-inclusion-mar2015.pdf What is left out of the report is significant: Artis v. Bernanke (now Yellen). Also 12 U.S.C. 244 needs Congressional attention to ensure that Title 5 of the U.S. Code applies to the Board; the Board’s record-keeping on, and reporting of, its internal management is lax.
National Credit Union Administration OIG-14-09 http://www.ncua.gov/about/Leadership/CO/OIG/Documents/OIG201409EqualOpportunityDiversity.pdf Click for blog post on this report
Securities and Exchange Commission 528 http://www.sec.gov/oig/reportspubs/528.pdf Report is thorough, thoughtful, and well done.

CFPB: House Committee Investigates Allegations of Discrimination; Views Differ on Motivations for Hearings–Destroy CFPB or Address Discrimination

On June 25, 2015, the oversight and investigations subcommittee of the House of Representatives’ Committee on Financial Services held a fifth hearing about discrimination at the Consumer Financial Protection Bureau (CFPB). The hearing was titled “Examining Continuing Allegations of Discrimination and Retaliation at the Consumer Financial Protection Bureau.” But this was no mere subcommittee hearing as both the chairman and ranking member of the full Committee were also present.

Hearings of the House Financial Services Committee, Oversight and Investigations Subcommittee
Date Title of Hearing Witnesses Hearing Report Number
4/2/2014 Allegations of Discrimination and Retaliation within the Consumer Financial Protection Bureau Ms. Angela Martin and Ms. Misty Raucci 113-72
5/21/2014 Allegations of Discrimination and Retaliation within the Consumer Financial Protection Bureau, part 2 Mr. Benjamin Konop and Ms. Liza Strong 113-81
6/18/2014 Allegations of Discrimination and Retaliation within the Consumer Financial Protection Bureau, part 3 Mr. Ali Naraghi and Mr. Kevin Williams 113-85
7/30/2014 Allegations of Discrimination and Retaliation and the CFPB Management Culture The Honorable Richard Cordray 113-96
6/25/2015 Examining Continuing Allegations of Discrimination and Retaliation at the Consumer Financial Protection Bureau Mr. Robert Cauldwell and Ms. Florine Williams

While the context of the hearing was about the allegations of discrimination, the issue became clouded with the question whether the CFPB should continue to exist. Because of this entanglement, the Democrats were concerned that complaints of discrimination (which the Democratic side holds as serious in their own right) was being used by the GOP majority as a method to undermine the agency, which the GOP would favor.

Do you think that the majority of the members on the opposite side of the aisle are more concerned about discrimination than this side of the aisle?” she [Rep. Maxine Waters (D-Calif.)] asked. “Just take a look.”

Waters’s comment drew audible murmurs from Reps. Mick Mulvaney (R-S.C.), Ann Wagner (R-Mo.) and Mia Love (R-Utah), who is the first black Republican woman elected in Congress.

“Oh my gosh,” Love said. “Wow.”

“Yeah, you can, ‘Wow’ all you want,” said Waters. “Discrimination issues — at least on this side of the aisle — are taken seriously. … [But] this is a political fight inside the committee.”

Additionally, only the minority members of the Committee have asked the Offices of Inspectors General for the federal financial regulatory agencies to examine their respective agencies diversity and inclusion practices. Yet, as of the date of this post, there have been no hearings held on those reports.

Federal Financial Agency Report Number Internet Link Comment
Consumer Financial Protection Bureau Audit report 2015-MO-C-002 http://oig.federalreserve.gov/reports/cfpb-diversity-inclusion-mar2015.pdf American Banker article about racial disparities of CFPB staff evaluations.
Department of the Treasury, Office of the Comptroller of the Currency OIG-15-017 http://www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/OIG-15-017.pdf
Federal Deposit Insurance Corporation Eval-15-001 http://www.fdicoig.gov/reports15/15-001EV.pdf
Federal Housing Finance Agency EVL-2015-003 http://fhfaoig.gov/Content/Files/EVL-2015-003.pdf
Federal Reserve Board Audit report 2015-MO-B-006 http://oig.federalreserve.gov/reports/board-diversity-inclusion-mar2015.pdf What is left out of the report is significant: Artis v. Bernanke (now Yellen). Also 12 U.S.C. 244 needs Congressional attention to ensure that Title 5 of the U.S. Code applies to the Board; the Board’s record-keeping on, and reporting of, its internal management is lax.
National Credit Union Administration OIG-14-09 http://www.ncua.gov/about/Leadership/CO/OIG/Documents/OIG201409EqualOpportunityDiversity.pdf Click for blog post on this report
Securities and Exchange Commission 528 http://www.sec.gov/oig/reportspubs/528.pdf Report is thorough, thoughtful, and well done.

As for the testimony, Ms. Florine Williams, senior equal employment specialist, in the CFPB’s Office of Civil Rights, had to file a discrimination complaint herself about her mistreatment by her supervisor.

Also testifying was Mr. Robert Cauldwell, president of the National Treasury Employees Union, chapter 335, and examiner at the CFPB. Mr. Cauldwell submitted testimony about the bad management culture at the CFPB. However, there were questions from the dais about whether he had complaints of discrimination filed against him. In addition, there were questions about why he did not speak for the NTEU.