RE: FOIA Request #CFPB-2017-299-F July 5, 2017 Mr. Austin Evers American Oversight 1030 15th Street NW, Suite B255 Washington, DC 20005 Dear Mr. Evers: This letter is in final response to your Freedom of Information Act (FOIA) request dated May 9, 2017 to the Consumer Financial Protection Bureau (CFPB). Your request sought the following documents: 1) All communications between CFPB and Congressman Jeb Hensarling, any other member of the House Financial Services Committee, or any staff member working for either the House Financial Services Committee or one of its members concerning proposed legislation or administrative actions from January 20, 2017 to the date the search is conducted. 2) All communications relating to the opinion of Committee Chairman Jeb Hensarling that communications between the House Financial Services Committee and federal agencies are not subject to disclosure under the Freedom of Information Act, including but not limited to instructions, directives, or guidance received on this issue from Chairman Hensarling or his staff, as well as internal agency correspondence on the issue. Please provide all responsive records from January 20, 2017 to the date the search is conducted. 3) Any memoranda, policies, rules, protocols, restrictions, directives, guidance, or other guidelines addressing how CFPB responds to FOIA requests that implicate communications with Congress or records created at the request of Congress with no limit to the date range for the search of records. 4) Records describing the processing of this request, including records sufficient to identify search terms used and locations and custodians searched and any tracking sheets used to track the processing of this request. On June 22, 2017 you were provided an interim response to your request, which consisted of 796 pages that were granted in full. A search of our Legal Division for documents responsive to your request produced a total of 110 pages. Of those pages, I have determined that 7 pages of the records are granted in full, 13 pages are granted in part, and 90 pages are withheld in full pursuant to Title 5 U.S.C. § 552 (b)(5). FOIA Exemption 5 protects from disclosure those inter- or intra-agency documents that are normally privileged in the civil discovery context. The three most frequently invoked privileges are the deliberative process privilege, the attorney work-product privilege, and the attorney-client privilege. After carefully reviewing the responsive documents, I determined that portions of the responsive documents qualify for protection under the Deliberative Process Privilege, AttorneyClient Privilege, and Attorney Work-Product Privilege. • Deliberative Process Privilege The deliberative process privilege protects the integrity of the deliberative or decisionmaking processes within the agency by exempting from mandatory disclosure opinions, conclusions, and recommendations included within inter-agency or intra-agency memoranda or letters. The release of this internal information would discourage the expression of candid opinions and inhibit the free and frank exchange of information among agency personnel. • Attorney Work-Product Privilege The attorney work-product privilege protects documents and other memoranda prepared by an attorney in contemplation of litigation. • Attorney-Client Privilege The attorney-client privilege protects confidential communications between an attorney and his client relating to a legal matter for which the client has sought professional advice. It applies to facts divulged by a client to his attorney, and encompasses any opinions given by an attorney to his client based upon, and thus reflecting, those facts, as well as communications between attorneys that reflect client-supplied information. The attorney-client privilege is not limited to the context of litigation. FOIA Exemption 6 exempts from disclosure personnel or medical files and similar files the release of which would cause a clearly unwarranted invasion of personal privacy. This requires a balancing of the public’s right to disclosure against the individual’s right to privacy. The types of documents and/or information that we have withheld may consist of mobile telephone numbers or various other documents and/or information belonging to a third party that are considered personal. The privacy interests of the individuals in the records you have requested outweigh any minimal public interest in disclosure of the information. Any private interest you may have in that information does not factor into the aforementioned balancing test. You may appeal any of the responses or decisions set forth above. If you choose to file an appeal, you must do so within 90 calendar days from the date of this letter. Your appeal must be in writing, signed by you or your representative, and should contain the rationale for the appeal. You may send your appeal via the mail (address below), email (CFPB_FOIA@cfpb.gov) or fax (1-855-FAX-FOIA (329-3642)). Your appeal should be addressed to: Consumer Financial Protection Bureau Chief FOIA Officer Freedom of Information Appeal 1700 G Street, NW Washington, DC 20552 Provisions of the FOIA allow us to recover part of the cost of complying with your request. In this instance, we have waived all fees related to the processing of your request. Therefore, your fee waiver is moot. For inquiries concerning your request, please contact our FOIA Public Liaison at CFPB_FOIA@cfpb.gov or by phone at 1-855-444-FOIA (3642). Additionally, you may contact the Office of Government Information Services (OGIS) at the National Archives and Records Administration to inquire about the FOIA mediation services they offer. The contact information for OGIS is as follows: Office of Government Information Services, National Archives and Records Administration, 8601 Adelphi Road-OGIS, College Park, MD 20740; e-mail at ogis@nara.gov; telephone at 202-741-5770; toll free at 1-877-684-6448; or facsimile at 202-741-5769. Sincerely, Raynell D. Lazier FOIA Manager Operations Division Document ID: 0.7.1000.83214 From: Tindall, Anne (CFPB) To: Szybala, Julia (CFPB) ; King, David (CFPB) Cc: Bcc: Subject: FW: FOIA Weekly Update (4/21/17) Date: Fri Apr 21 2017 11:40:47 EDT Attachments: FOIA_Weekly_Update_04_21_2017.docx CWEmbed1.xlsx CWEmbed2.xlsx image001 image002.png From: Lazier, RayneII (CFPB) Sent: Friday, April 21, 2017 8:44 AM To: Bressler, Steven (CFPB); Howard, Jennifer (CFPB); Lepley, Richard (CFPB); Brown, Amy (CFPB); Ellis, Elizabeth (CFPB); Cumpiano, Flavio (CFPB); Barrett, Jack (CFPB); Rice, Kevin (CFPB); CFPB_Daily Briefing Book; Galicia, Catherine (CFPB); Alag, Sartaj (CFPB); Tindall, Anne (CFPB); Martinez, Zixta (CFPB); Chieco, Gena (CFPB); Coleman, John (CFPB); Ploch, Amanda (CFPB); Dorsey, Darian (CFPB); Johnson, Christopher (CFPB); Boison, Elizabeth (CFPB); O'Brien, Patrick (CFPB); McLeod, Mary (CFPB); Kamenshine, Wendy (CFPB); Sokolov, Dan (CFPB); Parker Rose, Cheryl (CFPB) Cc: Ramdass, Nelly (CFPB); Heiser, Nicole (CFPB); Michalosky, Martin (CFPB); Pearl, Joanna (CFPB); Lee, Lani (CFPB); Coon, Clayton (CFPB); Parker, Melanie (CFPB); Skinner, Cathaleen (CFPB); Gonzalez, Maria (CFPB); Walter, Holly (CFPB); Williams, Amy (CFPB); Melcher, Glenn (CFPB); Stieg, Sherri (CFPB); Johnson, Christine (CFPB); Coates, Laura (CFPB); Bryant, Michael (CFPB); Sparrow, Blake (CFPB); Beaudette, Mark (CFPB); Vaisa, Stephanie (CFPB); Slagter, Dennis (CFPB); Anderson, Emily (CFPB); Fulton, Kate (CFPB); Conner, Bobby (CFPB); Gilford, Samuel (CFPB); Vahey, Moira (CFPB); Mayorga, David (CFPB); Strong, Liza (CFPB); Hassouni, Lauren (CFPB); Brandlee, Kelsie (CFPB); McGill, Yolanda (CFPB); Sheehan, Timothy (CFPB); Ekpo, Sherika (CFPB); Hand, Delicia (CFPB); Cameron, Matt (CFPB); Samburg, Mark (CFPB); Ling, Yuh Wen (CFPB); Schumach, Samuel (CFPB); Lavin, Brian (CFPB); White, Sonya (CFPB); Ahmad, Farah (CFPB); Delphey, Sean (CFPB) Subject: FOIA Weekly Update (4/21/17) Good morning, Attached is this week's FOIA update. Page 1086 of 2353 DOJ 01P asks for assistance on National FOIA Portal On Wednesday, DOJ's Office of Information Policy (01P) announced its collaboration with GSA's 18F team on the development of a National FOIA Portal. This is the next step in a long line of 01P initiatives working towards a National FOIA Portal going back to 2010 with the launch of FOIA.gov. Most recently, the FOIA Improvement Act of 2016 required the creation of a National FOIA Portal that is interoperable with agencies' current systems and allows the public to submit a request for records to any agency from a single website. Building off previous work and research with FOIA users, 01P and 18F will focus on user research and discovery of issues necessary to inform future development. If you're interested in joining the effort and providing feedback throughout the process, see more here. FBI sued for records on Trump dossier The conservative-driven Cause of Action Institute has brought a federal complaint to access FBI records on the former British spy who prepared a salacious dossier on President Donald Trump's ties to Russia. Specifically, the institute seeks records under the FOIA "evidencing ... whether the FBI paid, or caused to be paid, money to Christopher Steele for any purpose." Cause of Action brought its federal complaint Monday in Washington, saying its March FOIA request has been gathering dust. The 4-page lawsuit says the FBI assigned a case number to its request, and granted it news-media status in March, but has said nothing else, blowing past FOIA deadlines. Please contact me if you have any questions. Thanks, RayneII D. Lazier FOIA Manager I Operations Division Office: 202-435-7165 I Mobile: Consumer Financial Protection Bureau consumerfinance.gov/foia Page 1087 of 2353 Document ID: 0.7.1000.45818 From: Lazier, RayneII (CFPB) To: Bressler, Steven (CFPB) ; Howard, Jennifer (CFPB) : Lepley, Richard (CFPB) ; Brown, Amy (CFPB) ; Ellis, Elizabeth (CFPB) ; Cumpiano, Flavio (CFPB) ; Barrett, Jack (CFPB) ; Rice, Kevin (CFPB) ; CFPB_Daily Briefing Book ; Galicia, Catherine (CFPB) ; Alag, Sartaj (CFPB) ; Tindall, Anne (CFPB) ; Martinez, Zixta (CFPB) ; Chieco, Gena (CFPB) ; Coleman, John (CFPB) ; Ploch, Amanda (CFPB) ; Dorsey, Darian (CFPB) ; Johnson, Christopher (CFPB) ; Boison, Elizabeth (CFPB) ; O'Brien, Patrick (CFPB) ; McLeod, Mary (CFPB) ; Kamenshine, Wendy (CFPB) ; Sokolov, Dan (CFPB) ; Parker Rose, Cheryl (CFPB) Privacy@cfpb.gov <1privacy@cfpb.gov5; Ramdass, Nelly (CFPB) ; Heiser, Nicole (CFPB) ; Michalosky, Martin (CFPB) ; Pearl, Joanna (CFPB) ; Lee, Lani (CFPB) ; Coon, Clayton (CFPB) ; Parker, Melanie (CFPB) ; Skinner, Cathaleen (CFPB) ; Gonzalez, Maria (CFPB) ; Walter, Holly (CFPB) ; Williams, Amy (CFPB) ; Melcher, Glenn (CFPB) ; Stieg, Sherri (CFPB) ; Johnson, Christine (CFPB) ; Coates, Laura (CFPB) ; Bryant, Michael (CFPB) ; Sparrow, Blake (CFPB) ; Beaudette, Mark (CFPB) ; Vaisa, Stephanie (CFPB) ; Slagter, Dennis (CFPB) ; Anderson, Emily (CFPB) ; Fulton, Kate (CFPB) ; Conner, Bobby (CFPB) ; Gilford, Samuel (CFPB) ; Vahey, Moira (CFPB) ; Mayorga, David (CFPB) ; Strong, Liza (CFPB) ; Hassouni, Lauren (CFPB) ; Brandlee, Kelsie (CFPB) ; McGill, Yolanda (CFPB) ; Sheehan, Timothy (CFPB) ; Ekpo, Sherika (CFPB) ; Hand, Delicia (CFPB) ; Cameron, Matt (CFPB) ; Samburg, Mark (CFPB) ; Ling, Yuh Wen (CFPB) ; Schumach, Samuel (CFPB) ; Lavin, Brian (CFPB) ; White, Sonya (CFPB) ; Ahmad, Farah (CFPB) ; Delphey, Sean (CFPB) Bcc: Subject: Date: Attachments: FOIA Weekly Update (5/5/17) Fri May 05 2017 09:16:36 EDT FOIA_Weekly_Update_05_08_2017.docx CWEmbed1.xlsx CWEmbed2.xlsx image003 image004.png Good morning, Attached is this week's FOIA update. DOJ's 01P releases summary of FY16 annual FOIA reports The Office of Information Policy (01P) released its government-wide summary of agencies' Annual FOIA Reports. This comprehensive picture into the government's FOIA activities during the previous fiscal year looks at key statistics in FOIA administration and identifies trends in FOIA processing by Page 1121 of 2353 comparing data from prior years. "The FOIA is used by hundreds of thousands of requesters every year as an important tool for accessing government information," said Director Melanie Pustay of OIP. "As demand continues to increase, the Annual FOIA Report provides the public a wealth of detailed information about agencies' handling of these requests." The government overall continued to face high numbers of incoming FOIA Requests during fiscal year 2016, receiving a record high of nearly 800,000 requests. House Committee Expresses Intent to Protect Its Correspondence With Government Officials The Chairman of the House Committee on Financial Services sent a letter last month to the head of the Treasury Department instructing him to decline FOIA requests relating to communications between the two offices, a letter that open records advocates called "deeply troubling." Congressman Jeb Hensarling, a Republican from Texas and the committee's chair, sent letter dated April 3 to Treasury Secretary Steven Mnuchin. The letter reads that since the Committee on Financial Services has legislative and oversight jurisdiction over the Treasury Department, all records of communication between the two offices and any documents produced remain in the committee's control — even when in the physical possession of the Treasury Department. Please contact me if you have any questions. Thanks, RayneII D. Lazier FOIA Manager I Operations Division Office: 202-435-7165 I Mobile' Consumer Financial Protection Bureau consumerfinance.gov/foia Page 1122 of 2353 Document ID: 0.7.1000.68097 From: Gilford, Samuel (CFPB) To: Howard, Jennifer (CFPB) ; Fulton, Kate (CFPB) ; Tindall, Anne (CFPB) ; Coleman, John (CFPB) ; Bressler, Steven (CFPB) ; McLeod, Mary (CFPB) ; Galicia, Catherine (CFPB) ; English, Leandra (CFPB) ; O'Brien, Patrick (CFPB) ; Mayorga, David (CFPB) ; Martinez, Zixta (CFPB) ; Ellis, Elizabeth (CFPB) ; Smith, Daniel (CFPB) ; Parker Rose, Cheryl (CFPB) ; Chea, Keo (CFPB) ; Hand, Delicia (CFPB) Cc: Bcc: Subject: FYI - The Hill Op-Ed: The next front in the FOIA War: Congress blocking disclosure of its dealings with the Executive Branch Date: Mon May 08 2017 16:58:34 EDT Attachments: The Hill: The next front in the FOIA War: Congress blocking disclosure of its dealings with the Executive Branch BY RYAN MULVEY, OPINION CONTRIBUTOR 05/08/17 04:45 PM EDT Ryan Mulvey is counsel at Cause of Action Institute, a District of Columbia non-profit government oversight organization. Page 2286 of 2353 Presidential interference with public access to politically sensitive agency records has been an ongoing fight that seems unlikely to end anytime soon, and now it appears Congress has decided to get into the game. My organization, Cause of Action Institute ("CoA Institute"), has long been at the forefront of fighting against unlawful obstruction of the Freedom of Information Act ("FOIA"). Last year, we filed a lawsuit against the Office of the White House Counsel to end the practice of "White House equities" review, which results in the delay of responses to FOIA requests that the administration deems politically embarrassing. With that lawsuit still ongoing, Congress has taken a page from the White House's playbook to keep records of its dealings with agencies hidden from public view, too. BuzzFeed reported last week that Financial Services Committee Chairman Jeb Hensarling (R-Texas) sent a letter to the Treasury Department that directed the agency to treat all records exchanged with the committee as "congressional records" not subject to the FOIA. Specifically, Hensarling claimed that any communications to the agency, and any "documents created or compiled" by Treasury "in connection with any responses" to Congress, could not qualify as "agency records," regardless of whether they included a "legend" indicating how they could be used. The chairman further claimed that all such records would be "subject to the absolute protections of the Speech or Debate Clause of the Constitution." Other sources indicate that Hensarling sent similar letters to other agencies, including the Consumer Financial Protection Bureau and the Federal Deposit Insurance Corporation. Hensarling's attempt to redefine the scope of potential records subject to release under the FOIA is, in large part, without merit. Congress frequently corresponds with Executive Branch agencies in connection with legislation or as a matter of oversight or investigation. At times, such correspondence may be sensitive or confidential, and the FOIA provides a way to distinguish between "agency records" and "congressional records" in those circumstances. That approach, however, disallows the sort of non-specific, generalized claims advanced in Hensarling's letter. Sadly, the House Financial Services Committee is not the first committee to try to frustrate the FOIA in this way. CoA Institute is suing the IRS over guidance that its Office of Chief Counsel issued in December 2015. The guidance claims that nearly all records relating to the Joint Committee on Taxation should be shielded from disclosure as "congressional records." We argue that this contradicts long-standing precedent and, more importantly, inhibits transparency and good government. The mere fact that a record controlled by an agency relates to Congress, was created by Congress, or was transmitted to Congress, does not, by itself, render it a congressional record. Its nature as an "agency record," and its availability under the FOIA, is dependent on whether Congress manifested clear intent to control the specific record in question. Courts take the requirement that Congress manifest its intent over records seriously. Established case law mandates that Congress demonstrate the intent to retain control clearly and with specific language particular to the records at issue. Neither Congress nor an agency can rely on general, far-reaching, or pre-existing arrangements to treat all records as "congressional." Post-hoc attempts to establish intent, say, after a FOIA request has been submitted, also are inadequate. Congress must instead establish its intent to maintain control over records either before they are created or contemporaneous with their transfer to or from an agency. And Congress cannot act subsequently to vitiate that original intent. With this in mind, it should be clear that Hensarling's letter is all bark and no bite. There are no specific records at issue, such as documents requested for a named hearing or open investigation. And the chairman's argument that the absence of a restrictive legend is "immaterial" is contradicted by the case law. His position is also terrible policy. The practical result of Hensarling's approach would be to sweep a wide swath of records out of public reach, which would deprive journalists and everyday Americans of access to information about the interaction between Congress and the Executive Branch. That would severely undermine the fundamental purpose of the FOIA. Advocates for open government should remain vigilant against future efforts by other congressional committees to interfere with the FOIA in a Page 2287 of 2353 similar manner. http://thehill.com/blogs/congress-blog/judicia1/332429-the-next-front-in-the-foia-war-congress-blockingdisclosure-of Page 2288 of 2353 Document ID: 0.7.1000.94665 From: Tindall, Anne (CFPB) To: Nedimala, Himali (CFPB) ; Coleman, John (CFPB) Cc: Bcc: Subject: RE: HFSC Control of Congressional Records draft response Date: Tue Apr 25 2017 13:56:26 EDT Attachments: Can't wait to check it out. From: Nedimala, Himali (CFPB) Sent: Tuesday, April 25, 2017 1:51 PM To: Coleman, John (CFPB); Tindall, Anne (CFPB) Subject: Re: HFSC Control of Congressional Records draft response The view from our SF office is gorgeous. Fantastic view of the bay. Sent from my BlackBerry 10 smartphone on the Verizon Wireless 4G LTE network. From: Nedimala, Himali (CFPB) Sent: Monday, April 24, 2017 1:14 PM To: Coleman, John (CFPB); Szybala, Julia (CFPB); Bressler, Steven (CFPB); Tindall, Anne (CFPB) Cc: Coates, Laura (CFPB); Frisone, Joseph (CFPB) Subject: Re: HFSC Control of Congressional Records draft response My flight was delayed almost 2 hours. Hopefully things will be better from now on. :) Sent from my BlackBerry 10 smartphone on the Verizon Wireless 4G LTE network. From: Coleman, John (CFPB) Page 1 of 2353 Sent: Monday, April 24, 2017 2:12 PM To: Nedimala, Himali (CFPB); Szybala, Julia (CFPB); Bressler, Steven (CFPB); Tindall, Anne (CFPB) Cc: Coates, Laura (CFPB); Frisone, Joseph (CFPB) Subject: RE: HFSC Control of Congressional Records draft response I think we are all set on this (thanks Laura). From: Nedimala, Himali (CFPB) Sent: Monday, April 24, 2017 4:11 PM To: Szybala, Julia (CFPB); Bressler, Steven (CFPB); Tindall, Anne (CFPB) Cc: Coleman, John (CFPB); Coates, Laura (CFPB); Frisone, Joseph (CFPB) Subject: Re: HFSC Control of Congressional Records draft response Hi all, Just arrived in San Francisco. I think Joe or Laura will need to handle. Thanks, Himali Sent from my BlackBerry 10 smartphone on the Verizon Wireless 4G LTE network. Page 2 of 2353 Document ID: 0.7.1000.15397 From: Bressler, Steven (CFPB) To: Szybala, Julia (CFPB) ; Tindall, Anne (CFPB) Coleman, John (CFPB) Cc: ; Coates, Laura (CFPB) ; Nedimala, Himali (CFPB) ; Frisone, Joseph (CFPB) Bcc: Subject: Re: HFSC Control of Congressional Records draft response Date: Mon Apr 24 2017 10:20:12 EDT Attachments: Thanks Julia! Sent from my BlackBerry 10 smartphone. Page 135 of 2353 From: Rice, Kevin (CFPB) Sent: Friday, March 31, 2017 06:04 PM To: Beaudette, Mark (CFPB) Subject: FW: New Letter from Capitol Hill FYI Kevin J. Rice Assistant General Counsel for General Law and Ethics I Legal Division Office: (202) 435-9524 1 Mobile Consumer Financial Protection Bureau consumerfinance.gov Confidentiality Notice: If you received this email by mistake, you should notify the sender of the mistake and delete the e-mail and any attachments. An inadvertent disclosure is not intended to waive any privileges. From: O'Brien, Patrick (CFPB) Sent: Friday, March 31, 2017 6:00 PM To: Coleman, John (CFPB); Tindall, Anne (CFPB); Bressler, Steven (CFPB); English, Leandra (CFPB); Fulton, Kate (CFPB); Howard, Jennifer (CFPB); Gilford, Samuel (CFPB) Cc: _DL_CFPB Legal Oversight; Galicia, Catherine (CFPB); Manna, Meredith (CFPB) Subject: New Letter from Capitol Hill Page 2062 of 2353 Good evening- We received a letter from HFSC Chairman Jeb Hensarling regarding the Committee's intent to retain control of communications it has with the Bureau to protect them from disclosure under FOIA. A copy of the letter is attached. Thanks Page 2063 of 2353 Document ID: 0.7.1000.156273 From: Szybala, Julia (CFPB) To: France, Elizabeth (CFPB) ; Bressler, Steven (CFPB) ; More, Isabella (CFPB) ; Ploch, Amanda (CFPB) ; Frisone, Joseph (CFPB) Cc: Bcc: Subject: RE: HFSC/FOIA Date: Fri May 05 2017 09:54:16 EDT Attachments: From: France, Elizabeth (CFPB) Sent: Friday, May 05, 2017 9:53 AM To: Bressler, Steven (CFPB); Szybala, Julia (CFPB); More, Isabella (CFPB); Ploch, Amanda (CFPB); Frisone, Joseph (CFPB) Subject: HFSC/FOIA https://www.buzzfeed.com/maryanngeorgantopoulos/house-committee-wants-records-with-treasurysecret?utm_term=.sm9vnzkqe#.qxz4vMPbr Page 161 of 2353 From: O'Brien, Patrick (CFPB) Sent: Friday, March 31, 2017 6:00 PM To: Coleman, John (CFPB); Tindall, Anne (CFPB); Bressler, Steven (CFPB); English, Leandra (CFPB); Fulton, Kate (CFPB); Howard, Jennifer (CFPB); Gilford, Samuel (CFPB) Cc: _DL_CFPB Legal Oversight; Galicia, Catherine (CFPB); Manna, Meredith (CFPB) Subject: New Letter from Capitol Hill Good evening- We received a letter from HFSC Chairman Jeb Hensarling regarding the Committee's intent to retain control of communications it has with the Bureau to protect them from disclosure under FOIA. A copy of the letter is attached. Thanks Page 2057 of 2353 From: O'Brien, Patrick (CFPB) Sent: Friday, March 31, 2017 6:00 PM To: Coleman, John (CFPB); Tindall, Anne (CFPB); Bressler, Steven (CFPB); English, Leandra (CFPB); Fulton, Kate (CFPB); Howard, Jennifer (CFPB); Gilford, Samuel (CFPB) Cc: _DL_CFPB Legal Oversight; Galicia, Catherine (CFPB); Manna, Meredith (CFPB) Subject: New Letter from Capitol Hill Good evening- We received a letter from HFSC Chairman Jeb Hensarling regarding the Committee's intent to retain control of communications it has with the Bureau to protect them from disclosure under FOIA. A copy of the letter is attached. Thanks Page 2197 of 2353 From: O'Brien, Patrick (CFPB) Sent: Friday, March 31, 2017 6:00 PM To: Coleman, John (CFPB); Tindall, Anne (CFPB); Bressler, Steven (CFPB); English, Leandra (CFPB); Fulton, Kate (CFPB); Howard, Jennifer (CFPB); Gilford, Samuel (CFPB) Cc: _DL_CFPB Legal Oversight; Galicia, Catherine (CFPB); Manna, Meredith (CFPB) Subject: New Letter from Capitol Hill Good evening- We received a letter from HFSC Chairman Jeb Hensarling regarding the Committee's intent to retain control of communications it has with the Bureau to protect them from disclosure under FOIA. A copy of the letter is attached. Thanks Page 2202 of 2353 From: O'Brien, Patrick (CFPB) Sent: Friday, March 31, 2017 6:00 PM To: Coleman, John (CFPB); Tindall, Anne (CFPB); Bressler, Steven (CFPB); English, Leandra (CFPB); Fulton, Kate (CFPB); Howard, Jennifer (CFPB); Gilford, Samuel (CFPB) Cc: _DL_CFPB Legal Oversight; Galicia, Catherine (CFPB); Manna, Meredith (CFPB) Subject: New Letter from Capitol Hill Good evening- We received a letter from HFSC Chairman Jeb Hensarling regarding the Committee's intent to retain control of communications it has with the Bureau to protect them from disclosure under FOIA. A copy of the letter is attached. Thanks Page 2233 of 2353 From: O'Brien, Patrick (CFPB) Sent: Friday, March 31, 2017 6:00 PM To: Coleman, John (CFPB); Tindall, Anne (CFPB); Bressler, Steven (CFPB); English, Leandra (CFPB); Fulton, Kate (CFPB); Howard, Jennifer (CFPB); Gilford, Samuel (CFPB) Cc: _DL_CFPB Legal Oversight; Galicia, Catherine (CFPB); Manna, Meredith (CFPB) Subject: New Letter from Capitol Hill Good evening- We received a letter from HFSC Chairman Jeb Hensarling regarding the Committee's intent to retain control of communications it has with the Bureau to protect them from disclosure under FOIA. A copy of the letter is attached. Thanks Page 2293 of 2353 RE: FOIA Request #CFPB-2017-299-F June 22, 2017 Mr. Austin Evers American Oversight 1030 15th Street NW, Suite B255 Washington, DC 20005 Dear Mr. Evers: This letter is an interim response to your Freedom of Information Act (FOIA) request dated May 9, 2017 to the Consumer Financial Protection Bureau (CFPB). Your request sought the following documents: 1) All communications between CFPB and Congressman Jeb Hensarling, any other member of the House Financial Services Committee, or any staff member working for either the House Financial Services Committee or one of its members concerning proposed legislation or administrative actions from January 20, 2017 to the date the search is conducted. 2) All communications relating to the opinion of Committee Chairman Jeb Hensarling that communications between the House Financial Services Committee and federal agencies are not subject to disclosure under the Freedom of Information Act, including but not limited to instructions, directives, or guidance received on this issue from Chairman Hensarling or his staff, as well as internal agency correspondence on the issue. Please provide all responsive records from January 20, 2017 to the date the search is conducted. 3) Any memoranda, policies, rules, protocols, restrictions, directives, guidance, or other guidelines addressing how CFPB responds to FOIA requests that implicate communications with Congress or records created at the request of Congress with no limit to the date range for the search of records. 4.) Records describing the processing of this request, including records sufficient to identify search terms used and locations and custodians searched and any tracking sheets used to track the processing of this request.. Attached to this letter, please find our interim response to your request, which consists of 796 pages that are granted in full. No deletions or exemptions have been claimed on these records. This information was previously provided as part of another FOIA request and determined to be appropriate for public release. Provisions of the FOIA allow us to recover part of the cost of complying with your request. However, since this information was previously provided in response to another FOIA request, there is no charge. For questions concerning our response, please feel free to contact our FOIA Public Liaison at CFPB_FOIA@cfpb.gov or by phone at 1-855-444-FOIA (3642). Sincerely, Raynell D. Lazier FOIA Manager Operations Division on. t r 1700 C S!-eel N v^1 nctor DC 20552 January 23, 2017 The Honorable Mike Crapo Chairman U.S. Senate Committee on Banking, Housing, and Urban Affairs 534 Dirksen Senate Office Building Washington, Dr. 20510 The Honorable Sherrod Brown Ranking Member U.S. Senate Committee on Banking, Housing, and Urban Affairs 534 Dirksen Senate Office Building Washington, D.C. 20510 The Honorable Jeb Hensarling Chairman U.S. House of Representatives Committee on Financial Services 2129 Rayburn House Office Building Washington, D.C. 20515 The Honorable Maxine Waters Ranking Member U.S. House of Representatives Committee on Financial Services 2221 Rayburn House Office Building Washington, D.C. 20515 Dear Chairmen and Ranking Members, Enclosed please find the FY 2016 annual independent audit report completed by KPMG, L.L.P. in accordance with Government Auditing Standards (GAS) issued by the Comptroller General of the United States. This report was commissioned by the Consumer Financial Protection Bureau (CFPB) in accordance with Section 1573 of the Full-Ycar Continuing Appropriations Act of 2011 (Pub. L. 112-10) which amended the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to require the CFPB to order an annual independent audit of its operations and budget. The FY 2016 independent audit evaluated: (1) CFPB's budget process relative to CFPB policies and procedures established over budget formulation, execution, and monitoring; (2) Asset management process relative to its policies and procedures over managing and maintaining accountability of CFPB assets; (3) Frequent Traveler Stipend Program process relative to its policies and procedures over issuing annual stipends to employees for extended overnight travel while on temporary official business; and (4) the corrective actions taken to resolve the findings included in CFPB's FY 2015 Independent Audit of Operations and Budget, also completed by KPMG, L.L.P. CFPB has partially remediated the finding from the 2015 Independent Audit. We will continue our work to fully remediate the finding during the upcoming year. Finally, the CFPB agrees with the two identified conditions around asset management and accompanying recommendations from the 2016 audit report and is already preparing to implement the proposed recommendations for this focus area. We are pleased to report these positive results and will continue to work to improve our processes. Should you have any questions about this report, please do not hesitate to contact me or have your staff contact Matt Pippin or Patrick O'Brien of the Bureau's Legislative Affairs staff Mr. Pippin can be reached (202) 4357552 and Mr. O'Brien can be reached at (202) 435-7180. Si atherme a c a Assistant Director for Legislative Affairs consumerfinance gov Consumer Financial Protection Bureau Independent Audit of Selected Operations and Budget December 16, 2016 KPMG LLP Suite 12000 1801 K Street, NW Washington. DC 20006 Table of Contents EXECUTIVE SUMMARY BACKGROUND 4 OBJECTIVES, SCOPE. AND METHODOLOGY 5 Objectives and Scope 5 Methodology and Approach CFPB' s Budget Process 6 CFPB's Asset Management Process 9 CFPB's Frequent Traveler Stipend Program (FTSIH Process ID Corrective Actions Taken to Resolve the FY2015 Audit Report Findings and Recommendations I1 Finding and Recommendation 13 Appendix A — Additional Improvement Observations 16 Appendix B — CFPB's Management Response 17 "511,1M KPMG LLP te 12000 801 K Street, NW W8shingtor DC 20006 EXECUTIVE SUMMARY December 16, 2016 'Fite Honorable Richard Cordray Director Consumer Financial Protection Bureau 1700 G Street NW Washington. DC 20552 Dear Mr. Cordray: This report presents the results of our work conducted to address the performance audit objectives relative to the Consumer Financial Protection Bureau (hereinafter referred to as "CFPB- or -Bureau.)). Our work was performed during the period July 12, 2016 to December 16. 2016, and our results, reported herein, are as of December 16, 2016. We conducted this performance audit in accordance with Gontrument A editing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain sufficient. appropriate evidence to provide a reasonable basis thr our findings and recommendations based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and recommendations based on our audit objectives. As specified by CFPB, our audit objectives were to evaluate CFPECs (1) budget process relative to its policies and procedures established over budget thnnulation. execution, and monitoring; (2) asset management process relative to its policies and procedures over managing and maintaining accountability of CFPB assets: (3) frequent traveler stipend program process relative to its policies and procedures over issuing annual stipends to employees for extended overnight travel while on temporary official business; and (4) corrective actions taken to resolve the findings and recommendations included in CFPFCs 2015 Indtpcndent Audit qf Seleded Opttrationy and Budget , which "as perfonned by KPMG. Page 1 t ill it I VI I vi r j S I l(FiTAG niss ate., [ Top... TPTTST Tiernan', a S., an tv ',RPM As our report further describes, we identified the following finding as a result of the work performed to meet our audit objectives: A Adherence with asset management policies and procedures needs to be improved and certain additional controls need to be adopted. We recommend that CFPR: 1. Implement controls designed to ensure that bareoded asset tags are affixed to all servers upon acquisition and that they can be physically accessed for scanning purposes during the inventory process. 2. Update inventory observation-related standard operating procedures to provide guidance on how to document the results of the annual inventory, including (I) the date the obsenration(s) was performed. (2) the number and type of discrepancies identified (e.g., items that were thund to be damaged or defective, as well as assets observed to be in use that were not included on the inventory tracking spreadsheet. and (3) disposition or the discrepancies identified, includirm any corrections or adjustments made to the inventory tracking spreadsheet. 3. Reinforce key objectives and procedures in the inventory observation process to help ensure that: a. Al] assets within CFPFcs possession are safeguarded and can be readily located using the inventory tracking spreadsheets; b. Appropriate documentation is maintained regarding the performance of the inventory observations; c. Inventory-related discrepancies arc resolved; and d. Necessary updates are made to inventory listings. 4. Provide training to applicable personnel regarding annual inventory policies and procedures. Through our procedures, we determined that the prior year audit's control deficiency has been partially remediated. Draft procedures and options available to ensure positive destruction of storage that contains personally identifiable information has been completed, but finalization of the procedures and the Chief Information Officer's approval were in progress and not started, respectively, as of the corrective action plan's September 30. 2016 target completion date. We note, however, that MR management provided a Page 2 Iii !II 11 ! ',RPM copy of the final 0413 B Media Sanitization and Destruction Standard, which "as signed by the Acting Chief Information Officer in November, 2016. In addition. we identified certain areas for improx ement, as presented in Append& A — Additional Improvement Observations. We determined that these observations are not reportable findings. However, understanding these observations may be useful to CFPB in strengthening the budget and frequent traveler stipend program practices. This performance audit did not constitute an audit of financial statements ill accordance with Government Auditing Standards' or U.S. Genowlle Accepted Auditing Standards. KPMG LLP was not engaged to and did not render an opinion on the CFPB's internal controls over financial reporting or over financial management systems (for purposes of Office of Management and Budget (OMB) Circular No. A-123, Management's Responsibility 14 hiternal Control, dated December 21, 2004' and OMB Circular No. A123, Appendix D. Compliance with the Federal Finameal Management Act of 1996. dated September 20, 20 I 3). .fhis report is intended solely for the information and use of the Consumer Financial Protection Bureau, and is not intended to be, and should not be. used by anyone other than these specified parties. Sincerely. KePtli(Cz- La' I ()MP Circular A-I23 was updated on July 15, 2016 and retitled Alanagemenrs Respunsibility,fre Eniaprise Risk AI onagenum and 'menial Compel. Among the major changes were the requirement for enterprise risk management. with initial implementation timeframes starting in 2017. Our 2016 audit applied the 2004 Circular A-I 23 in effect at the time of our performance audit. t' I It Id 1\1 es1 Page 3 BACKGROUND The Consumer Financial Protection Bureau (CFPF) was established on July 21. 2010 under 'title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act, Public law No. 111-203) as an independent bureau within the Federal Reserve System (Federal Reserve). The Bureau is an Executive agency, as defined in Section 105 of Title 5, United States Code, with a mission to make consumer finance rules more effective, consistently and fairly enforce those rules, and empower consumers to take more control at er their economic lives. To accomplish its mission, the CEPB seeks to educate consumers, enforce Federal consumer financial laws, and gather and analyze information to better understand consumers, financial service providers and consumer financial markets. he CFPR has a diverse mandate and has assumed roles that were previously covered by seven different agencies responsible for rulemakillil. supervision, and enforcement relating to consumer financial protection. The agencies which previously administered statutes transferred to the CEPS are the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Federal Trade Cornmission, and the Department of Housing and Urban Development. To accomplish its mission, the CFPB developed and is continuing to build a workforce with a broad and diverse depth of public and private industry experience that is spread across the country, l‘ith its headquarters in Washington. D.C. and regional offices in Chicago, New York City, and San Francisco. The CE1313 is organized into six primary divisions: • Consumer Education and Engagement - Works to empower consumers with the knowledge, tools, and capabilities they need in order to make better-informed financial decisions by engaging them in the right moments of their financial lives, while addressing the unique financial challenges faced by Cu specific populations. • Supervision, Fmcmcement. and Fair Lending — Ensures compliance with Federal consunier financial law s by supervising market participants and bringing enforcement actions when appropriate. • Research. Almdeis. and Regulations — Conducts research to understand consumer financial markets and consumer behavior, evaluates whether there is a need for regulation, and determines the costs and benefits of potential or existing regulations. Legal Division - Ensures the Bureau's compliance with all applicable laws and provides advice to the Director and the Bureau's divisions. I d I si 11\13 Page 4 • External 4ffitirs — Manages the Bureau's relationships with external stakeholders and ensures that the Bureau maintains robust dialogue with interested stakeholders to promote understanding, transparency, and accountability. Oper(11101ISViSh111 — Builds and sustains the CFPB 's operational infrastructure to support the entire organization and hears directly from consumers about challenges they face in the marketplace through their complaints, questions, and feedback. OBJECTIN ES, SCOPE, AND METHODOLOGY Objectives and Scope As specified by the CHB, the objectives of our performance audit were to evaluate CFPBB: 1. Budget process relative to its policies arid procedures established over budget formulation, execution, and monitoring: 2 Asset management process relative to its policies and procedures over managing and maintaining accountability of CFI'S assets; 3. Frequent Traveler Stipend Program process relative to its policies and procedures over issuing annual stipends to employees for extended overnight travel while on temporary official business; and 4. Corrective actions taken to resolve the findings and recommendations included in CFPBB 2015 huh:pendent Audit of Selected Operations and Budget. Methodoloz, and Approach We conducted our performance audit in accordance with the performance audit standards in Government Auditing Standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and recommendations based on our audit objectives. Our responsibility is to provide findings and recommendations based on the results of our audit. We believe that the evidence obtained provides a reasonable basis for our finding and recommendations based on our audit objectives. Our methodology consisted of the following bur-phased approach: I. Protect Initiation and Planning — We met with CFPB key personnel to (I)reaffirm CFPB s and our collective understanding of the performance audit objectives and scope, (2) highlight our methodology and approach to meet the audit objectives, (3) request certain information from CFPB needed to perform our audit, and (4) gain an understanding of the status of corrective actions plans related to our prior year Findings and recommendations. Page 5 2. Data Gathering — We in key CFPB personnel to obtain all understanding of processes, controls, and available documentation for each audit objective. For each audit objecti) e, we ( 1 ) researched leading practices. (2) obtained and reviewed relevant documentation, (3) selected samples for detailed testing and further analysis, when appropriate, and (4) documented the work performed and results of our audit procedures. 3. A no/wis Using Established Criteria — Our evaluation criteria was developed from a variety of sources, including requirements and technical guidance published by the Office of Management and Budget (OMB) and used by CFPB as leading practices 2 at the time of our audit (e.g.. OMB Circular No. A-123, A knagemenr s Responsibility fir hilernal Control; OMB Circular No. A-123, Appendix D, Compliatur with the Federal Financial Management Improvement .4c/ I 1, 60996: OMB Circular No. A- Prepuralion, Submission and ExeclatOli of the Budget), and CFPI3is policies and procedures. 4. Finding and Recommendations — The results of our audit work were the basis for our audit finding and recommendations. The finding and recommendations were formally communicated to CFPB management through our Notice of Findings and Recommendations process. We met with CFPB management to discuss our finding. recommendations, the content of the auditors report, and steps related to the final reporting process. The sections below present an overview of each of the audit objectives and the key procedures performed with respect to each area. CFPB 's Budget Process Pursuant to the Dodd-Frank Act ("the Act), the CFPB is funded principally by transfers from the Federal Reserve System, up to a limit set forth in the Act. In addition, pursuant to the Act, the CFPB is also authorized to collect and use, for specified purposes, civil penalties collected from any person or entity in any judicial or administrative action brought under federal consumer financial law. During fiscal years 2015 and 2016, the CFPErs annual transfers from the Board totaled approximately $485 million and S564 million, respectively. 'Die CFPB budget process consists of budget formulation (including budget submission and approval), budget execution, and budget monitoring (including reporting). ilihe Cl/ PF3 and the Federal Reserve have entered into an inter-agency agreement for the continued funding of the operations of the CFPB as set forth in Section 1017(5) of the Dodd-Frank Act. Under this agreement, the Federal = While not required to leading practices. ' See footnote 1. mly with OMB reg a [at ions. CFPB uses ()MB requirements and guidance as indicators of 1 41 1 sl `,1 Page 6 Reserve will transfer funds quarterly to the CFPB based on notification by the Director of the amounts needed. The annual budget formulation process begins approximately I 8 months before the beginning of the fiscal year in which the budget will be executed. This is a collaborative effort between the CF PB's Office of the Chief Financial Officer (OCR)) and CFPR divisions and their offices. To facilitate a standardized and consistent budget formulation process, the OCTO has developed policies and procedures, including templates fir gathering relevant data. The program or division is required to support the amounts requested and link to the CFPB goals set by the Director. The CFPR's Operations Division is responsible for coordinating activities for budget formulation across the Bureau. Working in collaboration with other CFPB divisions, the 0CE0 has piimary responsibility for developing the budget (including staffing estimates) consistent with statutory requirements. performance goals. and CFPB priorities. The CFPB Director has final approval authority over the budget. Once the annual budget is appros cd by the Director, it is distributed internally. communicated to OMB (but not subject to approval by OMB). and posted on the CFPB website. To execute its budget. CFPB exercises administrative control of funds through several measures. A financial plan is developed for each division and distributed at the beginning of each fiscal year. Within the financial plan, each division is allocated a target staffing headcount and personnel and non-personnel funding for the fiscal year. Divisions are expected to adhere to their financial plan allocations and to work collaboratively with the OCR) to request any additional funding anchor staffing if needed throughout the year. The ()CFO has established policies and procedures for the approvals of requisitions and commitments related to CFPB' s funds. To process budgetary transactions and enforce fund controls, CFPB has entered into an inter-agency agreement for accounting services with the U.S. Department of the Treasury's Bureau of the Fiscal Service. Accounting services provided to CFPB include recording financial transactions, such as budget authority, allocations, collections, accounts receivable, commitments, obligations, accruals, accounts payable, disbursements, and journal entries. The Bureau of the Fiscal Service's automated accounting systems provide the budgeting and funds control at various organizational and spending levels, which are established at the request of the customer agency. To complement these fund controls. CFPB has established a number of additional monitoring controls, such as monthly budget execution summary reports, quarterly OCF0 reviews, and the mid-year budget review. In addition, the OCTO has established policies and procedures to II I It I S: I Page 7 perform a quarterly accrual analysis of obligations of $100,000 or greater to determine if goods and services were received. The CFPB has established and maintains an Operating Reserve to protect the Bureau's ability to carry out its authority and ensure the stability of its mission, programs, and ongoing operations in the event of unanticipated and unbudgeted one-time funding needs. This reserve is intended to provide a source of funds internal to the CFPB for unexpected situations, such as sudden increases in expenses, one-time unbudgeted expenses, unanticipated delays in funding, and uninsured losses. The CFPB's Operating Reserve Policy has been implemented in concert with its other governance and financial policies and is intended to support the goals and strategies contained in those related policies and in strategic and operational plans. Additionally, maintenance of such a reserve is expected to minimize or eliminate the need to request fund transfers from the Board of Governors of the Federal Reserve (Board) outside the predetermined schedule, which could place an undue burden on the Federal Reserve System. Our methodology and approach for evaluating the budget process included the following procedures; • Interviewing CFPB key budget personnel within the individual division/program offices and the °CFO regarding formulation, execution, and monitoring; • Reviewing the policies and procedures for budget formulation, execution, and monitoring; • Obtaining a further understanding of the budget formulation, execution, and monitoring process through discussions with management of the OCTO and select CFPB divisions; • Reviewing documents used to support the budget formulation process; • Comparing the CFPB budget formulation, execution, and monitoring process to the applicable requirements and guidance in OMB Circular A-I I as an indicator of leading practice; • Reviewing documents to support the rad that the fiscal year 2016 budget was discussed with the program offices, was reviewed and approved by CFPB's Director, and was widely communicated throughout the organization; • Obtaining an understanding of the budget execution and monitoring process through discussions with 0080 management and select CFPB offices; • Reviewing CFPB's support for its mid-year budget review, and • Reviewing CFPB's use of the Operating Reserve during fiscal year 2016, including its conformance with the Operating Reserve Policy. Our procedures did not identify any findings related to CFPB's budget process. However, as a result of our procedures, we reported an observation for CFPB's consideration in further enhancing its budget process. )I I , I 8.I Page 8 IT I 1 specifically as it relates to its Operating Reserve Policy, which is included in Append& A — Additional Improvement Ohvervations. 'This observation is related to our 2016 audit of selected operations and budget and is presented for the purpose of final izing the results of the audit. CFPR's Asset Management Process CEPB has established asset management policies for both in fonnation technology (IT) and non-IT assets. CEPEVs IT and non-If policies together provide the responsibilities and procedures pertaining to the tracking and physical inventory of ('FPB-owned assets. These policies and procedures outline the process by which physical inventories arc hi be perfonned, newly-acquired assets are to be tagged with a barcode, assets are tracked in a spreadsheet, and lost or stolen assets are disposed of During the annual wall-to-wall inventory process, inventory specialists are equipped with a hand-held barcode scanner and a listing of bareodes organized by building, floors, and hardware models. The handheld bareode scanner stores an Excel spreadsheet file of all property in the accounting records and is updated based on the scanned information. Once the inventory process is complete, the stored in Conflation is aggregated into the Master Inventory Spreadsheet. A Facilities Office (Facilities) Asset Program Manager (APM) oversees non-1T asset management program activities, including creating and maintaining property inventory records in a tracking spreadsheet. The Facilities APM ensures compliance with regulatory and other mandates, including initiation of annual inventories and coordinating excess property requests requiring intergovernmental cooperation. The Technology and Innovation (l'& I) Office Infrastructure Operations Asset Management Team has developed asset management standard operating procedures (SOP) for managing and maintaining CFPB's IT end user assets. These procedures describe inventory and accountability controls for trucking and recording assets throughout the asset 1i recycle. The procedures are used by T&I Asset Management Team members (at both hcadquaners and regional offices), who are responsible for and tasked with managing CEPEEs IT end user assets. End user assets are to be managed and tracked using Remedyforce. T&I server assets are managed and tracked by the Infrastructure Engineering team using an excel spreadsheet. Our methodology and approach for evaluating CEPB's asset management process included the following procedures: • Conducted a kickoff and interviews with CFPB key a, hanagement personnel within the Office of Facilities (Facilities) and the T&I Office: • Reviewed the policies and procedures for asset management, Page 9 I it I SI 41 \1 \. • Obtained an understanding of the asset management proof..ss through discussions with both T&I Office and Facilities Office management • Reviewed documents used to support the asset management process to help us identify risks (inherent, fraud, and control) in the process and the controls designed to mitigate those risks: • Selected and tested a sample of asset additions to determine CEPB's conformance with its asset management-related policies and procedures; • Selected samples and performed observation procedures of both a "book-to-floor and a "floor-tobook" nature to determine the accuracy of CFP13's asset inventory listings; and • Obtained and reviewed the CFPB's June 30, 2016 quarterly submission of the Inventory Tracking Jog (inventory procedure results) for reference and comparison purposes in conjunction with our own bookto-floor and a floor-to-book inventory observation test procedures. Refer to Finding A in the Eluding and Recommendailons section of this report for our finding and recommendations related to our asset management process audit objective. CFPB's Frequent Traveler Stipend Program (FTSP) PrOCCNS CF1313 employees gho travel frequently on temporary official business are eligible to receive an annual stipend if they spend more than 50 nights in eligible temporary duty travel (ETDY) status. The travel period for the program is January 1 through December 31 of each year. Approved travel stipend payments are made through the payroll process, with lump sun, payments to eligible employees included in the payroll for hours worked during the fourth pay period in the year following the travel period. To be considered for the annual stipend employees are required to (1) complete, obtain supervisory approval of, and submit to the OCR) 'fraygl Section a Frequent Traveler Stipend Claim Form detailing the purpose of the travel, the ETD \ travel dates, and the number of qualifying nights of travel, and (2) maintain copies of the claim form and related documentation and comply with other travel-related CFP13 travel policy rccordkeeping requirements, Employees supervisors are required to review, approve, and sign Frequent Traveler Stipend Claim Fonns to ensure that lodging nights claimed are in accordance with the Frequent Traveler Stipend Program policy and that the travel was performed as claimed, The ()CFO Travel Section performs a review of the claim forms and supporting documentation, interprets and applies CFPR's navel policy and frequent traveler stipend program policy requirements, and provides the information necessary for payments to be processed. 'Ric ()CFO in ay request or review additional documentation or in (e.g., travel vouchers) to support the claim or perform post-payment audits, as considered necessary. Page 10 Our methodology and approach for evaluating CFPB s F ESP process included the following procedures: • Conducted a kickoff meeting and interviews with CFPB key FTSP personnel within the OCTO Travel Section; • Reviewed the policies and procedures for the FTSP; • Obtained an understanding of the FTSP process through discussions with members of the OCR) Travel Section; • Reviewed documents used to support the FTSP process to help us identify risks (inherent, fraud, and control) in the process and the controls designed to mitigate those risks; and • Selected and tested a sample of FTSP claim forms to determine conformance with CT PBS travel stipend policies and procedures Our procedures did not identify any findings related to CFPECs FTSP process. However, as a result of our procedures. we reported in Appendix A — Additional Improvement Observation, an observation for CFPB's consideration in further enhancing its FTSP process. This observation is related to our 2016 audit of selected operations and budget and is presented for the purpose of finalizing the results of the audit. Corrective Actions Taken to Resolve the FT2015 Audit Report Findings and Recommendations CFPR developed corrective action plans to address the prior year recommendations included in the 2015 Indtpendent Audit of Operations and Budget report.' Our methodology and approach for the corrective actions process included the following procedures: • Reviewed the finding and related recommendations included in the 2015 Independent A iit of Operations and Budget, which was defined as deficiency in internal control; • Obtained and reviewed the corrective action plans (CAP) developed by CFPB for the recommendations mentioned above; • Reviewed documentation supporting the CFPB actions specified in the CAP and how the actions taken address the prior year findings. The table below depicts the status of the prior year recommendations based on the results of our 2016 performance audit procedures: 2015 Finding 2015 Finding Type I nformation Privacy policies and procedures need to be updated I 2015 Independent Andit Control Dcfi ci eiic Rake It I: , 2016 Status Partially Remediated as of September 30,2016 — We noted Decr,nI,cr18. 2015 81 Page I I t` I 1 2015 Finding 2015 Finding Type 2016 Status that the data cataloguing coiTective actions had been completed as of the CAEs September 30. 2016 planned correction date. I lowever, the corrective actions related to data destruction had not been completed and implemented as or September 30, 2016. Draft procedures and options available to assure positive destruction of storage that contains personally identifiable information had been completed, but finalization of the procedures and Chief In Officer approval were in progress and not started, respectively, (We note that CFPB management provided a copy of the final CFPB Media Sanitization and Destruction Standard. which was signed by the Acting Chief Information Officer in N(lvember, 2016.) Page 12 Finding and Recommendations Our 2016 performance audit identified one internal control deficiency' finding, which is presented below. We discussed the results of the perfonnance audit with CFPE315, CFO and audit focus area leads. We held an exit conference on December 15,2016, A. Asset management annual inventory policies and procedures need to be reinforced and certain additional controls need to be adopted Buckgivund: Periodic inventories are not only a sign of good stewardship of public funds and assets, but they are a required and intrinsic component of Cl Plc s Asset Management policy'. Annual inventories are conducted at a specified time during each fiscal year and involve a full inventory of all assets identified within the Bureau. CFPW s asset tracking system is reliant on a set of unique CFPB barcoded asset tags that are placed on each item. During the annual inventory process, CFP13 manually scans the barcoded asset tag affixed to every item within the facility. The results are then uploaded into a tracking spreadsheet, and items arc grouped by asset types (e.g., facilities and technology and innovation), Condition: As a result of test procedures performed over the (21115B's FY 2016 inventory process, we noted the following conditions: Controls over the identification and documentation of IT-related inventory items are not operating effectively to provide reasonable assurance that all IT assets are properly identified, tagged, and logged accurately onto the inventory tracking spreadsheet. From a sample of 63 items selected for testing, we noted 7 inventory recordkeeping discrepancies, including instances where an asset tau was missing from an asset, multiple asset tags with different numbers were affixed to the same asset, assets were traceable to the inventory spreadsheet using their serial numbers but the asset tag numbers affixed to the assets were not recorded on the inventory spreadsheet, and an asset that was in service had been inadvertently deleted from the inventory spreadsheet. GO VCIMITC)11 .4ueliting Stanch( id() 20!' Rex is on Paragraph 6.21. "In performance audils. a deficiency control csists when the design or operation of a Centre! does not allow management or employees. in the tiunnal course their assigned functions. to proem. or detect and correct (I) impairments of fifteen f MOSS or efficiency of tiperattoii misstatements in financial or pertimuance information. of (3) noncompliance with provisions of laws, regulatiorls. contracts. grant agreements on a timely basis. A deficiency in design exists when (a) a control necessary to meet Ore control objective missing or (b) an existing control is not properly designed so that. ey fin if the control operates as designed, the control objectis not met.- " (TDB Seri ice Desk Asset Management Standard Operating Procedure - Section 3.1 (Purpose of the InventoB). Page 13 1111 It 1 \ 1 1 \, 1 II\ 1 \ In addition, we noted 215 network items that were identified by• serfill numbers on the fiscal year 2016 inventory tracking spreadsheet; however, there were no asset tae numbers associated with these assets on the spreadsheet. CFPFt's IT and non-1T asset management policies and procedures lack guidance related to how the results of the annual inventory, including discrepancies noted and adjustments made to the inventory tracking spreadsheet, are to be documented. Consequently, upon inspection of CFPB's fiscal year 2016 inventory observation results, we were not able to determine: a When the inventory observations were performed; b The number and type of discrepancies found (e.g., assets that could not be located or additional items found during the inventory that were not included on the in tracking spreadsheet); and c. Actions taken to resolve any discrepancies noted. Criteria: • CFPB Service Desk Asset Management Standard Operating Procedure - Section 3.1 (Purpose of the Inventory). • United States Government Accountability Office (GAO) Standards for Internal Control in Me Federal Government Principles (September 2014) Section 10.03. Design of Appropriate Control Activities and Section 12.02, Documentation of Responsibilities through Policies. Cause and Flject: The CFPWs inventory process is manually-intensive in nature and prone to errors that may not be prevented or detected and corrected on a timely basis. CFPB's inventory policies and procedures do not include specific policies and procedures to direct staff members on the documentation requirements over the performance of the annual inventory, including identifying discrepancies found during the inventory process, and corrective actions taken as a result of the annual inventory. If not corrected, these control deficiencies may prevent the Bureau from effectively managing and safeguarding its inventory assets. Rermmtnendations: To improve controls over the asset management and annual inventory processes, we recommend that (APB: a. Implement controls designed to ensure that barcoded asset tags are affixed to all servers upon acquisition and that they can be physically accessed for scanning purposes during the inventory process. b Update inventory observation-related standard operating procedures to provide guidance on how to document Ow results of the annual inventory, including (1) the date the observation(s) was performed, Page 14 I It I\ ;. 1 \ I (2) the number and type of discrepancies identified (e.g., items that were Ruud to be damaged or defective, as well as assets obsened to be in use that were not included on the inventory, tracking spreadsheet, and (3) disposition of the discrepancies identified, including any corrections or adjustments made to the inventory tracking spreadsheet. c. Reinforce key objectives and procedures in the inventory observation process to help ensure that: • All assets within CFPB's possession are safeguarded and can be readily located using the inventory tracking spreadsheets; Appropriate documentation is maintained regarding the performance of the inventory ohscrvations d. • Inventory-related discrepancies are resolved; and • Necessary updates are made to inventory listings. Provide training to applicable personnel regarding annual inventory pol ci es and procedures. Page 15 (till 1 I 31 1 Appendix A Appendix A - Additional Improvement Observations Our current audit procedures did not identify any findings related to the budget or Frequent Traveler Stipend Program (FI SP) processes. However, as a result of our procedures, we are reporting certain observations for CFPB's consideration in further enhancing these processes. These observations are related to our 2016 audit of selected operations and budget and are presented for the purpose of finalizing the results of that audit. Our additional observations are as follows: I. Budget Function: We reviewed documentation related to the CFPB's use of the Operating Reserve during fiscal year 2016 for conformance to the Operating Reserve Policy. C111)B could benefit from introducing enhancements to the Operating Reserve Policy in the form of additional clarity in the guidance related to (I) the frequency of recalculating the amount of the reserve from year to year, and (2) documentation requirements when the reserve is used. Specifically, CFPB may consider: Developing Standard Operating Procedures (SOP) complementing the existing policy to more clearly specify the required frequency of and the method and inputs for calculating the level or range of the amount of the reserve, including the Bureau's considerations in developing the relevant inputs associated with the current year's or near-future budgetary resources. b. Developing an SOP to complement the existing policy that specifies the documentation requirements related to (i) support for the case-by-case justifications for requests to utilize operating reserve funds. and (ii) the form or method for documenting the Director's approval of the use of the reserve when its use is expected to increase the Bureau's approved annual budget. 2 Frequent Thaveler Stipend Program: We reviewed CFPB's eligibility determinations resulting in fiscal year 2016 FTSP payments being made to eligible employees for conRrmance to the FTSP policy. CFPB could benefit from introducing improvements over the FTSP policies and procedures. Specifically. CFPB may consider: a. Implementina. physical and electronic access controls around the OCFO Travel Section's FTSP claims review spreadsheet to help ensure that only authorized individuals with a valid need can access the document and enter or change information. b. Issuing an SOP that complements the existing Frequent Traveler Stipend Program policy to more clearly describe the level of review expected of the employees supervisors when reviewing and approving an employee's Frequent Traveler Stipend Program claim fonn prior to its submission to the OCR) Travel Section for processing. tI I I I H Page 16 I1 Appendix B Appendix B — CFPB's Management Response Management Responses We provided a draft of this report to CFPB management for review and comment. CFPB. s responses to our finding and recommendations are included in a letter from CFPFis Acting Chief Financial Officer dated December 16. 2016. CFPB's responses were not subjected to the auditing procedures applied in the performance audit objectives relative to CFPB: accordingly, we expressed no opinion on these responses. I 1\1 I 1 MI Page 17 Appendix B December 16, 2016 Mr. Jorge Asef-Sargent KPMG, Offii K Street, NW Suite 12000 Washington, DC 20006 Dear Mr. Asef-Sargcnt, Thank you fur the opportunity to review and comment on KPMG, L.L.P.'s report "Consumer Financial Protection Bureau Independent Audit of Selected Operations and Budget," for Fiscal Year myth, dated December 16, 2016. We have reviewed the audit report and concur with the recommendations contained therein. As noted in the report, CFPB has partially remediated the finding from the 2015 Independent Audit conducted by your firm. We will continue our work to fully remediate the finding during the upcoming year. We agree with the two identified conditions and accompanying recommendations in the 2016 audit repot. My colleagues are already preparing to implement the proposed recommendations from the Asset Management audit focus area. The comments on the recommendations in this letter provide additional detail on planned actions to enhance the processes and controls in the Asset Management audit focus area. In an effort to enhance the Bureau's operations and to address the performance improvement opportunities in the audit focus areas that KPMG studied, the Bureau will evaluate how best to incorporate the obsented opportunities for improvement in the audit focus areas into the existing policies and procedures of these audit focus areas. Thank you again for your review. Sincerely, Isf Elizabeth Reilly Acting Chief Financial Officer Appendix B Auditor's Condition 1: CFPB's Asset Management Function Condition: The Auditor noted that controls over the identification and documentation of IT-related inventory items are not operating effectively to provide reasonable assurance that all IT assets are properly identified, tagged, and logged accurately onto the inventory tracking spreadsheet. From a sample of items selected for testing, the Auditor noted several inventory record keeping discrepancies. CFPB Response: The CFPB agrees with the Condition described above. Auditor's Condition 2: CFPB's Asset Management Function Condition: The Auditor noted that CFPB's IT and non-IT asset management policies and procedures lack guidance related to how the results of the annual inventory, including discrepancies noted and adjustments made to the inventory tracking spreadsheet, are to be documented. Consequently, upon inspection of CFPB's fiscal year 2016 inventory observation results, the Auditor was not able to determine: When the inventory observations were performed; The number and type of discrepancies found (e.g., assets that could not be located or additional items found during the inventory that were not included on the inventory tracking spreadsheet); and Actions taken to resolve any discrepancies noted. CFPB Response: The CFPB agrees with the Condition described above. Auditor's Recommendation(s) Related to Conditions 1 and 2: CFPB's Asset Management Function Recommendation: The Auditor recommends that CFPB: i. Implement controls designed to ensure that barcoded asset tags are affixed to all servers upon acquisition and that they can be physically accessed for scanning purposes during the inventory process. 2. Update inventory observation-related standard operating procedures to provide guidance on how to document the results of the annual inventory, including (4) the date the observation(s) was performed, (2) the number and type of discrepancies identified (e.g., items that were found to be damaged or defective, as a well c3)as assets observed to be in use that were not included on the inventory tracking spreadsheet), disposition of the discrepancies identified, including any corrections or adjustments made to the inventory tracking spreadsheet. 3. Reinforce key objectives and procedures in the inventory observation process to help ensure that: • All assets within CFPB's possession are safeguarded and can be readily located using the inventory tracking spreadsheets; • Appropriate documentation is maintained regarding the performance of the inventory observations; • Inventory-related discrepancies are resolved; and • Necessary updates are made to inventory listings. 4. Provide training to applicable personnel regarding annual inventory policies and procedures. CFPB Response: The CFPB agrees with the Auditor's recommendations. In FY 2017, MI will continue to refine its asset management process. We will work to consolidate the T&I inventow, as well as input all T&I assets into our asset management database. Consolidation of the inventow will provide one process for tracking and accounting for all equipment as it is received. Consolidation will also ensure that the inventory details are readily available and discrepancies easily identified. 07,t1I1ornati of -the 11iii1ti 't1it 11(.g 2051.5 February 27, 2017 The Honorable Richard Cordray Director Bureau of Consumer Financial Protection 1700 G Street, NW Washington, D.C. 20552 Dear Director Cordray: Recent reports suggest that you use a private device for official communications in circumvention of the federal recordkeeping laws.' Specifically, the Bureau of Consumer Financial Protection ("Bureau") produced records in response to a Freedom of Information Act ("FOIA") request that indicate you sent and received text messages to a number associated with a personal, non-government device.2 Provisions in the Federal Records Act (Pub. L. 113-187) specifically bar federal employees from conducting official business over non-official electronic accounts, unless that material is properly filed in an official account within 20 days, a requirement in place in order to properly preserve and maintain those records.3 Federal employees who violate this disclosure requirement are subject to disciplinary action under chapter 75 of titles, United States Code. The Committee on Financial Services and the Committee on Oversight and Government Reform write to ensure that you are complying in full with federal recordkeeping laws and that you are not deliberately conducting official business through private channels. It is important that you comply with these laws so that your actions as Director of the Bureau may be subject to review by Congress and the public. Accordingly, by no later than March 13, 2017, please provide: See Justin Caruso, CPUB Head, Cot-dray Used Private Device, Didn't Create Records Of Messages, THE DAIIN Cal ,IJ(a (Jan, 23, 2017), h tty://d a ilv caller . com /2017/01/23/exclusive-cfpb-head-cordravused -p ri ya tedevice didnt-cre ate-records-Ulan essa ges/. 2 The Daily Caller reproduced the Bureau's September 29, 2016 response to an August 31, 2016 MIA request wherein the Bureau notes no text or SMS messages were located after searching your government devices. Id. However, a search of your staffs government issued devices located messages sent to and from your personal device which the Bureau confirmed in a letter dated November 16, 2016 and reproduced in the report by the Daily Caller. Id, 3 See 44 TJSC. § 2911(a). The Hon Richard Cordray February 27, 2017 Page 2 of a 1. A list of all phone numbers used by you from January 2011— present to transact government business, and the service providers associated with each number; 2. A list of all non-governmental email accounts used by you from January 2011 — present to transact government business; 3. The number of emails sent by you using a non-governmental email account to the Chief of Staff or any Assistant, Associate, or Deputy Director of the Bureau from January 2011.— present; 4. The number of emails received by you using a non-governmental e-mail account from the Chief of Staff or any Assistant, Associate, or Deputy Director of the Bureau from January 201.1 — present; A description of the steps you took to comply with all applicable federal recordkeeping laws in light of your apparent use of non-governmental email for official purposes; and 6. Copies of the FOIA requests referenced in the press report titled CFPB Head Cord ray Used Private Device, Didn't Create Records of Messages, The Daily Caller (Jan. 23, 2017), and unredacted copies of all records responsive to those requests. If you have any questions regarding this request, please contact Elie Greenbaum of the Committee on Financial Services staff at (202) 225-7502 or Corey Cooke of the Committee on Oversight and Government Reform staff at (202) 225-5074. Sincerely, JEB H SAR ING Chairman Committee on Financial Services JASON CHAFFETZ Chairman Committee on Oversight and Government Reform ANN WAGNER Chairman Subcommittee on Oversight and Inve JIM ei0..DAIN< Chairman Subcommittee on Health Care, Benefits, and Administrative Rules tions cc: The Hon. iNdaxine Waters, Ranking Member Committee on Financial Services The Hon. Elijah Cummings, Ranking Member Committee on Oversight and Government Reform The Hon. Al Green, Ranking Member Subcommittee on Oversight and Investigations Committee on Financial Services The Hon. Raja Krishnamoortbi, Ranking Member Subcommittee on Health Care, Benefits, and Administrative Rules Committee on Oversight and Government Reform Committee Records Request Instructions 1. In complying with this request, you are required to produce all responsive records that are in your possession, custody, or control, whether held by you or your past or present agents, employees, and representatives acting on your behalf You shall also produce records that you have a legal right to obtain, that you have a right to copy or to which you have access, as well as records that you have placed in the temporary possession, custody, or control of any third party. Requested records shall not be destroyed, modified, removed, transferred, or otherwise made inaccessible to the Committees. 2. In the event that any entity, organization, or individual denoted in this request has been, or is also known by any other name than that herein denoted, the request shall be read also to include that alternative identification. 3. A covey letter shall be included with each production and include the following: a. A list of each piece of media included in the production with its unique production volume number. b. A list of custodians, identifying the Bates range for each custodian. c. The time zone in which the emails were standardized during conversion. d. All Bates Prefix and Suffix formats for records contained in the production. 4 Records shall be produced to the Committees on one or more CDs, memory sticks, thumb drives, or USB hard drives. Production media shall be labeled with the following information: Case Number, Production Date, Producing Party, Bates Range. 5 All records shall be Bates-stamped sequentially and produced sequentially. 6. Records produced shall be organized, identified, and indexed electronically. Only alphanumeric characters and the underscore ("_") character are permitted in file and folder names. Special characters are not permitted. Electronic record productions shall be prepared according to the following stand Ards: a. All submissions must be organized by custodian unless otherwise instructed. Page i o x b Productions shall include: 1. A Concordance Data (.DAT) Load File in accordance with metadata fields as defined in Appendix A. 2. A Standard Format Opticon Image Cross-Reference File (OPT) to link produced images to the records contained in the .DAT file. 3. A file (can be Microsoft Word, Microsoft Excel, or Adobe PDF) defining the fields and character lengths of the load file. c. The production format shall include images, text, and native electronic files. Electronic files must be produced in their native format, i.e., the format in which they are ordinarily used and maintained during the normal course of business. For example, a Microsoft Excel file must be produced as a Microsoft Excel file rather than an image of a spreadsheet. NOTE: An Adobe PDF file representing a printed copy of another file format (such as Word Document or V1/4/ebpage) is NOT considered a native file unless the record was initially created as a PDF. 1. Image Guidelines: 1. Single or multi page TIFF files. 2. All TIFF images must have a unique file name, be., Bates Number 3. Images must be endorsed with sequential Bates numbers in the lower right corner of each image. 2 Text Guidelines: 1. All text shall be produced as separate text files, not inline within the .DAT 2. Relative paths shall be used to link the associated text file (FIELD: TEXTPATH) to the record contained in the load file. 3. Associated text files shall be named as the BEGBATES field of each record. 3 Native File Guidelines: 1. Copies of original email and native file records/attachments must be included for all electronic productions. Page u of x 2. Native file records must be named per the I3EGBATES 3 Relative paths shall be used to link the associated native file (FIELD: NATIVEFILELINK) to the record contained in the load file. 4. Associated native files shall be named as the BECrBATES field of each record. d All record family groups, i.e. email attachments, embedded files, etcshould be produced together and children files should follow parent files sequentially in the Bates numbering. e. Only 1 load file and one Opticon image reference file shall be produced per production volume. All extracted text shall be produced as separate text files. g. Record numbers in the load file should match record Bates numbers and TIFF Me names. h. All electronic record produced to the Committees should include the fields of metadata listed in Appendix A. 9. Records produced to the Committees shall include an index describing the contents of the production. To the extent that more than tme CD, hard drive, memory stick, thumb drive, box, or folder is produced, each CD, hard drive, memory stick, thumb drive, box, or folder shall contain an index describing its contents. 10 Records produced in response to this request shall be produced together with copies of file labels, dividers, or identifying markers with which they were associated when the request was served. 11 When you produce records, you shall identify the paragraph or number in the Committees' request to which the records respond and add a metadata tag listing that paragraph or number (see Appendix A). 12 Four sets of records shall be delivered, two sets to the Majority Staff and two sets to the Minority Staff of the Committees. To the extent the Minority Staff of the Committees does not have an electronic record review platform, records shall be produced to the Minority Staff in searchable PDF format and shall be produced consistent with the instructions specified in this schedule to the maximum extent practicable. Page in of x 13. Production media and produced records shall not be encrypted, contain any password protections, or have any limitations that restrict access and use. 14. It shall not be a basis for refusal to produce records that any other person or entity also possesses non-identical or identical copies of the same records. 15. In the event that a record is withheld, you shall provide a log containing the following information concerning any such record: (a) the reason why the record was withheld; (b) the type of record; (c) the general subject matter; (d) the date, author and addressee; (e) the relationship of the author and addressee to each other; and (0 any other description necessary to identify the record and to explain the basis for not producing the record. If a claimed privilege applies to only a portion of any record, that portion only should be withheld and the remainder of the record should be produced. As used herein, "claim of privilege" includes, but is not limited to, any claim that a record either may or must be withheld from production pursuant to the constitution or any statute, rule, or regulation. Any objections or claims of privilege are waived if you fail to provide an explanation of why full compliance is not possible and a log identifying with specificity the ground(s) for withholding each withheld record prior to the request compliance date. b In complying with the request, be apprised that (unless otherwise determined by the Committees) the Committees do not recognize: any purported non-disclosure privileges associated with the common law including, but not limited to, the deliberative-process privilege, the attorney-client privilege, and attorney work product protections; any purported privileges or protections from disclosure under the Freedom of Information Act; or any purported contractual privileges, such as nondisclosure agreements. c. Any assertion by a request recipient of any such non-constitutional legal bases for withholding records or other materials shall be of no legal force and effect and shall not provide a justification for such withholding or refusal, unless and only to the extent that the Chairmen of the Committees have consented to recognize the assertion as valid. 16 If any record responsive to this request was, but no longer is, in your possession, custody, or control, or has been placed into the possession, custody, or control of any third party and cannot be provided in response to this request, you should identify the record (stating its date, author, subject and recipients) and explain the Page iv of x circumstances under which the record, ceased to be in your possession, custody, or control, or was placed in the possession, custody, or control of a third party. 17. If any record responsive to this request was, but no longer is, in your possession, custody or control, state: a how the record was disposed of; b the name, current address, and telephone number of the person who currently has possession, custody or control over the record; c. the date of disposition; d the name, current address, and telephone number of each person who authorized said disposition or who had or has knowledge of said disposition. 18. If any record responsive to this request cannot be located, describe with particularity the efforts made to locate the record and the specific reason for its disappearance, destruction or unavailability. 19. If a date or other descriptive detail set forth in this request referring to a record is inaccurate, but the actual date or other descriptive detail is known to you or is otherwise apparent from the context of the request, you are required to produce all records which would be responsive as if the date or other descriptive detail were correct. 29 This request is continuing in nature and applies to any newly-discovered information. Any responsive record not produced because it has not been located or discovered by the return date shall be produced immediately upon subsequent location or discovery. 21. TS properties or permissions are modified for any records produced electronically, receipt of such records will not be considered full compliance with the request. 22. Upon completion of the record production, you shall submit a written certification signed by you or your counsel, stating that: a. a diligent search has been completed of all records in your possession, custody, or control which reasonably could contain responsive records; b records responsive to the request have not been destroyed, modified, removed, transferred, or otherwise made inaccessible to the Committees since the date of receiving the Committees' request or in anticipation of receiving the Committees' request, and Page v of x c. all records located during the search that are responsive have been produced to the Committees, identified in a log provided to the Committees, as described in (15) above, or identified as provided in (16), (17) or (18) above. 23 When representing a witness or entity before the Committee(s) in response to a record request or request for transcribed interview, counsel for the witness or entity must promptly submit to the Committee(s) a notice of appearance specifying the following: (a) counsel's name, firm or organization, and contact information; and (b) each client represented by the counsel in connection with the proceeding. Submission of a notice of appearance Constitutes acknowledgement that counsel is authorized to accept service of process by the Committee(s) on behalf of such client(s), and that counsel is bound by and agrees to comply with all applicable House and Committee rules and regulations. Page vi of x Committee Records Request Definitions . The term "records" means any written, recorded, or graphic matter of any nature whatsoever, regardless of how recorded or preserved, and whether original Or copy. 2. The term "records in your possession, custody or control" means (a) records that are in your possession, custody, or control, whether held by you or your past or present agents, employees, or representatives acting on your behalf; (b) records that you have a legal right to obtain, that you have a right to copy, or to which you have access; and (c) records that have been placed in the possession, custody, or control of any third party. 3. The term "communication" means each manner or means of disclosure or exchange of illumination, regardless of means utilized, whether oral, electronic, by document or otherwise, and whether in an in-person meeting, by telephone, facsimile, e-mail (desktop or mobile device), text message, MMS or SMS message, regular mail, telexes, releases, or otherwise. 4. The terms "and" and "or" shall be construed broadly and either conjunctively or disjunctively to bring within the scope of this request any information which might otherwise be construed to be outside its scope. The singular includes plural number, and vice versa. The masculine includes the feminine and neuter genders. 5 The terms "person" or "persons" means natural persons, firms, partnerships, associations, corporations, subsidiaries, divisions, departments, joint ventures, proprietorships, syndicates, or other legal, business or government entities, and all subsidiaries, affiliates, divisions, departments, branches, and other units thereof. 6 The terms "pertaining to," "referring," or "relating," with respect to any given subject, means anything that constitutes, contains, embodies, reflects, identifies, states, refers to, deals with or is in any manner whatsoever pertinent to that subject. Page vii of x Appendix A Production Load File Formatting and Delimiters: The first line shall be a header row containing field names. Load file delimiters shall be in accordance with the following: Text Qualifier: h (254) o Field Separator: 11 (20) Multi-Value Separator: ; (59) o Newline: \n (10) • • o Nested Value Separator: \ (92) All Date! Time Data shall be split into two separate fields (see below). o Date Format: mm/dd/yyyy i.e., 05/18/2015 o Time Format: hh:mm:ss A — i.e., 08:39:12 AM Required Metadata Fields Field Name Sample Data FIRSTBATES LASTRATFS EDC0000001 EDC000000 I ATTACHRANGE Description First Bates number or native tile record/email Last Bates number of native file record/email **The LASTBATES field should be populated ror single page records/cmails. EDC0000001 - EDC00000 IS Bates number of the First page or the parent record to the Bates nurnber of the last page of the last anachnicia "child" record REGATTACH ENDATTACH CUS YODIAN E1)C000000 I EDC0000015 Sinith„Iohn First Bates number or attachment range Ibis( Bates number of attachment range Email: mailbox where the email resided Attachment: Individual from whom the record originated FROM John Smith Email: Sender Native: Author(s) of record **scnn-colon should be used to separate muniple entries TO Coltman, Janice( LeeW Imailto:LeeWip,MSN.coml Recipient(s) **semi-colon should be used to separate multiple entries CC Frank Thompson [mailto: frank Thompsone&cdt.conl] Carbon copy recipient(s) **semi-colon should be used to separate multiple entries BCC John Cain Blind carbon copy recipient(s) **semi-colon should be used to separate multiple entries SUBJECT Board Meeting Minutes DATE SENT 10/12/2010 TimitSENT/TINIE 07:05 PM GM'l Email: Subject line of the email Native: Title of record (if available) Email: Date the email was Sent Native: (empty) Email: Time the email was sent/ 'lime zone in which the ()mails were standardized during conversion. Native: (empty) **/ rhis data must be a separate field and cannot be combined with the DATE _SENT field _ZONE TIME_ ZONE NA II VEHLELINK GMT DSO? 1 ItDC0000001.rnsg [lie time zone in which the emails were standardized during conversion. Email: tit11112 zone Native: (empty) lyperlink to the cma or native lile record *The linked file must he named per the FIRSTRATES number Page viii of x i MIME TYPE MSG FILE ExmN MSG AUTHOR John Smith DATE CREATED I0/10/2010 TIME CREATED 10:25 AM DATE MOD 10/12/2010 TimE. MOD 07:00 PM DATEL ACCESS') 10(12/2010 TIME ACCESS]) 07:00 PM MUNTED_DATE In/12/2010 NAT1VEHLESIZE 5,952 PG(301INT PAT I1 I filSharedilimithilOctober Agenda.doe INTEILEPAT1 I Personal Foldersineleted Items l Board Meeting Minutes.insc, <000805c2e7lb575977050S ch 8306d I (a),MSN> d131dd0265e6ifec4693d9a0 69 8aff95c 2leab58712467eab40041583 eb 8tb7689 CEA I \AAA0001.txt INTMSGID MD5HASIT I EXIPATII NATIVI(EILEPAI II lNATIVESu IliSSAGIf I . g, iNMIVESYVI TACIIMILlaa I. doe I IAN DWRITTEN YES RI:DACTED YI:S The content type of an Email or native file record as identified/extracted from the header The file type extension representing the Email or native file record; will van, depending on the email forinat Email: (empty) Native: Author of the record Email: (empty) Native: Date the record was created Email: (empty) Native: Time the record was created This data must be a separate field and cannot be combined with the DATE CREATED field Email: (empty) Native: Date the record was last modified Email: (empty) Native: Time the record was last modified **This data must be a separate field and cannot be combined w itil the DATE MOD field Email: (empty) Native: Date the record was last accessed Email: (empty) Native: Time the record was last accessed **This data must he a separate field and cannot he combined with the DATE ACCESSD field Email: (empty) Native: Date the record was last printed Size of native file record/email in 1613 **Use only whole numbers Number of pages in native tile reciirdiemad Email: (empty) Native: Path where native file record was stored including or file name Email: original location of email including original file name Native: (empty) Email: Unique Message ID Native: (empty) MD5 flash value of the record Path to the record's text file that contains extracted text to be used for processing. Every record has a relative path to its text file ill this field. Note: These paths may also be fully qualified; and thus do not have to be relative. Path to the record's native file. Every record has a relative path to its native file in this field. Note: These paths may also be fully qualified; and thus do not have to be relative. Field should be marked "YES" if the record has any handwritten notes or other text that is not contained in the text file Field should be marked "YES" i tithe record contains ally redactions, "NO" otherwise Metadata Fields Required Upon Specific Request Page ix of x FAGS Firstfiassaesponsive; FirstPass ForQC FOLDERS John DoeDocs1Firstfiass If requested — a list of tags assigned to the record. Multiple tags are separated by the multi-value separator, for example: "A; 11, Ch, and nested tags are denoted using the nested value separator, for example: "X1Y12.". Tags for attachments will appear under the custom field "ATTACIIMENT TAGS". If requested — a list of folders of vtfiich the record is a part. Multiple thlders are separated by the multi-value separator, for example: "A: 13; C", and nested folders are denoted using the nested value separator, for example: "X\ Y\7'' Folders for will appear under the custom field at "ATTACHMENT FOLDERS", Page x of x JED HENSARUNG TX CHAIRMAN United *tam house of Representatincs MAXINE WATERS CA RANKING MEMBER Committee on financialerUices 2129 Rayburn house Office Builefing bilashingtoit OtE. February 27, 2017 The Honorable Richard Cordray Director Bureau of Consumer Financial Protection 1700 G Street, NW Washington, D.C. 20552 Dear Director Cordray: The Committee continues to review the Civil Penalty Fund ("Fund") and "payments to the victims of activities for which civil penalties have been imposed under the Federal consumer financial laws" made from the Fund.1 The Consumer Financial Protection Bureau ("Bureau") recently reported that the Bureau collected $182.1 million in 2016 and that $170 million remains available for future allocations from the Fund.2 To allow the Committee to carry out its oversight responsibilities under the House Rules,3 please provide by not later than March 13, 2017: 1. All records identifying the victim classes that received or are eligible to receive disbursements from the Bureau's May 27, 2016 Fund allocation; 2. All records discussing the basis and rationale for determining the victim classes that received or are eligible to receive disbursements from the Fund pursuant to allocations made on May 27, 2016; 3. All records identifying (a) the amount allocated to each alleged victim, (b) the amount of uncompensated harm for each alleged victim, and (c) the basis on which the Bureau calculated such amounts: and 4. All communications between the Bureau and its third-party administrators that distribute Fund payments allocated on May 27, 2016. Dodd-Frank Wall Street Reform and Consumer Protection Act § 101750(24 12 U.S.C. § 5497(d)(2). The Committee requested records on May 26, 2016, and the Bureau has failed to provide a full and complete response to that request. See Letter front Sean Duffy, Chairman, Subcomm. on Oversight and Investigations of the H. Comm. on Fin. Serv., to Richard Cordray, Dir., Consumer Fin. Prot. Bureau (May 26, 2016). The information requests contained herein are in addition to, and in no way supersede or replace, the Committee's May 26, 2016 records requests.: all records requested by the Committee should be fully and promptly produced. 2 See CONSUMER FIN. PROT. BUREAU, FISCAL YEAR 2016 FINANCIAL REPORT 30. 35 (2016). Rule X. Rules of the House of Representatives. 115th Cong. The Hon. Richard Cordray February 27, 2017 Page 2 of 2 If you have any questions regarding this request, please have your staff contact Elie Greenbaum of the Committee staff at (202) 225-7502. Si oe WAGNEr— Chairman Subcommittee on Oversight and Investigations cc: The Hon. Al Green, Ranking Member Committee Records Request Instructions 1. In complying with this request, you are required to produce all responsive records that are in your possession, custody, or control, whether held by you or your past or present agents, employees, and representatives acting on your behalf. You shall also produce records that you have a legal right to obtain, that you have a right to copy or to which you have access, as well as records that you have placed in the temporary possession, custody, or control of any third party. Requested records shall not be destroyed, modified, removed, transferred, or otherwise made inaccessible to the Committee. 2. In the event that any entity, organization, or individual denoted in this request has been, or is also known by any other name than that herein denoted, the request shall be read also to include that alternative identification. 3. A cover letter shall be included with each production and include the following: a. A list of each piece of media included in the production with its unique production volume number. b. A list of custodians, identifying the Bates range for each custodian. c. The time zone in which the emails were standardized during conversion. d. All Bates Prefix and Suffix formats for records contained in the production. 4. Records shall be produced to the Committee on one or more CDs, memory sticks, thumb drives, or USB hard drives. Production media shall be labeled with the following information: Case Number, Production Date, Producing Party, Bates Range. 5. All records shall be Bates-stamped sequentially and produced sequentially. 6. Records produced shall be organized, identified, and indexed electronically. 7. Only alphanumeric characters and the underscore (" ") character are permitted in file and folder names. Special characters are not permitted. 8. Electronic record productions shall be prepared according to the following standards: a All submissions must be organized by custodian unless otherwise instructed. 1) Productions shall include: Page i of x 1 A Concordance Data (.DAT) Load File in accordance with metadata fields as defined in Appendix A. 2 A Standard Format Opticon Image Cross-Reference File (OPT) to link produced images to the records contained in the .DAT file. 3 A file (can be Microsoft Word, Microsoft Excel, or Adobe PDF) defining the fields and character lengths of the load file. c. The production format shall include images, text, and native electronic files. Electronic files must be produced in their native format, i.e., the format in which they are ordinarily used and maintained during the normal course of business. For example, a Microsoft Excel file must be produced as a Microsoft Excel file rather than an image of a spreadsheet. NOTE: An Adobe PDF file representing a printed copy of another file format (such as Word Document or Webpage) is NOT considered a native file unless the record was initially created as a PDF. 1 Image Guidelines: 1. Single or multi page TIFF files. 2. All TIFF images must have a unique file name, i.e., Bates Number 3. Images must be endorsed with sequential Bates numbers the lower right corner of each image. 2 Text Guidelines: 1. All text shall be produced as separate text files, not inline within the .DAT file. 2. Relative paths shall be used to link the associated text file (FIELD: TEXTPATH) to the record contained in the load file. 3. Associated text files shall be named as the BEGBATES field of each record. 3 Native Pile Guidelines: 1. Copies of original email and native file records/attachments must be included for all electronic productions. 2. Native file records must be named per the BEGBATES field. Page ii °Ix 3. Relative paths shall be used to link the associated native file (FIELD: NATIVEFILELINK) to the record contained in the load file. 4. Associated native files shall be named as the BEGBATES field of each record. d All record family groups, i.e. email attachments, embedded files, etc., should be produced together and children files should follow parent files sequentially in the Bates numbering. e. Only 1 load file and one Opticon image reference file shall be produced per production volume. f. All extracted text shall be produced as separate text files. g Record numbers in the load file should match record Bates numbers and TIFF file names. h All electronic record produced to the Committee should include the fields of metadata listed in Appendix A. 9. Records produced to the Committee shall include an index describing the contents of the production. To the extent that more than one CD, hard drive, memory stick, thumb drive, box, or folder is produced, each CD, hard drive, memory stick, thumb drive, box, or folder shall contain an index describing its contents. 10 Records produced in response to this request shall be produced together with copies of file labels, dividers, or identifying markers with which they were associated when the request was served. 11 When you produce records, you shall identify the paragraph or number in the Committee's request to which the records respond and add a metadata tag listing that paragraph or number (see Appendix A). 12 Two sets of records shall be delivered, one set to the Majority Staff and one set to the Minority Staff. To the extent the Minority Staff does not have an electronic record review platform, records shall be produced to the Minority Staff in searchable PDF format and shall be produced consistent with the instructions specified in this schedule to the maximum extent practicable. 13 Production media and produced records shall not be encrypted, contain any password protections, or have any limitations that restrict access and use. 14 It shall not be a basis for refusal to produce records that any other person or entity also possesses non-identical or identical copies of the same records. Page iii of x 15 In the event that a record is withheld, you shall provide a log containing the following information concerning any such record: (a) the reason why the record was withheld; (b) the type of record; (c) the general subject matter; (d) the date, author and addressee; (e) the relationship of the author and addressee to each other; and (f) any other description necessary to identify the record and to explain the basis for not producing the record. If a claimed privilege applies to only a portion of any record, that portion only should be withheld and the remainder of the record should be produced. As used herein, "claim of privilege" includes, but is not limited to, any claim that a record either may or must be withheld from production pursuant to the constitution or any statute, rule, or regulation. a Any objections or claims of privilege are waived if you fail to provide an explanation of why full compliance is not possible and a log identifying with specificity the ground(s) for withholding each withheld record prior to the request compliance date. b In complying with the request, be apprised that (unless otherwise determined by the Committee) the Committee does not recognize: any purported non-disclosure privileges associated with the common law including, but not limited to, the deliberative-process privilege, the attorney-client privilege, and attorney work product protections; any purported privileges or protections from disclosure under the Freedom of Information Act; or any purported contractual privileges, such as nondisclosure agreements. c. Any assertion by a request recipient of any such non-constitutional legal bases for withholding records or other materials shall be of no legal force and effect and shall not provide a justification for such withholding or refusal, unless and only to the extent that the Chairman of the Committee has consented to recognize the assertion as valid. 16 If any record responsive to this request was, but no longer is, in your possession, custody, or control, or has been placed into the possession, custody, or control of any third party and cannot be provided in response to this request, you should identify the record (stating its date, author, subject and recipients) and explain the circumstances under which the record ceased to be in your possession, custody, or control, or was placed in the possession, custody, or control of a third party. 17 If any record responsive to this request was, but no longer is, in your possession, custody or control, state: a. how the record was disposed of; Page iv of x b. the name, current address, and telephone number of the person who currently has possession, custody or control over the record; c. the date of disposition; d. the name, current address, and telephone number of each person who authorized said disposition or who had or has knowledge of said disposition. 18 If any record responsive to this request cannot be located, describe with particularity the efforts made to locate the record and the specific reason for its disappearance, destruction or unavailability. 19 If a date or other descriptive detail set forth in this request referring to a record is inaccurate, but the actual date or other descriptive detail is known to you or is otherwise apparent from the context of the request, you are required to produce all records which would be responsive as if the date or other descriptive detail were correct. 20 This request is continuing in nature and applies to any newly-discovered information. Any responsive record not produced because it has not been located or discovered by the return date shall be produced immediately upon subsequent location or discovery. 21 If properties or permissions are modified for any records produced electronically, receipt of such records will not be considered full compliance with the request. 22 Upon completion of the record production, you shall submit a written certification signed by you or your counsel, stating that: a. a diligent search has been completed of all records in your possession, custody, or control which reasonably could contain responsive records; b records responsive to the request have not been destroyed, modified, removed, transferred, or otherwise made inaccessible to the Committee since the date of receiving the Committee's request or in anticipation of receiving the Committee's request, and c. all records located during the search that are responsive have been produced to the Committee, identified in a log provided to the Committee, as described in (15) above, or identified as provided in (16), (17) or (18) above. 23 When representing a witness or entity before the Committee in response to a record request or request for transcribed interview, counsel for the witness or entity must promptly submit to the Committee a notice of appearance specifying the following: (a) counsel's name, firm or organization, and contact information; Page vol x and (b) each client represented by the counsel in connection with the proceeding. Submission of a notice of appearance constitutes acknowledgement that counsel is authorized to accept service of process by the Committee on behalf of such client(s), and that counsel is bound by and agrees to comply with all applicable House and Committee rules and regulations. Page vi of x Committee Records Request Definitions 1. The term "records" means any written, recorded, or graphic matter of any nature whatsoever, regardless of how recorded or preserved, and whether original or copy. 2. The term "records in your possession, custody or control" means (a) records that are in your possession, custody, or control, whether held by you or your past or present agents, employees, or representatives acting on your behalf; (b) records that you have a legal right to obtain, that you have a right to copy, or to which you have access; and (c) records that have been placed in the possession, custody, or control of any third party. 3. The term "communication" means each manner or means of disclosure or exchange of information, regardless of means utilized, whether oral, electronic, by document or otherwise, and whether in an in-person meeting, by telephone, facsimile, e-mail (desktop or mobile device), text message, MMS or SMS message, regular mail, telexes, releases, or otherwise. 4. The terms "and" and "or" shall be construed broadly and either conjunctively or disjunctively to bring within the scope of this request any information which might otherwise be construed to be outside its scope. The singular includes plural number, and vice versa. The masculine includes the feminine and neuter genders. 5. The terms "person" or "persons" means natural persons, firms, partnerships, associations, corporations, subsidiaries, divisions, departments, joint ventures, proprietorships, syndicates, or other legal, business or government entities, and all subsidiaries, affiliates, divisions, departments, branches, and other units thereof. 6. The terms "pertaining to," "referring," or "relating," with respect to any given subject, means anything that constitutes, contains, embodies, reflects, identifies, states, refers to, deals with or is in any manner whatsoever pertinent to that subject. Page vii of x Appendix A Production Load File Formatting and Delimiters: • • The first line shall be a header row containing field names. Load file delimiters shall be in accordance with the following: o Field Separator: ¶ (20) Text Qualifier: b (254) o Newline: \n (10) Multi-Value Separator (59) o Nested Value Separator: \ (92) • All Date / Time Data shall be split into two separate fields (see below). o Date Format: mm/dd/yyyy — i.e., 05/18/2015 o Time Format: hh:mm:ss A — i.e., 08:39:12 AM Required Metadata Fields Field Name Sample Data FIRSTBATES LASTBATES EDC0000001 EDC0000001 ATTACHRANGE Description First Bates number of native file record/email Last Bates number of native file record/email **The LASTBATES field should be populated for single page records/emails. EDC0000001 - EDC0000015 Bates number of the first page of the parent record to the Bates number of the last page of the last attachment "child" record BEGATTACH ENDATTACH CUSTODIAN EDC0000001 EDC0000015 Smith, John First Bates number of attachment ranee Last Bates number of attachment ranee Email: mailbox where the email resided Attachment: Individual nein whom the record originated FROM John Smith Email: Sender Native: Authons) of record **semicolon should be used to separate multiple entries TO Coffman..ialliCC; LeeW [mailto:LeeW@MSN.comj Recipient(s) **semicolon should be used to separate multiple entries CC Frank Thompson lmailto: frank_Thompson@cdtcomi Carbon copy recipient(s) **semicolon should be used to separate multiple entries BCC John Cain Blind carbon copy recipient(s) **semi-colon should be used to separate multiple entries SUBJECT Board Meeting Minutes DATE_SENT 10/12/2010 TIME_SENTMME _ZONE 07:05 PM GMT Email: Subject line of the email Native: Title of record Of available) Email: Date the email was sent Native: (empty) Email: Time the email was sent/ Time zone in which the emails were standardized during conversion. Native: (empty) **This data must be a separate field and cannot be combined with the DATE_SENT field TIME_ZONE GMT NATIVEFILELINK DA001 \ EDC0000001.msg The time zone in which the emails were standardized during conversion. Email: Time zone Native: (empty) Hyperlink to the email or native file record The linked file must be named per the FIRSTBATES number Page viii of x MIME_TYPE MSG The content type of an Email or native file record as identified/extracted from the header FILE_EXTEN MSG The file type extension representing the Email or native file record; will vary depending on the email format AUTHOR John Smith Email: (empty) Native: Author of the record DATE_CREATED 10/10/2010 Email: (empty) Native: Date the record was created TIME_CREATED 10:25 AM DATE_MOD 10/12/2010 TIME_MOD 07:00 PM DATE_ACCESSD 10/12/2010 TIME_ACCESSD 07:00 PM PRINTED_DATE 10/12/2010 NATIVEFILESIZE 5,952 PGCOUNT PATH 1 JAShared \ SmithEOctober Agenda.doc INTFILEPATH Personal Folders \ Deleted Items \ Board Meeting Minutes.MS2 <000805c2c716$75977050$ cb 8306d1firMSN> dI3Idd02c5e6eec4693d9a0 69 8aff95c 2fcab58712467eab4004583 eb 811)71'89 \ TEXT \ AAA0001.txt Email: (empty) Native: Time the record was created **This data must be a separate field and cannot be combined with the DATE_CREATED field Email: (empty) Native: Date the record was last modified Email: (empty) Native: Time the record was last modified **This data must be a separate field and cannot be combined with the DATE_MOD field Email: (empty) Native: Date the record was last accessed Email: (empty) Native: Time the record was last accessed **This data must be a separate field and cannot be combined with the DATE_ACCESSD field Email: (empty) Native: Date the record was last printed Size of native file record/email in KB **Use only whole numbers Number of pages in native file record/email Email: (empty) Native: Path where native file record was stored including original file name Email: original location of email including original file name Native: (empty) INTMSGID MD5HASH TEXTPATH NATIVEFILEPATH \ NATIVES \ MESSAGE! .nEg; \NATIVES ) ATTACHMENT1. doe HANDWRITTEN YES REDACTED YES Email: Unique Message ID Native: (empty) MD5 Hash value of the record Path to the record's text file that contains extracted text to be used for processing. Every record has a relative path to its text file in this field. Note: These paths may also be fully qualified; and thus do not have to be relative. Path to the record's native file. Every record has a relative path to its native file in this field. Note: These paths may also be fully qualified; and thus do not have to be relative. Field should be marked "YES" if the record has any handwritten notes or other text that is not contained in the text file Field should be marked "YES" if the record contains any redactions, "NO" otherwise Metadata Fields Required Upon Specific Request TAGS FirstPass Responsive; EirstPassTorQC If requested — a list of tags assigned to the record Multiple tags are separated by the multi-value separator, for example: -A; B; (7", Page ix of x FOLDERS JohnDoeDoesTirstPass and nested tags are denoted using the nested value separator, for example: "X \ Y \Z.". Tags for attachments will appear under the custom field "ATTACHMENT_TAGS". If requested — a list of folders of which the record is a part. Multiple folders are separated by the multi-value separator, for example: "A: 13, C", and nested folders are denoted using the nested value separator, for example: "X \ Y \ Z". Folders for attachments will appear under the custom field "ATTACHMENT_FOLDERS". Page x of x JEB I IENSARLING, TX CHAIRMAN "United *taus tousr o1 Rcpresentatiues MAXINE WATERS, CA RANKING MEMBER Committee on financial (*eruices 2.129 Rauburn house Office Building iDa shingon. DIE. 2055 March 10, 2017 The Honorable Richard Cordray Director Bureau of Consumer Financial Protection 1700 G Street, NW Washington, D.C. 20552 Dear Director Cordray: The Committee continues to review the August 24, 2016 rule proposed] by the Bureau of Consumer Financial Protection (Bureau") to substantially change the confidential treatment of information obtained by the Bureau from its regulated institutions.2 While Section § 1022(c) of the Dodd-Frank Wall Street Reform and Consumer Protection (Pub. L. 111-203) ("Dodd-Frank") Act permits the Bureau to share information collected from regulated institutions with other Federal agencies that have jurisdiction over institutions examined by the Bureau, 3 the Bureau's recent proposal may expand its authority in violation of the Dodd-Frank Act. Specifically, the proposal would allow the Bureau to disclose any confidential information that is "relevant to the exercise of the Agency's statutory or regulatory authority"4 with any "Federal, State, or foreign governmental authority, or an entity exercising governmental authority."5 Notably absent from the Bureau's proposed definition is the requirement that the entity receiving the Bureau's confidential information exercise jurisdiction over the regulated institution from which the information is derived. The Bureau's proposal also raises important First Amendment concerns because it may operate as a prior restraint on speech.° The proposed rule would prevent the disclosure of "civil investigative demands [and] notice and opportunity Amendments Relating to Disclosure of Records and Information, 81 Fed. Reg. 58.310 (proposed Aug. 24, 2016) (to be codified at 12 C.F.R. pt. 1070). 2 See Letters from Hon. Jeb Hensarling, Chairman. H. Comm. on Fin. Services, to Hon. Richard Cordray, Dir., Consumer Fin. Prot. Bureau (Oct. 21, 2016). Dodd-Frank Wall Street Reform and Consumer Protection Act § 1022(c)(6)(C)60, 12 U.S.C. § 5512(c)(6)(C)(ii). 4 Amendments Relating to Disclosure of Records and Information, 81 Fed. Reg. at 58,335. 5 Id. at 58,323. The Bureau proposes that entities exercising government authority even include "registration and disciplinary organizations like state bar associations." Id. at 58,311. 6 See Letter from Arthur Spitzer, Legal Dir., Am. Civil Liberties Union, to Consumer Fin. Prot. Bureau (Oct. 20, 2016) (submitting for official comment the ACLU's position that the proposed regulation would be a prior restraint on speech requiring prospective speakers—recipients of civil investigative demands and notice and opportunity to respond and advise letters who wish to disclose them more broadly—to seek the Bureau's permission before the speech takes place). The Hon. Richard Cord March 10, 2017 Page 2 of 2 to respond and advise letters," contrary to the long established practice of other agencies such as the Federal Trade Commission and the Securities and Exchange Commission); This departure — for which the Bureau offers no justification — would shield potential enforcement abuses from public scrutiny. To allow the Committee to carry out its oversight responsibilities under the House Rules,9 please provide by not later than March 24, 2017: 1. The names and titles of all Bureau employees who developed the proposed rule; 2. All records regarding the Bureau's legal authority to share confidential information with foreign governmental authorities and entities that exercise governmental authority, such as state bar associations, and the procedures for sharing such information; 3. All records relating to the Bureau's interpretation of 12 U.S.C. § 5512(0(6) and the proposed rule, including, but not limited to, legal memoranda relating to Section 5512(c)(6); and 4. All records relating to the proposal to expand the scope of 12 C.F.R. § 1070.42.10 If you have any questions regarding this request, please have your staff contact Elie Greenbaum of the Committee staff at (202) 225-7502. Sincerely, ANN WAGNER Chairman Subcommittee on Oversight and Investigations cc: The Hon. Al Green, Ranking Member Id. at 58,316. See 16 C.F.R. § 2.9 and 17 C.F.R. § 203.7. 9 Rule X, Rules of the House of Representatives, 115th Cong. to On October 21, 2016, the Committee requested the Bureau provide information regarding "the statutory authority on which the Bureau relies for amending 12 C.F.R. § 1070.42 [and the] legal safeguards [that] exist to prevent the Bureau from abusing the power it proposes to grant itself in this proposal." Letters from Hon. Jab Hensarling, Chairman, H. Comm. on Fin. Services, to Hon. Richard Cordray, Dir., Consumer Fin. Prot. Bureau (Oct. 21, 2016). The Bureau has failed to provide a full and complete response to that request. The information requests contained herein are in addition to, and in no way supersede or replace, the Committee's October 21. 2016 records requests; all records requested by the Committee should be fully and promptly produced. S Committee Records Request Instructions 1. In complying with this request, you are required to produce all responsive records that are in your possession, custody, or control, whether held by you or your past or present agents, employees, and representatives acting on your behalf. You shall also produce records that you have a legal right to obtain, that you have a right to copy or to which you have access, as well as records that you have placed in the temporary possession, custody, or control of any third party. Requested records shall not be destroyed, modified, removed, transferred, or otherwise made inaccessible to the Committee. 2. In the event that any entity, organization, or individual denoted in this request has been, or is also known by any other name than that herein denoted, the request shall be read also to include that alternative identification. 3. A cover letter shall be included with each production and include the following: a. A list of each piece of media included in the production with its unique production volume number. b. A list of custodians, identifying the Bates range for each custodian. c. The time zone in which the emails were standardized during conversion. d. All Bates Prefix and Suffix formats for records contained in the production. 4. Records shall be produced to the Committee on one or more CDs, memory sticks, thumb drives, or USB hard drives. Production media shall be labeled with the following information: Case Number, Production Date, Producing Party, Bates Range. 5. All records shall be Bates-stamped sequentially and produced sequentially. 6. Records produced shall be organized, identified, and indexed electronically. 7. Only alphanumeric characters and the underscore (" ") character are permitted in file and folder names. Special characters are not permitted. 8. Electronic record productions shall be prepared according to the following standards: a All submissions must be organized by custodian unless otherwise instructed. 1) Productions shall include: Page i of x 1 A Concordance Data (.DAT) Load File in accordance with metadata fields as defined in Appendix A. 2 A Standard Format Opticon Image Cross-Reference File (OPT) to link produced images to the records contained in the .DAT file. 3 A file (can be Microsoft Word, Microsoft Excel, or Adobe PDF) defining the fields and character lengths of the load file. c. The production format shall include images, text, and native electronic files. Electronic files must be produced in their native format, i.e., the format in which they are ordinarily used and maintained during the normal course of business. For example, a Microsoft Excel file must be produced as a Microsoft Excel file rather than an image of a spreadsheet. NOTE: An Adobe PDF file representing a printed copy of another file format (such as Word Document or Webpage) is NOT considered a native file unless the record was initially created as a PDF. 1 Image Guidelines: 1. Single or multi page TIFF files. 2. All TIFF images must have a unique file name, i.e., Bates Number 3. Images must be endorsed with sequential Bates numbers the lower right corner of each image. 2 Text Guidelines: 1. All text shall be produced as separate text files, not inline within the .DAT file. 2. Relative paths shall be used to link the associated text file (FIELD: TEXTPATH) to the record contained in the load file. 3. Associated text files shall be named as the BEGBATES field of each record. 3 Native Pile Guidelines: 1. Copies of original email and native file records/attachments must be included for all electronic productions. 2. Native file records must be named per the BEGBATES field. Page ii °Ix 3. Relative paths shall be used to link the associated native file (FIELD: NATIVEFILELINK) to the record contained in the load file. 4. Associated native files shall be named as the BEGBATES field of each record. d All record family groups, i.e. email attachments, embedded files, etc., should be produced together and children files should follow parent files sequentially in the Bates numbering. e. Only 1 load file and one Opticon image reference file shall be produced per production volume. f. All extracted text shall be produced as separate text files. g Record numbers in the load file should match record Bates numbers and TIFF file names. h All electronic record produced to the Committee should include the fields of metadata listed in Appendix A. 9. Records produced to the Committee shall include an index describing the contents of the production. To the extent that more than one CD, hard drive, memory stick, thumb drive, box, or folder is produced, each CD, hard drive, memory stick, thumb drive, box, or folder shall contain an index describing its contents. 10 Records produced in response to this request shall be produced together with copies of file labels, dividers, or identifying markers with which they were associated when the request was served. 11 When you produce records, you shall identify the paragraph or number in the Committee's request to which the records respond and add a metadata tag listing that paragraph or number (see Appendix A). 12 Two sets of records shall be delivered, one set to the Majority Staff and one set to the Minority Staff. To the extent the Minority Staff does not have an electronic record review platform, records shall be produced to the Minority Staff in searchable PDF format and shall be produced consistent with the instructions specified in this schedule to the maximum extent practicable. 13 Production media and produced records shall not be encrypted, contain any password protections, or have any limitations that restrict access and use. 14 It shall not be a basis for refusal to produce records that any other person or entity also possesses non-identical or identical copies of the same records. Page iii of x 15 In the event that a record is withheld, you shall provide a log containing the following information concerning any such record: (a) the reason why the record was withheld; (b) the type of record; (c) the general subject matter; (d) the date, author and addressee; (e) the relationship of the author and addressee to each other; and (f) any other description necessary to identify the record and to explain the basis for not producing the record. If a claimed privilege applies to only a portion of any record, that portion only should be withheld and the remainder of the record should be produced. As used herein, "claim of privilege" includes, but is not limited to, any claim that a record either may or must be withheld from production pursuant to the constitution or any statute, rule, or regulation. a Any objections or claims of privilege are waived if you fail to provide an explanation of why full compliance is not possible and a log identifying with specificity the ground(s) for withholding each withheld record prior to the request compliance date. b In complying with the request, be apprised that (unless otherwise determined by the Committee) the Committee does not recognize: any purported non-disclosure privileges associated with the common law including, but not limited to, the deliberative-process privilege, the attorney-client privilege, and attorney work product protections; any purported privileges or protections from disclosure under the Freedom of Information Act; or any purported contractual privileges, such as nondisclosure agreements. c. Any assertion by a request recipient of any such non-constitutional legal bases for withholding records or other materials shall be of no legal force and effect and shall not provide a justification for such withholding or refusal, unless and only to the extent that the Chairman of the Committee has consented to recognize the assertion as valid. 16 If any record responsive to this request was, but no longer is, in your possession, custody, or control, or has been placed into the possession, custody, or control of any third party and cannot be provided in response to this request, you should identify the record (stating its date, author, subject and recipients) and explain the circumstances under which the record ceased to be in your possession, custody, or control, or was placed in the possession, custody, or control of a third party. 17 If any record responsive to this request was, but no longer is, in your possession, custody or control, state: a. how the record was disposed of; Page iv of x b. the name, current address, and telephone number of the person who currently has possession, custody or control over the record; c. the date of disposition; d. the name, current address, and telephone number of each person who authorized said disposition or who had or has knowledge of said disposition. 18 If any record responsive to this request cannot be located, describe with particularity the efforts made to locate the record and the specific reason for its disappearance, destruction or unavailability. 19 If a date or other descriptive detail set forth in this request referring to a record is inaccurate, but the actual date or other descriptive detail is known to you or is otherwise apparent from the context of the request, you are required to produce all records which would be responsive as if the date or other descriptive detail were correct. 20 This request is continuing in nature and applies to any newly-discovered information. Any responsive record not produced because it has not been located or discovered by the return date shall be produced immediately upon subsequent location or discovery. 21 If properties or permissions are modified for any records produced electronically, receipt of such records will not be considered full compliance with the request. 22 Upon completion of the record production, you shall submit a written certification signed by you or your counsel, stating that: a. a diligent search has been completed of all records in your possession, custody, or control which reasonably could contain responsive records; b records responsive to the request have not been destroyed, modified, removed, transferred, or otherwise made inaccessible to the Committee since the date of receiving the Committee's request or in anticipation of receiving the Committee's request, and c. all records located during the search that are responsive have been produced to the Committee, identified in a log provided to the Committee, as described in (15) above, or identified as provided in (16), (17) or (18) above. 23 When representing a witness or entity before the Committee in response to a record request or request for transcribed interview, counsel for the witness or entity must promptly submit to the Committee a notice of appearance specifying the following: (a) counsel's name, firm or organization, and contact information; Page vol x and (b) each client represented by the counsel in connection with the proceeding. Submission of a notice of appearance constitutes acknowledgement that counsel is authorized to accept service of process by the Committee on behalf of such client(s), and that counsel is bound by and agrees to comply with all applicable House and Committee rules and regulations. Page vi of x Committee Records Request Definitions 1. The term "records" means any written, recorded, or graphic matter of any nature whatsoever, regardless of how recorded or preserved, and whether original or copy. 2. The term "records in your possession, custody or control" means (a) records that are in your possession, custody, or control, whether held by you or your past or present agents, employees, or representatives acting on your behalf; (b) records that you have a legal right to obtain, that you have a right to copy, or to which you have access; and (c) records that have been placed in the possession, custody, or control of any third party. 3. The term "communication" means each manner or means of disclosure or exchange of information, regardless of means utilized, whether oral, electronic, by document or otherwise, and whether in an in-person meeting, by telephone, facsimile, e-mail (desktop or mobile device), text message, MMS or SMS message, regular mail, telexes, releases, or otherwise. 4. The terms "and" and "or" shall be construed broadly and either conjunctively or disjunctively to bring within the scope of this request any information which might otherwise be construed to be outside its scope. The singular includes plural number, and vice versa. The masculine includes the feminine and neuter genders. 5. The terms "person" or "persons" means natural persons, firms, partnerships, associations, corporations, subsidiaries, divisions, departments, joint ventures, proprietorships, syndicates, or other legal, business or government entities, and all subsidiaries, affiliates, divisions, departments, branches, and other units thereof. 6. The terms "pertaining to," "referring," or "relating," with respect to any given subject, means anything that constitutes, contains, embodies, reflects, identifies, states, refers to, deals with or is in any manner whatsoever pertinent to that subject. Page vii of x Appendix A Production Load File Formatting and Delimiters: • • The first line shall be a header row containing field names. Load file delimiters shall be in accordance with the following: o Field Separator: ¶ (20) Text Qualifier: b (254) o Newline: \n (10) Multi-Value Separator (59) o Nested Value Separator: \ (92) • All Date / Time Data shall be split into two separate fields (see below). o Date Format: mm/dd/yyyy — i.e., 05/18/2015 o Time Format: hh:mm:ss A — i.e., 08:39:12 AM Required Metadata Fields Field Name Sample Data FIRSTBATES LASTBATES EDC0000001 EDC0000001 ATTACHRANGE Description First Bates number of native file record/email Last Bates number of native file record/email **The LASTBATES field should be populated for single page records/emails. EDC0000001 - EDC0000015 Bates number of the first page of the parent record to the Bates number of the last page of the last attachment "child" record BEGATTACH ENDATTACH CUSTODIAN EDC0000001 EDC0000015 Smith, John First Bates number of attachment ranee Last Bates number of attachment ranee Email: mailbox where the email resided Attachment: Individual nein whom the record originated FROM John Smith Email: Sender Native: Authons) of record **semicolon should be used to separate multiple entries TO Coffman..ialliCC; LeeW [mailto:LeeW@MSN.comj Recipient(s) **semicolon should be used to separate multiple entries CC Frank Thompson lmailto: frank_Thompson@cdtcomi Carbon copy recipient(s) **semicolon should be used to separate multiple entries BCC John Cain Blind carbon copy recipient(s) **semi-colon should be used to separate multiple entries SUBJECT Board Meeting Minutes DATE_SENT 10/12/2010 TIME_SENTMME _ZONE 07:05 PM GMT Email: Subject line of the email Native: Title of record Of available) Email: Date the email was sent Native: (empty) Email: Time the email was sent/ Time zone in which the emails were standardized during conversion. Native: (empty) **This data must be a separate field and cannot be combined with the DATE_SENT field TIME_ZONE GMT NATIVEFILELINK DA001 \ EDC0000001.msg The time zone in which the emails were standardized during conversion. Email: Time zone Native: (empty) Hyperlink to the email or native file record The linked file must be named per the FIRSTBATES number Page viii of x MIME_TYPE MSG The content type of an Email or native file record as identified/extracted from the header FILE_EXTEN MSG The file type extension representing the Email or native file record; will vary depending on the email format AUTHOR John Smith Email: (empty) Native: Author of the record DATE_CREATED 10/10/2010 Email: (empty) Native: Date the record was created TIME_CREATED 10:25 AM DATE_MOD 10/12/2010 TIME_MOD 07:00 PM DATE_ACCESSD 10/12/2010 TIME_ACCESSD 07:00 PM PRINTED_DATE 10/12/2010 NATIVEFILESIZE 5,952 PGCOUNT PATH 1 JAShared \ SmithEOctober Agenda.doc INTFILEPATH Personal Folders \ Deleted Items \ Board Meeting Minutes.MS2 <000805c2c716$75977050$ cb 8306d1firMSN> dI3Idd02c5e6eec4693d9a0 69 8aff95c 2fcab58712467eab4004583 eb 811)71'89 \ TEXT \ AAA0001.txt Email: (empty) Native: Time the record was created **This data must be a separate field and cannot be combined with the DATE_CREATED field Email: (empty) Native: Date the record was last modified Email: (empty) Native: Time the record was last modified **This data must be a separate field and cannot be combined with the DATE_MOD field Email: (empty) Native: Date the record was last accessed Email: (empty) Native: Time the record was last accessed **This data must be a separate field and cannot be combined with the DATE_ACCESSD field Email: (empty) Native: Date the record was last printed Size of native file record/email in KB **Use only whole numbers Number of pages in native file record/email Email: (empty) Native: Path where native file record was stored including original file name Email: original location of email including original file name Native: (empty) INTMSGID MD5HASH TEXTPATH NATIVEFILEPATH \ NATIVES \ MESSAGE! .nEg; \NATIVES ) ATTACHMENT1. doe HANDWRITTEN YES REDACTED YES Email: Unique Message ID Native: (empty) MD5 Hash value of the record Path to the record's text file that contains extracted text to be used for processing. Every record has a relative path to its text file in this field. Note: These paths may also be fully qualified; and thus do not have to be relative. Path to the record's native file. Every record has a relative path to its native file in this field. Note: These paths may also be fully qualified; and thus do not have to be relative. Field should be marked "YES" if the record has any handwritten notes or other text that is not contained in the text file Field should be marked "YES" if the record contains any redactions, "NO" otherwise Metadata Fields Required Upon Specific Request TAGS FirstPass Responsive; EirstPassTorQC If requested — a list of tags assigned to the record Multiple tags are separated by the multi-value separator, for example: -A; B; (7", Page ix of x FOLDERS JohnDoeDoesTirstPass and nested tags are denoted using the nested value separator, for example: "X \ Y \Z.". Tags for attachments will appear under the custom field "ATTACHMENT_TAGS". 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Page x of x March 13, 2017 The Honorable Jeb Hensarling Chairman Committee on Financial Services United States House of Representatives 2129 Rayburn House Office Building Washington, DC 20515 The Honorable Jason Chaffetz Chairman Committee on Oversight and Government Reform United States House of Representatives 2157 Rayburn House Office Building Washington, DC 20515 The Honorable Ann Wagner Chairman Subcommittee on Oversight and Investigations Committee on Financial Services United States House of Representatives 2129 Rayburn House Office Building Washington, DC 20515 The Honorable Jim Jordan Chairman Subcommittee on Health Care, Benefits and Administrative Rules Committee on Oversight and Government Reform United States House of Representatives 2157 Rayburn House Office Building Washington, DC 20515 Dear Chairmen Hensarling, Chaffetz, Wagner, and Jordan: Thank you for your letter of February 27, 2017, regarding the Consumer Financial Protection Bureau's compliance with federal records preservation requirements. The Bureau is committed to maintaining an effective and efficient records management program that governs the creation, retention, appraisal, and disposal of records in a systematic and orderly way and in accordance with federal records preservation requirements. To ensure compliance with federal records management obligations, the Bureau has instituted policies and procedures regarding records management and provided training to all employees on their recordkeeping obligations. The Bureau has in place several policies specifically addressing the management and retention of emails. Additionally, in order to address emerging technological issues such as the management and retention of electronic messages including text messages, the Bureau's Records Management Officer is currently working to create and distribute supplemental Bureau-wide records management guidance to include specific guidance on managing electronic records. The Bureau is also updating the Records Management Policy to include additional electronic messaging guidance. In addition, the Bureau has implemented the "Capstone Approach to manage email and instant messaging records by creating over 1,745 archive mailboxes for employees and contractors, and transferring over 1,419 gigabytes of data into the archive mailboxes. To support the transition to the "Capstone Approach:. the Records Management Office has conducted over 30 Capstone Management briefings with Bureau staff. The Records Management Office also routinely conducts electronic messaging briefings with Senior Officials, Records Liaison Officers, and staff Your letter refers to a press report published by the Daily Cal/c'; on January 23, 2017, which describes certain text messages produced by the Bureau pursuant to Freedom of Information Act requests. As discussed in the Daily Caller article, pursuant to a FOIA request in August 2016, the Bureau produced text messages that were stored on the Bureau-issued or Bureau-reimbursed devices of certain Bureau staff since January I, 2015. After further communications with the requester, the requester also sought all incoming and outgoing text messages from my private device to or from CFPB staff since January 1,2015. Per your request, enclosed please find copies of the Freedom of Information Act requests discussed in the Daily Caller article referenced in your letter, as well as the documents produced in response to those requests. Your letter also requested certain information regarding any non-governmental email accounts or phone numbers used by me, including a list of all email accounts and phone numbers used by me to transact government business, and the number of mails sent or received by me using a nongovernmental email account to or from the governmental email accounts of dozens of Bureau employees. Bureau staff is conducting a review to determine what if any information is responsive to these requests. Given the large number of Bureau email accounts implicated by the list of officials in your letter, a responsible review of each of these accounts for any responsive records will take some time. Bureau staff will work assiduously to conduct the necessary searches and will provide that information once it is available. Should you have any questions about this response, please contact me or have your staff contact Anne Tindall of the Bureau's Legal Division or Patrick O'Brien of the Bureau's Office of Legislative Affairs. Ms. Tindall can be reached at (202) 435-9591 and Mr. O'Brien can be reached at (202) 435-7180. Sincerely, Richard Cordray Director cc: The Honorable Maxine Waters, Ranking Member Committee on Financial Services The Honorable Elijah Cummings, Ranking Member Committee on Oversight and Government Reform The Honorable Al Green, Ranking Member Subcommittee on Oversight and Investigations Committee on Financial Services The Honorable Raja Krishnamoorthi, Ranking Member Subcommittee on Health Care, Benefits and Administrative Rules Committee on Oversight and Government Reform March 13, 2017 The Honorable Ann Wagner Chairman Subcommittee on Oversight and Investigations Committee on Financial Services U.S. House of Representatives 2129 Rayburn House Office Building Washington, DC 20515 Dear Chairman Wagner: I write in response to your February 27, 2017 letter, which requests records related to the allocation made from the Consumer Financial Protection Bureau's Civil Penalty Fund on May 27, 2016. The records included in the enclosed production respond to items 1, 2 and 3 in your letter, and concern the three allocations made from the Civil Penalty Fund on May 27, 2016 to classes of victims from the Walter J. Ledda (Morgan Drexen, Inc.); Irvine Web Works, Inc. d/b/a Student Loan Processing: and Student Aid Institute, Inc. and Steven Lamont cases. Please be advised that the Bureau is still performing due diligence on the data for the Walter J. Ledda (Morgan Drexen, Inc.) case and has not yet created its final list of victims for that ease. Thus, it does not yet have the list that will indicate the amount that each victim will receive from the Civil Penalty mid or the amount of each victim's uncompensated harm, as requested by item 3 of your February 27 letter. The Bureau has, however, finalized the victim lists for the Student Loan Processing and Student Aid Institute matters, and it is including with this production records indicating the amount that each victim from those cases is receiving from the Civil Penalty Fund, the amount of those victims uncompensated harm, and the basis for those amounts. Item 4 in your letter will likely yield a large volume of potentially responsive materials. While some of the documents we are producing today are responsive to that request. given the request's substantial breadth, staff-level dialogue will be necessary to ensure efficient and expeditious production. We invite your staff to engage in discussions with Bureau staff to scope and prioritize the records of most interest to the Committee. Should you have questions about this matter, please contact me or have your staff contact Steven Bressler of the Bureau's legal Division or Patrick O'Brien of the Bureau's Office of Legislative Affairs. Mr. Bressler can be reached at (202) 435-7248. and Mr. O'Brien can be reached at (202) 435-7180. Sincerely, fLetAtACI Richard Cordray Director i cc: The Honorable Al Green, Ranking Member Subcommittee on Oversight and Investigations Committee on Financial Services March 20, 2017 The Honorable leb Hensarling Chairman Committee on Financial Services U.S. House of Representatives 2129 Rayburn House Office Building Washington, DC 20515 Dear Chairman Hensarling: Enclosed please find the Consumer Financial Protection Bureau's sixth annual report to Congress pursuant to Section 1692m of the Fair Debt Collection Practices Act. Should you have any questions about the enclosed report, please contact me at (202) 435-9711. Sine Catherine Galicia Assistant Director for Legislative Affairs Ill: In;:; Ii c (4 201 7? Message from Richard Cordray Director of the CFPB The year 2017 marks the fortieth anniversary of the enactment of the Fair Debt Collection Practices Act ("FDCPA"). In enacting that law, Congress found "abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors" and enacted the law to put an end to such practices and assure "that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged." Much has changed in the ensuing forty years in the ways in which debt is collected and even in the types of entities engaged in debt collection. But the Act remains as important today as it was the day that it was signed into law. The Consumer Financial Protection Bureau ("Bureau" or "CFPB") is the only federal government agency dedicated solely to consumer financial protection. Among our important responsibilities is administering and enforcing the FDCPA. We recognize that debt collection is a necessary part of a functioning financial system. At the same time, we recognize that illegal practices have no place in the debt collection process, and that if such practices are not stopped, those collectors seeking to adhere to the law will find themselves at a competitive disadvantage. It is therefore vitally important that the protections built into the FDCPA are vigorously enforced. The Bureau is authorized to do so along with our partners at the Federal Trade Commission ("FTC"). In 2016, the Bureau and the FTC took important steps to vindicate the rights set forth in the FDCPA. The CFPB seeks to assure compliance with the FDCPA through its Supervision program and through public enforcement actions. The CFPB is the first federal agency to have the authority to supervise non-depository institutions, including debt collectors, in the same manner that banks 2 and other depositories have long been examined. In 2016, our examinations of debt collectors identified a number of violations of the law, including false representations made by debt collectors to consumers, unlawful fees charged by debt collectors, and illegal disclosure of debts to third parties. CFPB examinations also found instances in which debt sellers sold accounts for collection that did not properly reflect that the accounts were discharged in bankruptcy, were fraudulent, or had already been paid. Where appropriate, the CFPB required debt collectors to provide consumer redress and undertake remedial and corrective actions. Additionally, in 2016 the CFPB brought ten new public enforcement actions involving debt collections and continued litigation in three other such cases that had been filed previously. In the cases that were concluded in 2016, $39 million was paid in restitution for consumers who were impacted by illegal debt collection practices and $20 million in civil penalties.' Likewise, as described more fully in the Report and in the FTC letter included as the Appendix, the FTC brought or resolved 12 debt collection cases in 2016, including a focus on phantom debt collection and a sweep on unlawful text messages and emails as a means of collecting debt. The CFPB also filed din/015 curiae briefs in two appellate court FDCPA actions raising significant legal issues, and assisted the Solicitor General's office in the preparation of two amicusbriefs that were filed in the Supreme Court in cases implicating the FDCPA. Those four cases are still pending. Additionally, three cases before federal courts of appeals in which CFPB filed amicusbriefs in prior years were decided in 2016, two of which had been filed jointly with the FTC. Another important tool through which the Bureau is able to protect consumers is through its Consumer Response program, which receives and processes complaints from consumers who believe they have been mistreated by debt collectors or other providers of consumer financial products or services. In 2016, as in past years, debt collection was the category in which the Bureau received the most complaints from consumers. The most common complaint involved "continued attempts to collect debt not owed." The Office of Consumer Response receives these complaints and, where appropriate, sends them to the debt collector to provide them with the opportunity to respond to or remedy the complaint and/or sends them to other agencies. I These figures include actions related to unlawful collection conduct n violation of the FDCPA, the Consumer Financial Protection Act of 2010 ("CFPA"), or both. 3 The Bureau also continues to provide a variety of resources to consumers who face debt collection attempts and to social services workers and volunteers that serve populations that may face debt collection attempts. One of these resources, "Ask CFPB," provides answers to common questions across a number of consumer financial topics. The debt collection category continues to be one of the most viewed topics.' In 2013, the Bureau created five sample letters which consumers can use to communicate when debt collectors contact them. These letters have since been downloaded approximately 389,800 times. The Bureau also created a financial empowerment training and toolkit called Your Money, Your Goals for use by social services workers and other front-line staff and volunteers working with economically vulnerable consumers. This toolkit covers a variety of financial topics, including debt management and consumer financial protection. As of the end of 2016, more than 13,500 staff and volunteers in social services, legal aid, worker, and community organizations were trained on Your Money, Your Goals, reaching an estimated 600,000 consumers. In enacting the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress granted the CFPB general rulemaking authority to issue regulations under the FDCPA. The Bureau commenced its rulemaking activity in 2013 by issuing an Advance Notice of Proposed Rulemaking. In July 2016, the Bureau released an Outline of Proposals Under Consideration (the "Outline") for those who are defined as "debt collectors" under the FDCPA. At the same time, the Bureau published a Study of Third Party Debt Collection Operations, and preliminary results from the Bureau's Survey of Consumer Views on Debt. On August 25, 2016, the Bureau convened a panel pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). That panel, which was composed of the CFPB, Small Business Administration (SBA), and the Office of Management and Budget (OMB), obtained input from small businesses in the debt collection industry on the possible impact of debt collection rulemaking on their businesses. The Bureau is considering the feedback it received through the SBREFA panel and from other stakeholders subsequent to publication of the Outline. At the same time, the Bureau continues to conduct research and monitor the debt collection market. In January 2017, the Bureau released two studies on the debt collection market: a white 2 4 The Bureau's debt collection consumer education resources can be found at hups://wmppi.consumerfinance.gov/consumer-tools/riebt-collection/. paper about the Online Debt Sales market, which describes websites where charged-off consumer debts can be purchased and outlines potential consumer protection concerns that may arise in the absence of appropriate safeguards; and a groundbreaking research report on Consumer Experiences With Debt Collection, based upon the Bureau's Survey of Consumer Views on Debt. At the CFPB, we believe in a debt collection market where consumers know their rights and are protected from harassment and deception while collectors are able to collect debts in an honest, lawful, and cost-effective manner. On the FDCPA's fortieth anniversary, we remain committed to the law's goal of protecting consumers while ensuring that debt collectors who follow the law and respect consumers are not competitively disadvantaged. Sincerely, lat4As4o Cei.z.x7 Richard Cordray 5 Table of contents Message from Richard Cordray 2 Table of contents 6 Introduction 8 Background 9 Industry Breakdown 10 Market Outlook 12 Consumer complaints 14 Number and types of complaints received 15 Responses to complaints received 19 Bureau supervision of debt collection activities 21 Miscoding of accounts unsuitable for sale 22 Unlawful fees 22 False representations 23 Communication with third parties 24 Debt collection 8177/CW5 briefs 26 Enforcement 6 34 CFPB law enforcement actions 34 Continuation of pre-2016 matters 38 FTC law enforcement actions 40 Education and outreach initiatives 50 Bureau education and outreach initiatives 50 FTC education and public outreach 54 Rulemaking, research, and policy initiatives Bureau rulemaking and research 56 FTC's research and policy development activities 62 Appendix: 7 56 FTC Letter 64 Introduction The Consumer Financial Protection Bureau is pleased to submit to Congress its sixth annual report summarizing activities to administer the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. The Bureau and the Federal Trade Commission ("FTC" or "the Commission") share government enforcement responsibility for the FDCPA. The Commission's activities during the past year are included in this report and a letter from the FTC describing them appears in the Appendix. The CFPB and the FTC work closely to coordinate debt collection enforcement actions and other matters related to debt collection., This report provides a background on the debt collection market; contains an overview of consumer complaints submitted to the CFPB and the FTC in 2016; summarizes the Bureau's supervisory activities in the debt collection market; describes the Bureau's and the Commission's enforcement actions; describes amicus curiae briefs filed in cases related to the FDCPA; presents the CFPB's and FTC's consumer education and outreach initiatives; and discusses developments in the Bureau's rulemaking activities and the FTC's policy and research initiatives. 3 See Memorandum of Understanding between the Consumer Financial Protection Bureau and the Federal Trade Commission (March 2015), available at h(tps://wviopi.1(c.govisystem/files/documents/cooperation agreements/150312f1c-clph-moritclf. As part of this coordination, CFPB and FTC staff regularly meet to discuss ongoing and upcoming law enforcement, rulema king, and other activities, share debt collection complaints, cooperate on consumer education efforts in the debt collection arena, and consult on debt collection rulema king and guidance initiatives. 8 Background Debt collection is an $11.4 billion dollar industry that employs more than 130,000 people across approximately 8,500 collection agencies in the United States.4 The debt collection industry affects millions of Americans. According to a recent CFPB survey of US consumers, about one-third of consumers with credit files — or about 70 million Americans — were contacted by a creditor or third-party debt collector attempting to collect a debt in the past year., Debt collection efforts include calls, letters, filing lawsuits, and other methods to collect alleged debts from consumers. In the course of attempting to collect debts, debt collectors must adhere to a variety of laws and regulations which govern topics as diverse as telephone communications (e.g., the Telephone Consumer Protection Act, or TCPA) and furnishing information to credit reporting agencies (e.g. the Fair Credit Reporting Act, or FCRA) as well as various state statutes. The primary law that governs the conduct of debt collectors is the FDCPA,€which establishes consumer protections in the debt collection process including the rights to dispute a debt and instruct a collector to stop communication about an alleged debt. The FDCPA prohibits debt collectors from harassing and abusing consumers and prohibits them from discussing a consumer's debts with third parties (with some exceptions). The law empowers the CFPB and FTC to enforce its provisions and establishes a private right of action for any person affected by a violation of the FDCPA. The FDCPA also requires the CFPB to 4 Edward Rivera at IBIS World, Debt Collection Agencies in the U5(December 2016), 5 Consumer 6 9 Financial Protection Bureau, Consumer Experiences with Debt Collect/0nd anuary 2017 Fair Debt Collection Practice Act, 15 U.S.C. § 1692 et. seq. submit this report on "the administration of its functions" under the FDCPA and enables it to "obtain ... the views" of other agencies that enforce the FDCPA, such as the FTC.? Industry Breakdown Debt collectors generate most of their revenue from collections of medical debt, student loans, and financial services obligations such as credit cards, auto loans, and mortgages. Financial services are the largest source of revenue for the industry, accounting for more than a third of all debt collection revenue. However, telecommunications debt also accounts for a large share of industry revenue — more than a fifth.8 Government, retail, and medical debt are also significant drivers of industry revenue. FIGURE 1: DEBT COLLECTION MARKET SEGMENTS BY SHARE OF REVENUE 2016 (IBIS WORLD) Government 9% Retail and Commercial 10% Headhunt° 11% 14% Tclocommunications 1-marimal Sem nes 22% 35% 7 15 U.S.C. § 1692m 3 Edward Rivera at IBIS World, Debt Collection Agencies in the US(Decernber 2016). 10 $6.27 billion — more than half the industry's revenue — is generated by firms contracting with creditors to collect their debts on a contingency fee basis, meaning that the creditor and the collector each receive a share of the amount collected. About one-third of debt collection revenue, $3.6 billion, comes from debt buyers, who purchase accounts from the original creditor or other debt buyers and then generally seek to collect on that debt, either themselves or through contingency debt collectors.9 Although they represent about one third of industry revenue, this overstates debt buyers' share of dollars collected, since debt buyer revenue includes all amounts recovered whereas the revenue of contingency collectors includes only the share of recoveries retained by the collector. FIGURE 2 DEBT COLLECTION AGENCY TYPES BY SHARE OF REVENUE, 2016 (IBIS WORLD) Other 8% Fixed-fee 6% Contingent Fee 55% Debt Buying 32% Due to its low fixed costs and high susceptibility to fluctuations in the supply of debt and labor costs, debt collection is a volatile industry with a large number of firms — according to some estimates, about 8,500. 9 Edward Rivera at IBIS World, Debt Collection Agencies in the US(December 2016). 11 The industry has been experiencing consolidation in recent years. According to a study by the Association of Credit and Collection Professionals, there were 25% fewer debt collection agencies in 2013 than in 2005,10 despite industry revenues being slightly higher in 2013.11 Market Outlook The debt collection industry is substantially impacted by the credit cycle, which determines how many charged-off debts are available to collect. As a result of increased consumer debt, especially in non-housing categories where debt collectors are most frequently employed, it appears likely that the availability of debt to collect will increase. This would be especially likely if an unfavorable change in economic circumstances made it more difficult for consumers to pay their obligations. Consumer debt has continued to increase since 2013 and is approaching its 2008 peak. However, growth in consumer debt has been fueled primarily by increases in non-housing debt. In 2016 alone, credit card debt rose $46 billion, or 6.3%, student debt increased by $78 billion, or 6.3%, and auto debt rose by $93 billion, or 8.7%.12 Delinquency rates remain relatively stable, although they have not returned to their pre-crisis levels.13 However, the combination of these levels of debt and an economic downturn could lead to a substantial increase in the amount of delinquent and ultimately charged-off accounts. An increase in portfolios of delinquent debt in the event of a downturn also looks somewhat likely in auto finance. Total outstanding auto debt reached a record high in 2016 9, and lending to 10 ACA International, Ernst and Young, Impact of Third-Party Debt Collection on the National and State Economies (2013, 2011), dvadabiedthtip://vnedmacimiternational.org/advocary/indristry-research-statistics II Edward Rivera at IBIS World, Debt Collection Agencies in the U5(Septem ber 2015). 12 Andrew Haughwout et al. lust Released: Total Household Debt Nears 2008 Peak but Debt Picture Looks Much Different." Liberty Street Economics Federal Reserve Bank of New York. February 16, 2017. h(tp //liherlystreeteconomics neviyorkfed org/20 //02/just-releasecHotal-horisehold-riebt-nears-2002-peak-hritdebt-picture-looks-much-different html 13 Federal Reserve Bank of New York. Quarterly Report on Household Debt and Credit 2016Q4. February 2017 14 Federal Reserve Bank of New York. Quarterly Report on Household Debt and Credit. 2016Q4. February 2017 12 subprime consumers is at a higher level than it has been for more than a decade.I 5 Preliminary results from a study by S&P Global Ratings suggest that net losses on subprime auto loans in the event of a comparatively mild downturn, such as the one between 1998 and 2003, would be higher than the losses that resulted from the 2009 financial crisis.16 This suggests that a downturn, if one occurs, could lead to a significant number of auto deficiencies, which are in some instances are collected by third party debt collectors or sold to debt buyers. Similarly, outstanding credit card debt continues to increase, reaching $927 billion in the third quarter of 2016. The increase in debt in the third quarter was the largest such increase since 2007. The average indebted American household owes about $8,000 in credit card debt. 17 As with auto lending, a potential downturn would likely cause a spike in delinquencies, which could ultimately increase the number of charged-off accounts available for collection. I, Kyle Stock, Moomberg."The Next Financial Crisis Might Be in Your Driveway." February 21,2017. Analysis of data from the Federal Reserve Bank of New York. NI ps://wvop.e.bloo m berg.co min Aws/art ic les/2 01/-02-2" /the-n ext I inancia ight -be-111-yoll r-driveWay 16 William Hoffman. Auto Finance News."SaP Stress Tests Show Rising Subprime Auto Losses." February 12, 2017 16 Alina Comoreanu, WalletHub."2016 Credit Card Debt Study: Trends & Insights!' December 8, 2016 13 Consumer complaints Collecting, investigating, and responding to consumer complaints are integral parts of the CFPB's work.I 8 The CFPB's Office of Consumer Response ("Consumer Response") hears directly from consumers about the challenges they face in the marketplace, brings their concerns to the attention of companies, and assists in addressing these complaints. The CFPB, which began taking consumer complaints about debt collection in July 2013, accepts complaints through its website and by telephone, mail, email, fax, and referral. Consumers submit complaints on the Bureau's website using complaint forms tailored to specific products and can also log on to a secure consumer portal to check the status of a complaint and review a company's response. When completing the complaint form, consumers provide a narrative of the events giving rise to their complaint and can elect to publish a scrubbed narrative on the Bureau's website. While on the website, consumers can chat with a live agent to get help completing a complaint form. Consumers can also call the Bureau's toll-free number to ask questions, submit a complaint, check the status of a complaint, and more.I9 The Bureau answers questions and refers consumers to other regulators or additional resources as appropriate and forwards complaints to companies for review and response. The CFPB's complaint handling process focuses on collecting, investigating, and responding to complaints.20 The Bureau also uses complaints for law enforcement purposes and shares IS 19 20 See Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub, L. No.111-203, § 1021(c)(2) (2010). ("DoddFra n k Act"). The CFPB's U.S.-based contact centers provide services to consumers in more than 180 languages and to consumers who are deaf, have hearing loss, or have speech disabilities via a toll-free telephone number. See Dodd-Frank Act, Pub, L. No. 111-203, §1021(c)(2), 124 Stat. 1376, 1979 (2010). 14 complaint data with the FTC. The FTC uses the Bureau's information, as well as complaints submitted directly to it by consumers and from other federal and state agencies, to compile consumer complaints in its Consumer Sentinel system and makes them available to federal and state law enforcement. The FTC uses consumer complaints generally to monitor the debt collection industry, select targets for investigation, and conduct preliminary analysis that, with further factual development, might reveal or help prove a law violation. As in previous years, debt collection is the most complained about consumer financial product or service in the Bureau's complaint system. As shown in Table 1, in 2016, again the most common issue selected by consumers submitting a complaint related to debt collection is continued attempts to collect a debt that the consumer states is not owed (41%). These consumers often report that debt collectors are contacting them about debts that either have a different balance or have been fully paid. In response to these complaints, third-party debt collectors often close and return the account to their clients, while first-party collectors report that they inform the consumer about the current status of their account and make attempts to reach a resolution. Consumers continue to submit complaints about a lack of debt verification by collectors in response to consumer disputes; in fact, this issue saw the largest percentage increase from 2015 (see Table 2). These consumers report that they were not given enough information to verify a debt. In complaints submitted against third-party collectors especially, some consumers report that they do not have enough information to verify medical debt—often stating that they believed their health insurance covered the expenses. Consumers still commonly report issues with communication tactics used by collectors, though the number of complaints about communication tactics decreased from 2015 (see Table 2). Consumers complain about frequent or repeated calls from collectors. These consumers report that they receive multiple calls weekly or even daily. In complaints submitted against first-party collectors, some consumers report that they receive repeated calls early in their delinquency or during grace periods. Number and types of complaints handled From January 1.2016 through December 31, 2016, the CFPB handled approximately 88,000 debt collection complaints-2,900 more complaints than the prior year. These complaints include 15 first-party (creditors collecting on their own debts) and third-party collections. Table 1 shows the types of debt collection complaints the CFPB has handled, while Table 2 shows the change in complaint volume by issue. TABLE 1 - DEBT COLLECTION COMPLAINTS BY ISSUE Continued attempts to collect debt not owed 41% Disclosure/verification of debt 20% Communication tactics 15% False statements or representafion 9% Taking or threatening an illegal action 9% Improper contact or sharing of information 6% Total debt collection complaints 100% TABLE 2 CHANGE IN COMPLAINT VOLUME BY ISSUE 21 % change Disclosure verification of debt 2015 complaints 12.000 2016 complaints 17.503 Continued attempts to collect debt not owed 5 400 Improper contact or sharing of info False statements or representation 8 100 Communication tactics 15.230 7.EflO Taking or threatening an illegal action Grand Total 21 This 16 13.503 85.100 report is based on dynamic data and may slightly differ from other public reports. 88.000 For each of the six issues listed in Table 1 and Table 2, consumers also select additional, moredetailed sub-issues when submitting a complaint. As indicated in Table 1, the most common debt collection complaint is about continued attempts to collect a debt that the consumer reports is not owed. The vast majority of these consumers report that the debt is not their debt (61%) or that the debt was paid (27%), while the remaining consumers report that the debt resulted from identity theft (8%) or was discharged in bankruptcy (4%). Issues with disclosures or providing information sufficient to verify the debt was the second-most common issue selected by consumers in their complaints (see line 2 in Table 1). If a collector is covered by the FDCPA, the law requires collectors within five days of that communication to provide consumers with a written notice informing them, among other things, of their right to dispute debts. Some consumers, however, complain that debt collectors do not provide this notice (23%). Most consumers who complain about the dispute process raise the concern that when they exercise their rights to dispute debts, collectors do not provide them with documentation that consumers believe collectors need to verify the debt (69%). The complaints related to disputed debts also reveal confusion on the part of consumers as to when and how they can dispute a debt.22 Other consumers report that the company did not disclose that the communication was an attempt to collect a debt (7%). Communication tactics used when collecting debts were the third most common issue complained about in 2016 (see line 3 of Table 1). Many of these types of complaints are about improper telephone calls. The majority of complaints about communication tactics are about frequent or repeated calls (53%). In a consumer complaint, one consumer told us that they were frustrated by the amount of calls they received about a debt they didn't understand. 'After missing multiple calls a day from this company I finally spoke with someone. They had sent my final bill to my old address and !never got it. The person I spoke to at the company corrected my address and arranged to send out a reprint of the bill She waved the ridiculous ($5.00) fee to have the bill reprinted. Pet her know that I would be taking care of the bill as soon as I received it 22 As discussed in Section 6.1, the Bureau has developed and made available a form letter to assist consumers in disputing debts. 17 Notl day later the cads started again. I receiver/ a cal/ this morning by a very pushy caller and was told that/fl was taken off the call list without making payment arrangements my bill would go into collections. 'asked why my file hadn't been updated to show that I was cooperating and s(he)sa their system just doesn't show everything. When I complaMed about their repetitive calls the caller said that legally the system could cad my phone up to 6 times per day This is harassment and also threatening by saying my bill would go into collections. By their admission, even though I was cooperating they were going to call me up to 6 times per day until my bill was paid These are unacceptable business practices. Please look into the company" Consumers report that collectors contact them using alternative methods, in addition to telephone calls. These methods include text messaging, emails, and social media. Other communication tactics complaints relate to reports of companies threatening to take legal action (30%), using obscene, profane, or abusive language (7%), calling after being sent written cease communication notices (6%), or calling outside of the FDCPA's assumed convenient calling hours from 8 a.m. to 9 p.m. at the consumer's location (3%). The majority of complaints about false statements or representations (see line 4 of Table 2) are about attempts to collect the wrong amount from the consumer (66%). In addition, consumers report that companies impersonated an attorney or a law enforcement or government official (18%), indicated the consumer committed a crime by not paying debt (13%), or indicated that the consumer should not respond to a lawsuit (2%). Consumers also report companies taking or threatening to take an illegal action (see line 5 of Table 1). Most of these complaints are about threats to arrest or jail consumers if they do not pay (39%). Other complaints relate to lawsuits including threats to sue on a debt that is too old (29%), seizures or attempts to seize property (11%), being sued without proper notification of the lawsuit (10%), collection or attempts to collect exempt funds such as child support or unemployment 18 benefits (7%), or being sued in a place that is different from where the consumer lives or where the consumer signed the contract (3%). For consumers submitting complaints about improper contact or sharing of information (see line 6 of Table 1), consumers most often report the collector talked to a third party about the debt (55%), contacted the consumer after being asked not to do so (24%), or contacted an employer after being asked not to do so (19%). A less common complaint relates to consumers reporting that they are contacted directly, instead of the debt collector contacting their attorney (2%). Responses to complaints handled The CFPB has sent approximately 41,400 (47%) of the about 88,000 debt collection complaints it has handled to companies for their review and response. The CFPB has also forwarded some of the remaining debt collection complaints to other regulatory agencies (38%), while other complaints were found to be incomplete (10%), or are pending23 with the consumer or the CFPB (5%). 24 Companies have already responded to approximately 37,000 complaints or 89% of the approximately 41,400 complaints sent to them for response. Consumers have disputed approximately 6400 company responses (18%) to their complaints. The following table shows how companies have responded to consumer complaints. TABLE 3 HOW COMPANIES HAVE RESPONDED TO CONSUMER COMPLAINTS TO THE CFPB Closed with explanation 23 24 28,800 70% This category includes complaints that do not include information needed for the CFPB to send to corn pan ies for responses or refer to other regulatory agencies. All complaints handled by the Bureau, including those sent to other regulators, serve to inform the Bureau in its work to supervise corn pan ies, to enforce consumer financial laws, to write better rules and regulations, and to educate and engage consumers. 19 Closed with non-monetary relief 4,900 12% Company did not provide a timely response 3,400 8% Company reviewing 1500 4% Closed (without relief or explanation) 1,400 3% Closed with monetary relief 400 1% Administrative response 1,200 3% Total Complaints Sent to Companies for Response 41,400 100%25 Company responses include descriptions of steps taken or that will be taken, communications received from the consumer, any follow-up actions or planned follow-up actions, and categorization of the response. Response category options include "closed with monetary relief," "closed with non-monetary relief," "closed with explanation," "closed," and other administrative options. Monetary relief is defined as objective, measurable, and verifiable monetary relief to the consumer as a direct result of the steps taken or that will be taken in response to the complaint. Non-monetary relief is defined as other objective and verifiable relief to the consumer as a direct result of the steps taken or that will be taken in response to the consumer's complaint. "Closed with explanation" indicates that the steps taken by the company in response to the complaint included an explanation that was tailored to the individual consumer's complaint. For example, this category would be used if the explanation substantively meets the consumer's desired resolution or explains why no further action will be taken. "Closed" indicates that the company closed the complaint without relief — monetary or non-monetary — or explanation. Consumers are given the option to review and provide feedback on all company closure responses. 25 Due to rounding, volume and percentages for each corn pany response category may not add up to the total. 20 Bureau supervision of debt collection activities Under the Dodd-Frank Act, the CFPB has the authority to supervise certain bank and nonbank entities that offer or provide consumer financial products or services.26 In addition, for other nonbank markets for consumer financial products or services, the Bureau has the authority to supervise "larger participants" as the Bureau defines by rule. Under the Bureau's larger participant rule for the debt collection market, the Bureau has supervisory authority over any firm with more than $10 million in annual receipts from consumer debt collection activities. In 2016, the Bureau's supervision of debt collectors uncovered a number of violations of the FDC PA. 27 26 Specifically, the Bureau has authority to supervise certain banks and non bank entities in the residential mortgage, payday lending, and private education lending markets. The Bureau also has the authority to supervise non bank entities that offer or provide consumer financial products or services where it has "reasonable cause to determine, by order, after notice to the person and a reasonable opportunity for such person to respond...that such person is engaging, or has engaged, in conduct that poses risks to consumers with regard to the offering or provision of consumer financial products or service!' 12 U.S.C. § 5514(a)(1fiCT 22 In deference to the importance of confidentiality and consistent with the policies of the prudential regulators, the Bureau treats information obtained from companies through the supervisory process as confidential and privileged. See 12 C.C.R. pt. 1070; CFPB Bulletin 12-01: The Bureau's Supervision Authority and Treatment of Confidential Supervisory In formation (January 2012) available at hfipadi les.co nsu derfina nce.gov/f/2012/01/GC bulletin 1)see also 12 U.S.C. 44 1821(0, 1828(x). 21 Miscoding of accounts unsuitable for sale by debt sellers The FDCPA prohibits unfair acts or practices in connection with the collection of a debt. 28 During one or more examinations, examiners determined that debt sellers, as a result of widespread coding errors, sold thousands of debts that did not properly reflect that: (1) the accounts were in bankruptcy, (2) the debt sellers had concluded the debts were products of fraud, or (3) the accounts had been settled in full. The relevant accounts sold were in, or likely to be subject to, collections. Supervision concluded that this practice was unfair. In some cases, coding failed to reflect a pending bankruptcy proceeding when the debt seller had received notice that the consumer had filed for bankruptcy. In other instances, one or more debt sellers either failed to code accounts to indicate that a fraud claim was pending or failed to code accounts to indicate that fraud had occurred. In other cases, one or more debt sellers failed to include codes indicating that the debt seller(s) had settled the relevant accounts in full. These errors caused or were likely to cause substantial injury in the form of subjecting consumers to debt collection efforts either: (1) prohibited by the automatic stay provisions of the Bankruptcy Code29 01 (2) on debts for which the consumer was not responsible because the relevant accounts were impacted by fraud or were settled in full. Supervision directed one or more debt sellers to redress consumers impacted by each category of the three coding errors and to enhance service provider oversight to include critical vendors performing collections and processes relating to debt sale arrangements, such as suppliers providing coding services. Unlawful fees The FDCPA limits situations where a debt collector may impose convenience fees. Under Section 808(1) of the FDCPA,30 a debt collector may not collect any amount unless such amount is expressly authorized by the agreement creating the debt or permitted bylaw. In one or more exams, examiners observed that one or more debt collectors charged consumers a "convenience fee" to process payments by phone and online. Examiners determined that this convenience fee 12 USC 5531(c); 5536(a)(1)(B). USC 362. 30 15 USC 1692f(1). 26 29 11 22 violated Section 808(1) where the consumer's contract does not expressly permit convenience fees and the applicable state's law was silent on whether such fees are permissible. Additionally, under Section 807(2)(B) of the FDCPA,31 a debt collector may not make false representations of compensation which may be lawfully received by the debt collector. Examiners determined that collectors who demanded these unlawful fees, stated that the fees were "nonnegotiable," or withheld information from consumers about other avenues to make payments that would not incur the fee after the consumer requested such information violated Section 807(2)(B) of the FDCPA. Supervision also found that one or more debt collectors violated Section 808(1) of the FDCPA by charging collection fees in states where collection fees were prohibited or in states that capped collection fees at a threshold lower than the fees that were charged. Examiners also observed a compliance management system weakness at one or more collectors that had not maintained any records showing the relationship between the amount of the collection fee and the cost of collection. The relevant entities have undertaken remedial and corrective actions regarding these violations; these matters remain under review by the Bureau. False representations Section 807(10) of the FDCPA prohibits debt collectors from using any false representation or deceptive means to collect a debt or obtain information concerning a consumer. 32 Examiners determined that one or more collectors falsely represented to consumers that a down payment was necessary in order to establish a repayment arrangement, when the collectors' policies and procedures included no such requirement. In other cases, one or more collectors falsely represented that the only option for repayment was using a checking account, when the debt collectors' policies and procedures did not limit repayment to checking accounts. 2 32 15 USG 1692e(2)(13). 15 USC 1692e(10). 23 At one or more debt collectors, examiners identified collection calls where employees purported to assess consumers' creditworthiness, credit scores, or credit reports, which were misleading because collectors could not assess overall borrower creditworthiness. Collectors also misled consumers by representing that an immediate payment would need to be made in order to prevent a negative impact on consumers' credit. In one or more instances, examiners observed that collectors had impersonated consumers while using the relevant creditors' consumer-facing automated telephone system to obtain information about the consumer's debt. Examiners concluded that this constituted a false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer. On one or more collection calls, examiners heard collectors tell consumers that the ability to settle the collection account was revoked or would expire. Examiners determined that these statements were false or were a deceptive means to collect a debt because the consumers still had the ability to settle. The relevant entities have undertaken remedial and corrective actions regarding these violations; these matters remain under review by the Bureau. Communication with third parties Section 805 of the FDCPA33 prohibits debt collectors from communicating in connection with the collection of a debt with persons other than the consumer, unless the purpose is to acquire information about the consumer's location. Under Section 804 of the FDCPA,34 when communicating with third parties to acquire information about the consumer's location, a collector is prohibited from disclosing the name of the debt collection company unless the third party expressly requests it. At one or more debt collectors, examiners identified several instances where collectors disclosed the debt owed by the consumer to a third party. These third-party communications were often caused by inadequate identity verification during telephone calls. Additionally, examiners 44 15 USC 1692c(b). 34 15 USC 1 692b(1). 24 observed several instances where collectors identified their employers to third parties without first being asked for that information by the third party. The relevant entities have undertaken remedial and corrective actions regarding these violations; these matters remain under review by the Bureau. 25 Debt collection amicus briefs In the past year, the Bureau has filed briefs as amicus curiae(friend of the court) in four cases arising under the FDCPA. Two of these briefs were filed in the federal courts of appeals, and two of these briefs were filed in the U.S. Supreme Court through the Office of the Solicitor General. In addition, three cases in which the Bureau filed amicusbriefs in prior years were decided in 2016. Collection of Protected Social Security Funds. Arias amicus brief On October 26, 2016, the Bureau filed an amicus brief in the Second Circuit case of ATL75 v Gutman, Mintz, Baker & Sonnenfeldt, PCto address when a debt collector violates the FDCPA in the course of garnishing money from an account containing the consumer's Social Security or other protected funds.35 The consumer in this case alleged, among other things, that a debt collection law firm violated the FDCPA by telling a consumer that he could protect his Social Security benefits from forcible collection only by showing that he had not commingled his benefits with non-exempt funds. The district court dismissed the consumer's suit for failure to state a claim of either deceptive or unfair conduct in violation of the FDCPA. The Bureau's brief argued that the consumer had stated valid deception and unfairness claims. The brief argued that the debt collection law firm's alleged conduct was deceptive because it misrepresented what the consumer had to do to avoid garnishment of his Social Security benefits. The Bureau's brief explained that the law firm's alleged misrepresentation would violate the FDCPA because the misstatement had the capacity to discourage the consumer from fully availing himself of his legal rights. In particular, the Bureau contended that the law firm's 35 Brief of Arnicus Curiae, Arias v Gutman, Mintz, Baker & _Cannon feldt, PC, No.16-2165 (2d Cir. Oct. 28,2016), available at hit ps.//wunv con Sll merlinance gov/policy-compliance/amicus/hriels/ands-v-gritman-minlI-hakersonnerifeld(-pc/ 26 misrepresentation would have led a consumer to believe that he had to surmount a potentially daunting (but evidently fictitious) procedural hurdle to safeguard his exempt Social Security benefits from garnishment. The Bureau argued that the debt collection law firm's alleged conduct would also constitute unfair conduct. This is because the consumer alleged that the law firm filed a baseless pleading with the purpose of intimidating the consumer into forfeiting his right to avoid garnishment of his Social Security benefits. The Bureau argued that the district court had erred by relying on the fact that the law firm used the right procedures to file its apparently baseless objection: Timely filing and service are no substitute for a good faith, reasonable basis to act. Likewise, the Bureau explained that the existence of a potential state law remedy for the law firm's conduct did not deprive the consumer of his rights under the FDCPA. The court has not yet issued a decision in this case. Debt Collector Letterhead: Sheriff amicus brief On March 2,2016, the Solicitor General, with the assistance of the Bureau, filed an amkusbrief in the Supreme Court case of Sheriff v &Nieto address 1) whether special counsel appointed by the attorney general of Ohio to collect debts owed to the state are exempt from the FDCPA's definition of "debt collector," and 2) whether the special counsel's use of the letterhead of the Ohio attorney general violates the FDCPA.33 The FDCPA defines the term "debt collector" to include any person who regularly collects or attempts to collect ... debts owed or due another."33 But the definition specifically excludes "any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor," and "any officer or employee of ... any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties."38 The special counsel argued that they were officers of the state, and thus exempt from the FDCPA. They also argued that, even if they were not exempt, they did not violate the FDCPA because, even 36 Brief of Am icus Curiae, Sherriff y Wilk, No. 15-338 (U.S. Mar. 2,2016), available at httilS:/hAnAnA7COnSUMerf ir1;111CA.80V/pOliCy-CORlpiii111CP/illfliCUS/1)110S/ShPrif r-giiiie/. 37 15 U.S.C. §1692a(6). 38 15 U.S.C. §1692a(6)(A), (Q. 27 though their debt collection letters used the letterhead of the Ohio attorney general, the letters accurately represented their role as special counsel. The dIrdal5 brief argued that the special counsel were not state officers because they did not occupy any state office, and did not exercise any portion of the state's sovereignty. Instead, their duties were defined by contracts that declared them to be independent contractors. The brief pointed out that the FDCPA draws a distinction between a creditor's use of in-house personnel to collect debts, and a creditor's use of outside contractors to perform the same function. The FDCPA applies to the latter, but not to the former. The brief argued that it would subvert the basic purpose of the FDCPA to exempt Ohio's use of independent contractors from the Act's coverage. The brief also argued that whether the special counsel's use of the letterhead of the Ohio attorney general was "false, deceptive, or misleading" should be judged from the perspective of an "unsophisticated consumer" (also referred to as the "least sophisticated consumer"). Accordingly, summary judgment was not appropriate because a reasonable jury could conclude that the use of the letterhead violated the FDCPA. The purpose of a letterhead is to identify the sender of the letter. Thus, a jury could determine that the special counsel's use of the letterhead falsely implied that special counsel worked within the office of the Ohio attorney general, not as independent contractors. The FDCPA specifically prohibits false representations as to the source of a debt collection letter. On May 16, 2016, the Supreme Court resolved the case in favor of the special counse1.39 The Court assumed without deciding that the special counsel were not exempt from the FDCPA as officers or employees of the state. But it sided with the special counsel because it did not believe that special counsel's use of the letterhead created by false or misleading representation. The letterhead identifies the principal — Ohio's Attorney General — and the signature block names the agent — a private lawyer hired as outside counsel to the Attorney General."40 The Court held it significant that the attorney general required the special counsel to use the attorney general's letterhead. The Court also limited its decision to "special counsel" and noted that "considerations relevant to that category may not carry over to other debt-collector relationships."41 39 Sheriff v Wilk, 136 S.Ct, 1594(2016). 4° Id 41 at 1601. Id. at 1601 n.5. 28 Article Ill Standing: Bock amicus brief On June 3,2016, the Bureau filed a supplemental amicus brief in the Third Circuit in Bock V. Pressler & Pressler, LIP, to address consumers' Article III standing to bring suit under the FDCPA.42 In this case, a consumer brought suit against a debt-collection law firm that filed a state-court debt-collection against him. The consumer alleged that the firm violated the FDCPA by falsely representing that an attorney was meaningfully involved in filing the action. In 2015, the Bureau and the FTC had jointly filed an amicusbrief in the case arguing that a law firm violates the FDCPA when it files a debt-collection lawsuit without any attorney meaningfully reviewing the case first.43 In the Bureau's supplemental filing in 2016, the Bureau addressed the consumer's Article III standing to bring this suit in light of the Supreme Court's decision in Spokeo v Robins, 136 S. Ct. 1540 (2016). The Bureau's supplemental amicusbrief argued that a false representation made to a consumer in violation of the FDCPA is a concrete harm sufficient to support a consumer's standing. On June 26, 2016, the Third Circuit issued an order remanding the case to the district court for a determination on the consumer's Article III standing. Bankruptcy Proofs of Claim: Midland Funding amicus brief On December 23, 2016, the Acting Solicitor General, with the assistance of the Bureau, filed an dMiCLIS brief in the Supreme Court in Mid/and Funding LLC vjohnson to address whether a debt collector violates the FDCPA by filing an accurate proof of claim in a bankruptcy proceeding for an unextinguished time-barred debt that the creditor knows is judicially unenforceable.44 The FDCPA bars a debt collector from "us[ing] any false, deceptive, or misleading representation or means in connection with the collection of any debt," and specifically bars debt collectors from 42 43 Supplemental Brief of Amicus Curiae, Bock v Pressler& Pressler, LIP, No. 15-1056 (3d Cir. _June 3, 2016), available dthtlps /hAevon Consumerfinanre gov/poliry-rompliance/ammus/briefs/bock-v-pressler-pressler/. Brief of Amici Curiae, Bock v Pressler & Pressler, LIP, No, 15-1056 (3d Cir. Aug. 13, 2015), available at https //,,oppAe consumed mance gov/Policy-rompliance/amirLls/1” iefs/bork-pressler-pressler/ 44 Brief of Am icus Curiae, https / 29 Midland Funding LLC vjohnson, No.16-348 (U.S. Dec. 21,2016), available at consumed mance gov /policy-compliance/ armaisIbriefsinidlancl-ILinding-Ilr-v-johnson/ making a "false representation of... the character, amount, or legal status of any debt."45 The Act also provides that "[a] debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt."46 Prior judicial precedent holds that a debt collector violates these prohibitions when it files a state-court collection action against a consumer on a debt for which the statute of limitations has expired. In this case, the debt collector argued, however, that the FDCPA does not prohibit from filing a proof of claim in a consumer's bankruptcy proceeding on debt that is known to be timebarred. The debt collector also argued that, if the FDCPA did contain that prohibition, its enforcement would be precluded by the provisions of the Bankruptcy Code. The government's amkusbrief argued that the FDCPA did not permit a debt collector to knowingly file a proof of claim on time-barred debt in a consumer's bankruptcy proceeding. The brief explained that the Bankruptcy Code does not authorize the filing of a proof of claim known to be unenforceable but, instead, contemplates that such a claim will be disallowed and provides for sanctions and other remedies for abuse of the bankruptcy process. In this context, the brief argues that debt collectors that file a proof of claim are making a representation that the filer has a goodfaith basis for believing that the claim is enforceable in bankruptcy. Where that representation is false or misleading, the brief argues that the debt collector has violated the FDCPA's prohibitions on misrepresentations and unfair debt collection practices, and that this violation can result in real harm for consumers who are undergoing the bankruptcy process. The court has not yet issued a decision in this case. Definition of "debt": Franklin case On December 11,2015, at the invitation of the court the Bureau and the Federal Trade Commission jointly filed an amkusbrief in Franklin v Parking Revenue Recovery5ervices, taking the position that an allegedly unpaid parking fee of $1.50 and a $45 nonpayment penalty constituted 45 15 U.S.C. § 1692e, 1692e(2)(A), 46 15 U.S.C. § 1692f. 30 "debt" covered by the FDCPA.47 In a decision last year, the Seventh Circuit agreed with the joint agency position.48 The court grounded its decision in the FDCPA's definition of "debt," which refers to an "obligation of a consumer to pay money arising out of a transaction."49 The court explained that this phrase is "a broad reference to many different types of business dealings between parties," but includes only those obligations that are created by the contracts the parties used to give legal force to their transaction."50 The court concluded that the payment obligations at issue were debts because they arose out of a contract between the parking lot operator and the consumer, and not out of a tort or a violation of a municipal ordinance. In reaching this conclusion and reversing the district court, the Seventh Circuit rejected the district court's analogy comparing a consumer's alleged failure to pay a contractual debt to theft of services, which generally do not give rise to FDCPA-covered debts. Non-judicial foreclosure: Ho case On August 7,2015, the Bureau filed an 8177k115 brief at the invitation of the Ninth Circuit in Ho V. Recon Trust Co., NA, arguing that a trustee who forecloses on a deed of trust in a non-judicial action in California can qualify as a "debt collector" under the general definition of that term in the FDCPA.51 In a 2-1 decision, the Ninth Circuit concluded that the trustee was not a debt collector because it was not attempting to collect money from the plaintiff, but instead was attempting to retake and resell the consumer's secured property. The court reasoned that, in selling the property, a trustee collects money from the purchaser of the home and not money owed by the consumer, and 47 Brief of Am ici Curiae, Franklin v Parking Revenue Recovery Servs., Inc, No, 14-3774 (7th Cir. Dec.11, 2015), available at h(tps //uluppi conslimerfinance gov/policy-compliance/arnicus/brief ing no correlate for small depository financial institutions, the Bureau created this Advisory Council to facilitate a similar opportunity for credit unions to share insights regarding operational and technical considerations, credit union business practices, and the unique needs of their customers and community. This group also provides timely and pertinent information about how Bureau policies impact the credit union industry. The Advisory Council shall advise generally on the Bureau's regulation of consumer financial products or services provided by credit unions and other related topics. To carry out the Advisory Councils purpose, the scope of its activities shall include providing information and analysis in support of recommendations to the Bureau. The output of Advisory Council meetings should serve to better inform the 0)1'13's policy development, rulemaking, and engagement functions as they relate to credit unions. 4. Description of Duties. The duties of the Advisory Council are solely advisory and shall extend only to the submission of advice and recommendations to the Bureau 'elating to the activities and operations of credit unions, which shall be non-binding on the Bureau. To ensure understanding of compliance and regulatory challenges faced by credit unions, inclusion on the Advisory Council will be limited to credit union employees. No determination of fact or polic> will be made by the Advisory Council, and the Advisory Council will have no formal decision-making role and no access to confidential supervisor' or other confidential information. 5. Agency Or Official to Whom the Committee Reports. 1 CHARTER OF THE CRUM] UNION ADVISORY COUNCIL shall serve at the pleasure of the Director. All members appointed by the Director shall serve at the pleasure of the Director. The Advisory Council will be composed exclusively of representatives of the credit union industry as described above. No Special Government Employees and no Regular Government Employees are expected to serve on the Advisory Council. 13. Subcommittees. The Bureau may establish and dissolve subcommittees, in consultation with the Advisory Council. Any subcommittees shall report back to the Advisory Council. Subcommittees may include individuals who are members of the Advisory Council. Committees may, from time to time, with the approval of the DFO, call on individuals who are not members of the Advisory Council (including Bureau staff), for the sole purpose of providing specific domain expertise and knowledge to the subcommittee. These are not temporary members of the subcommittee. Subcommittees, if any, may not provide advice or work products directly to the Bureau. 14. Reeordkeeping. The records of the Advisory Council and any subcommittees thereof will be handled in accordance with General Records Schedule 6.2 and applicable agency records disposition schedule. The records will be available for public inspection and copying, subject to the Freedom of Information Act, 5 U.S.C. 552. 15. Filing Date. This Council is authorized to meet and take action as of the date of the filing of this charter on - 7-, 2017. This charter has been filed with the Director of the CFPB, the U.S. Senate Committee on Banking, !lousing, and Urban Affairs, the U.S. House of Representatives Committee on Financial Services, and the Committee Management Secretariat of the General Services Administration, and furnished to the Library of Congress. Signed: Date: Richard Cordray Director Consumer Financial Protection Bureau 3 CHARTER OF THE CREDIT UNION ADVISORY COUNCIL / Consumer Financial Protection Bureau Charter of the CFPII's Consumer Advisory Board a. Committee's Official Designation. Consumer Advisory Board ("the Board"). 2. Authority. This statutory committee is established bv the Consumer Financial Protection Bureau ("the Bureau") pursuant to Section 1014(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"), and in accordance with the Federal Advison- Committee Act (FACA) as amended, 5 li.S.C., App. 2. 3. Objectives and Scope of Activities. The purpose of the Board is outlined in Section 1014a) of the Dodd-Frank Act, which states that t he Board shall "advise and consult with the Bureau in the exercise of its functions under the Federal consumer financial laws" and "provide information on emerging practices in the consumer financial products or services industry, including regional trends, concerns, and other relevant information." 'lb carry out the Board's purpose, the scope of its activities shall include providing information, analysis, and recommendations to the Bureau. The Board tvill general's serve as a vehicle for n)arket intelligence and expertise for the Bureau. Its objectives will include identifying and assessing the impact on COTISIlmers and other market participants of new. emerging, and changing products, practices, or services. 4. Description of Duties. The duties of the Board are solely advisors- and shall extend only to the submission of advice and recommendations to the Bureau. The Board members svill advise and consult with the Director and the Bureau on matters related to the Bureau's functions under the Dodd- Frank Act through coalmine° and subcommittee meeting attendance and participation, fact and information exchange, submission of individual advice, and other preparatory and ad Min istrative mu t:. The Board will time no for decision- making role and no access to confidential supervisory or other confidential information. 5. Agency or Official to Whom the Conunittec Reports. The Board reports to the Director of the Consumer Financial Protection Bureau. 6. Support. The Bureau's Advisory Board and Councils office will support the Board, as deemed necessan for the Board's performance, and shall ensure compliance with requirements laid out in the Dodd-Frank Act and the Federal Advisory Committee Act. In addition. the Bureau will provide additional support required for the Board's activities to the extent permitted by law and subject to availability of resources. 7. Estimated Annual Operating Cost and Staff Years. The estimated annual operating cost is about Ssoo,000 including staff time. Staff support is approximately 3 person-year(s). 8. Designated Federal Officer. 1 CI IARI FR 01 THE CONSUMER ADVISORY BOARD The Designated Federal Officer ("DFO") is the Advisory Board and Councils office Staff Director ("Staff Director"), who is a full-time or permanent part-time employee. The DFO shall ensure that the Board operates in accordance with the statutory requirements under the DoddFrank Act, the Federal Advisory Committee Act, and the terms of the charter. The DEO, or alternate DFO, will approve or call all of the Board and subcommittee meetings, if any, prepare and approve all meeting agendas, attend all Board and subcommittee meetings, adjourn any meeting when determined to be in the public interest, and chair meetings )'hen directed by the Bureau Director. 9. Estimated Number and Frequency of Meetings. The Board shall meet in person from time to time at the call of the DFO, but at a ininim um. shall meet at least two times in each year. 10. Duration. This is a continuing advisory board as stated under section 1014 of the Dodd-Frank Act. The Board will operate in accordance with this charter, the term of which expires pursuant to section IL It Termination. this Charter will expire two years after the date that this Charter is filed unless renewed by appropriate action. L2. Membership and Designation. The Director shall appoint the members of the Board. Section 1014(b) of the Dodd -Frank Act provides: "In appointing the members of the Consumer Advisory Board, the Director shall seek to assemble experts in consumer protection, financial service& community de x elopment, fair lending and civil rights, and consumer financial products or services and representatives of depository institutions that primarily sem: underserved communities, and representatives of communities that have been significantly impacted by higher-priced mortgage loans, and seek representation of the interests of covered persons and consumers. without regard to party affiliation." The Board shall consist of no fewer than approximateh in members including at least the six members appointed upon the recommendation of the regional Federal Reserve Bank Presidents on a rotating basis. All members appointed by the Director shall serve at the pleasure of the Director. The Board may be composed of a mixture of representatives and Special Government Employees (SCEs). 13. Subcommittees. The Bureau may establish and dissolve subcommittees, in consultation with the Board. Any subcommittees shall report back to the Board. Subcommittee membership may include indi) iduals who are members of the Board. Subcommittees may, from time to time, with the approval of the DEO, call on individuals who are not members of the Board (including Bureau staff). for the sole purpose of providing specific domain expertise and knowledge to the subcommittee. These are not temporary members of the subcommittee. The subcommittees, if any, may not provide advice or IN ork products directly to the Bureau. 14. Recordkeeping. The records of the Board and any subcommittees will he handled in accordance with General 2 CHARTER OF THE CONSUMER ADVISORY BOARD Records Schedule 6.2 and applicable agency records disposition schedule. The records will be available for public inspection and copying, subject to the Freedom of Information Act, 5 U.S.C. 552. 15. Filing Date. This Council is authorized to meet and take action as of the date of the filing of this charter on '172017. This charter has been filed with the Director of the CFPB, the U.S. Senate Committee on Banking, Housing, and Urban Affairs, the U.S. House of Representatives Committee on Financial Services, and the Committee Management Secretariat of the General Senices Administration, and furnished to the Library of Congress. Signed: 70. / / k(1-t / Richard Cordray Director Consumer Financial Protection Bureau 3 CHARTER OF THE CONSUMER ADVISORY BOARD Date: z/22/i 2 Consumer Financial Protection Bureau Charter of the CFPB's Academic Research Council 1. Committee's Official Designation (Title). Academic Research Council ("the Council" or the "ARC). 2. Authority. Pursuant to the executive and administrative powers conferred on the Consumer Financial Protection Bureau ("CFPB" or "Bureau") by Section 1012 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"), the Director of the Consumer Financial Protection Bureau ("Director") establishes the discretionary Academic Research Council under agency authority in accordance with the provisions of the Federal Advisory Committee Act, as amended, 5 U.S.C., App. 3. Objective and Scope of Activities. The Council will provide the Bureau's Office of Research technical advice and feedback on research methodologies, data collection strategies, and methods of analysis. Additionally, the Council ‘vill provide both backward- and forward-looking feedback on the Office of Research's research N‘ oil( and will offer input into its research strategic planning process and research agenda. 4. Description of Duties. The duties of the Council are solely advisory and shall extend only to the submission of advice and recommendations to the Bureau. No determination of fact or policy will be made by the Council, and the Council will have no formal decision-making role. 5. Agency or Official to Whom the Committee Reports. The Council shall report to the Bureau's Assistant Director of the Office of Research 6. Support. The Bureau's Advisory Board and Councils Office and the Office of Research will support the Council's activities to the extent permitted by law and subject to the availability of resources and shall ensure compliance with requirements laid out in the Federal Advisory Committee Act, as amended. 7. Estimated Annual Operating Cost and Staff Years. The estimated annual operating cost is approximately S60,000 per 'ear. It is estimated that CFPB annual staff support is 0.5 person years. 8. Designated Federal Officer. The Designated Federal Officer ("D170") is the Assistant Director of the Office of Research, who is a full-time or permanent part time employee. The DFO shall serve as 1 CHARTER OF THE ACADEMIC RESEARCH COUNCIL the Council's Chair. The DFO shall ensure that the Council operates in accordance with the requirements under the Federal Advisory Committee Act and the terms of the charter. The DFO (or alternate DFO) will approve or call all of the Council and Council subcommittee meetings, if any, prepare and approve all meeting agendas attend all Council and subcommittee meetings, adjourn any meeting when determined to be in the public interest, and chair meetings when directed by the Bureau Director. 9. Estimated Number and Frequency of Meetings. 'The Council will convene in person from time to time at the call of the DFO, but at a minimum shall meet annually. Council members may also make additional i-isits to the Bureau or participate in additional meetings for educational or other research-related Purposes. no. Duration. The Council will be needed on a continuing basis. n. Termination. This Council will terminate two years after the date that this Charter is filed unless renewed prior to that date by appropriate action. Memberships and Designation. The Council will be composed of approximately nine members. Council members will be designated as special government employees (SCEs) and will serve four-year terms. Membership can be renewed for additional terms at the option of the Assistant Director of the Office of Research. 12. All members are appointed by the Director and shall serve at the pleasure of the Assistant Director of the Office of Research. Subcommittees. 'The Office of Research may form subcommittees of the Council for any purpose consistent with this charter. Any subcommittees shall report back to the Council. Subcommittee membership may include individuals who are members of the Council. Committees may, from time to time, with the approval of the DM, call on individuals who are not members of the Council (including staff of the Bureau) for the sole purpose of providing specific domain expertise and knowledge to the subcommittee. These are not temporary members of the subcommittee. The subcommittees, if any, may not provide advice Or work products directly to the Bureau. 14. Recordkeeping. The records of the Council and an subcommittees thereof will be handled in accordance with General Records Schedule 6.2 and applicable agency records disposition schedule. 2 CHARTER OF THEACADEMIC RESEARCH COUNCIL The records vill be available for public inspection and copying, subject to the Freedom of Information Act, 5 U.S.C. 552. 15. Filing Date. This Council is authorized to meet and take action as of the date of the filing of this charter on 3 1.• 2017. This charter has been filed with the Director of the CFPB, the U.S. Senate Committee on Banking, Housing, and Urban Affairs, the U.S. House of Representatives Committee on Financial Services, and the Committee Management Secretariat of the General Services Administration, and furnished to the Library of Congress. Signed: l4.0 C7;0leile Richard Cordray Director Consumer Financial Protection Bureau 3 CHARTER OF THE ACADEMIC RESEARCH COUNCIL Date: Consumer Financial Protection Bureau Charter of the CFPB's Community Bank Athisory Council 1. Committee's Official Designation. Community Bank Advisory Council ("the Advisory Council" or the "CBAC"). 2. Authority. Pursuant to the executive and administrative powers conferred on the Consumer Financial Protection Bureau ("CFPB" or "Bureau') by Section 1012 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act), the Director of the Consumer Financial Protection Bureau ("Director") establishes the discretionary Community Bank Advisory Council under agency authority in accordance with the provisions of the Federal Advisory Committee Act, as amended, 5 U.S.C., App. 2. 3. Objectives and Scope of Activities. The purpose of the Advisory Council is to advise the Bureau in the exercise of its functions under the federal consumer financial laws as they pertain to community banks with total assets of Si 0 billion or less. The Bureau's supervisory process provides an opportunity for learning and insight into the operations of financial institutions; having no correlate for small depository financial institutions, the Bureau created this Advisory Council to facilitate a similar opportunity for community banks to share insights regarding operational and technical considerations, community banking industry business practices, and the unique needs of their customers and communities. This group also provides timely and pertinent information on how Bureau policies impact community banks. The Advisory Council shall advise generally on the Bureau's regulation of consumer financial products or services provided by community banks and other topics assigned to it by the Director, as they relate to community banks. To carry out the Advisory Council's purpose, the scope of its activities shall include providing information and analysis in support of recommendations to the Bureau. The output of Advisory Council meetings should serve to better inform the CFPB's policy development, rulemaking, and engagement functions as they relate to community banks. 4. Description of Duties. The duties of the Advisory Council are solely advisory and shall extend only to the submission of advice and recommendations to the Bureau relating to the activities and operations of community banks, which shall be non-binding on the Bureau. To ensure understanding of compliance and regulatory challenges faced by community banks, inclusion on the Advisory Council will be limited to community bank employees. No determillatiell of fact or policy rill be made by the Advisory Council. and the Advisory' 1 CHARTER OF THE COMMUNITY BANK ADVISORY COUNCIOL Council vill have no formal decision-making role and no access to confidential supervisory or other confidential information. 5. Agency or Official to Whom the Committee Reports. The Advisoq- Council reports to the Director. 6. Support. The Bureau's Advisory Board and Councils office \vitt support the Advisory Councils activities to the extent permitted by law and subject to the availability of resources and shall ensure compliance with requirements laid out in the Federal Adyisoqi Committee Act, as amended. 7. Estimated Annual Operating Costs and Staff Years. The estimated annual operating cost is about 8300,000 per year, including staff time. It is estimated that CI-TB annual staff support is 2 person-years. 8. Designated Federal Officer. The Designated Federal Officer ('DFO') is the Advisory Board and Councils office Staff Director ("Staff Director"). n ho is a full-time or permanent part-time employee. The DFO shall ensure that the Advisory Council operates in accordance with the requirements under the Federal Advisory Committee Act and the terms of the charter. The DFO (or alternate IWO) or will approve or call all of the Advisory Council committee and Advisory Council subcommittee meetings. if am prepare and approve all meeting agendas. attend all Advisory Council and subcommittee meetings. adjourn any meeting when determined to be in the public interest, and chair meetings when directed by the Bureau Director. 9. Estimated Number and Frequency of Meetings. The Advisor • Council shall meet in person from time to time at the call of the DFO, but at a minimum, shall meet at least two times in each year. to. Duration. The Advisory Council vill be needed on a continuing basis. H. Termination. This Advisory Council will lei minatc o ears after the date that this Charter is filed unless renewed prior to that date by appropriate action. 12. Menabership and Designation. The Director shall appoint the members of the Advisory Council. In appointing members to the Advisory Council, the Director shall seek to assemble members with diverse points of view, institution asset sizes, and geographical backgrounds. Only 2 CHARTER OF THE COMMUNITY BANK ADVISORY COUNCJOI bank or thrift employees (CEOs, compliance officers, government relations officials, etc.) will be considered for membership. Membership is limited to employees of banks and thrifts with total assets of $10 billion or less that are not affiliates of depository institutions or credit unions \NMI total assets of more than $to billion. The Advisory Council ill consist of approximately 15 to 20 members. All members shall serve at the pleasure of the Director. All members appointed by the Director shall sen:e at the pleasure of the Director. The Advisory Council will be composed exclusively of representatives of the community banking industry as described above. No Special Government Employees and no Regular Government Employees are expected to serve on the Advisory Council. 13. Subcommittees. The Bureau may establish and dissolve subcommittees, in consultation with the Advisory Committee. Any subcommittees shall report back to the Advisory Council. Subcommittees may include individuals who are members of the Advisory Council. Committees may, from time to time, with the approval of the DFO, call on individuals who arc not members of the Advisory Council (including Bureau staff), for the sole purpose of providing specific domain expertise and knowledge to the subcommittee. These are not temporary members of the subcommittee. The subcommittees, if am, may not provide advice or work products directly to the Bureau. 14. Recordkeeping. The records of the Advisory Council and any subcommittees thereof will be handled in accordance with General Records Schedule 6.2 and applicable agency records schedules. The records will be available for public inspection and copying, subject to the Freedom of Information Act, 5 U.S.C. 552. is. Filing Date. This Council is authorized to meet and take action as of the date of the filing of this charter on 47Gitit G4 27 2017. This charter has been filed with the Director of the CRIB, the U.S. Senate Committee on Banking, Housing, and Urban Affairs, the U.S. House of Representatives Committee on Financial Services, and the Committee Management Secretariat of the General Services Administration, and furnished to the Libraty of Congress. Signed: X,:z4 (loZ;61( Date Richard Cordray Director Consumer Financial Protection Bureau 3 CHARTER OF THE COMMUNITY BANK ADVISORY COUNCIOL 52 /1;?7(// 7 March 29, 2017 The Honorable Jeb Hensarling Chairman Committee on Financial Services United States House of Representatives 2129 Rayburn House Office Building Washington, DC 20515 Dear Chairman Hensarling: Enclosed please find the Consumer Financial Protection Bureau's Notification and Federal Employee Antidiscrimination and Retaliation Act (No FEAR Act) Annual Report, as required under Section 203 of the No FEAR Act. Should you have any questions concerning the report, please feel free to contact me at (202) 4359711. Sincerely, 72/ it Catherine Galicia Assistant Director for Legislative Affairs March 2017 No FEAR Act Annual Report for fiscal year 2016 Pursuant to Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002 Consumer Financial Protection Bureau Message from Richard Cordray Director of the CFPB On behalf of the Consumer Financial Protection Bureau (CFPB or Bureau), Jam pleased to present our Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002 (No FEAR Act) Annual Report for FY 2016. This report summarizes accomplishments in the Bureau's Equal Employment Opportunity (EEO) program. The report also underscores our commitment to abide by all civil rights laws and merit systems principles, and to promote accountability for compliance with both the letter and the spirit of these obligations. In September 2016, the Bureau issued the annual EEO and Anti-Harassment Policy Statement, along with the annual No FEAR Act and Whistleblower Protection Notice. (You can find these documents at Appendix B at the end of this Report.) At that time, I asked every Bureau employee to read these statements with care, as they contain important information about our EEO and anti-harassment policies and practices and related procedures. As I explained, each one of us must continuously reaffirm our personal commitment to do our part to uphold EEO principles and comply with the law.! conveyed my expectation that all Bureau employees would: Stand up to and stop acts of discrimination, harassment, and retaliation by contacting the Bureau's Office of Civil Rights (OCR) (our EEO office) or the Office of Human Capital (0 H C), consistent with the Bureau's Procedures Related to Harassment and Inappropriate Conductand our EEO and NonDlscrimination Policy • Cooperate promptly and fully in all anti-harassment and EEO investigations, because responding swiftly to requests for information from OCR or OHC is an important part of everyone's job here, regardless of where in the Bureau we may work. 2 CONSUMER FINANCIAL PROTECTION BUREAU • Prioritize diversity and inclusion and EEO training, including the annual mandatory No FEAR Act and anti-harassment trainings, as every Bureau employee is responsible for learning about these issues and putting what you learn into practice every day. As independent auditors have indicated, the policies and processes we have implemented to ensure compliance with EEO laws here at the Bureau are robust and working. The data in this annual No FEAR Act report shows that the numbers of informal and formal EEO complaints filed with OCR continue their two-year downward trajectory. Meanwhile, we will remain vigilant against any form of discrimination, harassment, or retaliation at the Bureau. And we will continue our many and varied efforts to foster the inclusive, discrimination-free culture the law demands and our employees deserve. Sincerely, Richard Cordray 3 CONSUMER FINANCIAL PROTECTION BUREAU Table of contents Message from Richard Cordray 2 Table of contents 4 1. Purpose of report 6 2. Background 8 3. Data and Analysis 12 3.1 EEO complaint activity in federal court and status/disposition 12 3.2 Judgment fund reimbursements and budget adjustments 13 3.3 Number of employees disciplined and discipline policy 14 3.4 Summary data 18 3.5 Analysis of complaints 18 3.6 No FEAR Act training 39 Appendix A. 44 Legislative and regulatory requirements 44 Appendix B. The Director's annual EEO and anti-harassment policy statement 49 49 The Director's FY 2016 annual notice on the No FEAR Act and whistleblower protection laws/prohibited personnel practices 57 4 CONSUMER FINANCIAL PROTECTION BUREAU 64 Appendix C• Summary of complaint data 64 1. Complaint activity 65 1.1 Complaints by basis 66 1.2 Complaints by issue 67 2. Complaint processing times 69 3. Complaint dismissals and withdrawals 70 4. Findings of discrimination 71 4.1 Findings by basis 71 4.2 Findings by issue 73 5. Pending complaints 80 6. Investigation timeframes 81 5 CONSUMER FINANCIAL PROTECTION BUREAU 1. Purpose of report Congress passed the Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002— the "No FEAR Act" — to hold federal agencies more accountable for violations of antidiscrimination and whistleblower protection laws.' Congress found that "requiring annual reports to Congress on the number and severity of discrimination and whistleblower cases brought against each Federal agency should enable Congress to improve its oversight over compliance by agencies with the law.", Therefore, the No FEAR Act requires each agency, no later than 180 days after the end of each fiscal year, to submit a report to the Speaker of the House of Representatives, the President pro tempore of the Senate, the Committee on Governmental Affairs of the Senate, the Committee on Government Reform of the House of Representatives, each committee of Congress with jurisdiction relating to the agency, the Equal Employment Opportunity Commission (EEOC), and the Attorney General of the United States., Regulations from the Office of Personnel Management (OPM) implementing the No FEAR Act, 5 Code of Federal Regulations (C.F.R.) Part 724, Subpart C, also require the submission of this annual report to the Director of OPM/, The annual report must provide the following information: 1 See Pub, L. No, 107-174, 116 Stat. 566 (2002). 2 Pub, L. No, 107-174, Section 101(7), 3 Pub, L. No, 107-174, Section 203(a), 45 C.F.R. § 724.302(c)(8). 6 CONSUMER FINANCIAL PROTECTION BUREAU • The number of federal court cases, pending or resolved, arising under the No FEAR Act laws and the status and disposition of the cases; Judgment Fund reimbursements and adjustments to agency budgets to meet reimbursement requirements; The number and type of disciplinary actions related to discrimination, retaliation, or harassment and the Bureau's policy relating to appropriate disciplinary action; Year-end summary data related to federal sector EEO complaint activity; An analysis of trends, causation, and practical knowledge gained through experience, and actions planned or taken to improve complaint or civil rights programs; and The agency's plan for No FEAR Act-related training.5 The Bureau has prepared and submits this report to comply with these statutory and regulatory requirements. See Pub. L. No. 107-174, Section 203(a)(1); see also 5 C.F.R. 724302(a). Appendix A to this report sets forth these requirements in full. 5 CONSUMER FINANCIAL PROTECTION BUREAU 2. Background CFPB Mission CFPB is the nation's first federal agency focused solely on consumer financial protection. The Dodd-Frank Wall Street Reform and Consumer Protection Acto created CFPB to protect consumers and to encourage fair and competitive consumer financial markets. CFPB officially began operations on July 21, 2011. At the end of FY 2016, the Bureau consisted of 1,645 employees (permanent and temporary). CFPB's mission is to make markets for consumer financial products and services work for people in America — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products. CFPB helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their lives. When CFPB achieves its mission, it will have facilitated the development of a consumer finance marketplace where consumers can see prices and risks and can easily make product comparisons. The envisioned consumer finance marketplace will work for consumers in America, responsible providers, and the economy. CFPB is achieving its mission and vision through data-driven analysis, innovative use of technology, and valuing great teamwork and top talent. CFPB is using data purposefully to support informed decision-making in all internal and external functions. CFPB strives to be an innovative, 21st century agency in its approach to technology. Finally, CFPB invests in world- 6 a See Pub, L. No.111-203, 124 Stat. 1376 (July 21, 2010). CONSUMER FINANCIAL PROTECTION BUREAU class training, development, and support to create an environment that encourages employees at all levels to tackle complex challenges. To accomplish these goals, CFPB is divided into six Divisions: Consumer Education & Engagement (CEE) Supervision, Enforcement, & Fair Lending (SEFL) Research, Markets, & Regulations (RMR) External Affairs (EA) Legal (LD) Operations (OPS) These Divisions work together to: Write rules, supervise regulated entities, and enforce federal consumer financial protection laws; Restrict unfair, deceptive, or abusive acts or practices; Take consumer complaints; Promote financial education; • Research consumer behavior; • Monitor financial markets for new risks to consumers; and Enforce laws that prohibit discrimination and other unfair treatment in consumer finance. CFPB EEO Structure The Bureau has an Office of Equal Opportunity & Fairness (0E0E), which is housed directly in the Office of the Director of CFPB. OEOF is comprised of the Office of Civil Rights (OCR) and 9 CONSUMER FINANCIAL PROTECTION BUREAU the Office of Minority and Women Inclusion (OMWI). The Director of OEOF reports directly to the Director of CFPB. OCR, the Bureau's Equal Employment Opportunity (EEO) office, has operated since February 2013. It works to ensure that CFPB complies with all federal EEO laws and related civil rights protections. OCR provides a neutral forum for the discussion, investigation, and resolution of certain EEO matters and manages the Bureau's EEO complaint process pursuant to 29 C.F.R. Part 1614. OCR also strives to integrate EEO into CFPB's everyday work. Through its daily activities, OCR preserves and enhances the six elements identified by the Equal Employment Opportunity Commission as essential for a Model EEO Program — demonstrated commitment from Agency leadership; integration of EEO into the Agency's strategic mission; management and program accountability; proactive prevention of unlawful discrimination; efficiency; and responsiveness and legal compliance., OCR works to empower individuals to participate constructively to their fullest potential in support of CFPB's mission. OCR endeavors to ensure that CFPB reflects the rich diversity of the nation and provides a full and fair opportunity for all employees and applicants, and that CFPB employees have the working environment that will support them in their efforts to protect consumers. To facilitate these objectives, OCR provides policy and technical advice on EEO and civil rights to the CFPB Director and senior leadership. The Director of OCR (like the Director of 0E0F) reports directly to the Director of CFPB. OCR emphasizes and maintains its neutrality and impartiality, which is critical to having an efficient and fair EEO complaint resolution process. This ensures that employees and managers know that the pre-complaint and investigation stages of the Part 1614 process are not adversarial, that OCR will provide a neutral and impartial factual record, and that, when requested, OCR will issue a final decision assessing the facts and law to determine whether or not one or more of the applicable employment discrimination laws have been violated. 7 See EEOC Management Directive 715 (Oct. 2303) (MD-715), Model Agency Title VII and Rehabilitation Act Programs, at Section II, available at https://v3tcy.seoc.gov/1eder al/directives/Indr 5.cfm. 10 CONSUMER FINANCIAL PROTECTION BUREAU The OCR Director exercises full authority to carry out the Part 1614 functions of OCR without Legal Division (i.e., General Counsel) involvement, thus ensuring impartiality and removing any possible conflict of interest. Legal resources within OCR make this possible. OCR staff, sometimes with the assistance of contractors, conducts legal sufficiency reviews of EEO matters, which includes issuing accept/dismiss decisions addressing jurisdiction over, and scope of, claims set forth in formal complaints, Reports of Investigations (ROIs), and Final Agency Decisions (FADs). The Legal Division, which defends the Bureau in these matters, is firewalled from all activities within OCR and only participates during adversarial portions of the EEO process (hearings and appeals), and during settlement negotiations, or to provide appropriate legal advice or assistance when a manager or supervisor requests it during the course of an EEO investigation. All other Bureau offices are similarly firewalled and kept separate as necessary and appropriate to avoid conflicting or competing interests. At the same time, while OCR maintains primary responsibility for the Agency's overall EEO program, it collaborates extensively with both OMWI and the Bureau's Office of Human Capital (OHC) to ensure fairness and equality under the law for all employees and applicants for employment. Pursuant to Section 342 of the Dodd-Frank Act, OMWI develops standards for equal employment opportunity and diversity, which OHC incorporates into CFPB Human Capital Management. OCR, OMWI, and OHC monitor the impacts and results of these standards, cultivate successful policies and practices to reinforce them, and develop enhancement strategies to strengthen all EEO and diversity and inclusion programs Bureauwide. OCR cooperates with OHC, in particular, related to the disability reasonable accommodation and harassment prevention programs OHC administers. OCR maximizes appropriate partnerships with Bureau leadership, management, diversity committees (such as the Agency's Executive Advisory Council (EAC) and Diversity and Inclusion Council of Employees (DICE)), Employee Resource Groups, other employees, and with the National Treasury Employees Union (NTEU) to achieve OCR's and the Bureau's mission and vision. 11 CONSUMER FINANCIAL PROTECTION BUREAU 3. Data and Analysis The information in this section meets the reporting requirements of the No FEAR Act and its implementing regulations. The information presented includes: Subsection 3.1- EEO Complaint Activity in Federal Court and Status/Disposition Subsection 3.2 -Judgment Fund Reimbursements and Budget Adjustments • Subsection 3.3- Number of Employees Disciplined and Applicable Discipline Policy • Subsection 3.4- Summary of Complaint Data Subsection 3.5 - Analysis of Data Provided 3.1 EEO complaint activity in federal court and status/disposition The laws covered by the No FEAR Act include: Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e-16 (race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, and reprisal); The Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §§ 631, 633a (age (40 and over) and reprisal); The Equal Pay Act of 1963, as amended, 29 U.S.C. § 206(d) (sex-based wage differentials and reprisal); 12 CONSUMER FINANCIAL PROTECTION BUREAU • Section 501 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 791 (physical and mental disabilities and reprisal); The Genetic Information Nondiscrimination Act of 2008,42 U.S.C. § 2000ff et seq. (genetic information about an individual or individual's family members and reprisal);8 and • The Civil Service Reform Act of 1978,5 U.S.C. §§2302(b)(1), (b)(8), (b)(9) (race, color, religion, sex, national origin, age, disability, marital status, political affiliation, and whistleblowing and related reprisal). In FY 2016, the Bureau had two civil actions pending or resolved in United State district court related to one or more of these No FEAR Act laws. One case, involving allegations under the Equal Pay Act Of 1963, remained pending as of the end of FY 2016. The other case, which involved allegations under Title VII of the Civil Rights Act of 1964, was dismissed by the district court at the end of FY 2016 and is no longer pending. 3.2 Judgment fund reimbursements and budget adjustments The Judgment Fund is a permanent, indefinite appropriation available to pay final money judgments and awards against the United States. The Judgment Fund Branch in the Bureau of the Fiscal Service of the U.S. Department of the Treasury administers the Judgment Fund.9 a Neither the No FEAR Act (enacted in 2002) nor implementing regulations (finalized and published in the Federal Register in 2006) have been amended to include reference to the Genetic Information Nondiscrimination Act of 2008 (GINA). Nonetheless, in the interests of completeness, CFPB will include relevant data here on any federal court cases or EEO complaints alleging violations of GINA. No such cases or complaints have been filed to date. 9 See 13 https /t.A.ew fiscal Lr,asui y govfisservices/gov/pnillidgrund/quesuons CONSUMER FINANCIAL PROTECTION BUREAU The No FEAR Act requires federal agencies to reimburse the Judgment Fund for payments to an employee, former employee, or applicant for Federal employment, in accordance with 28 U.S.C. §§ 2414, 2517, 2672, 2677, or with 31 U.S.C. § 1304, that involves alleged discriminatory or retaliatory conduct described in 5 U.S.C. §§ 2302(b)(1) and (b)(8) or (b)(9) as applied to conduct described in 5 U.S.C. §§2302(b)(1) and/or (b)(8), or conduct described in 29 U.S.C. § 206(d), 29 U.S.C. §§ 631 and 633a, 29 U.S.C. § 791, and 42 U.S.C. § 2000e-16.10 In FY 2016, the Bureau neither made reimbursements to the Judgment Fund nor needed to adjust its budget to comply with No FEAR Act reimbursement requirements. CFPB will not be accessing the Judgment Fund; other sources of funds are available for these purposes), 3.3 Number of employees disciplined and discipline policy CFPB has put in place various personnel-related policies and procedures that aid in the proactive prevention of discrimination and increase management and program accountability. Having clear and concise policies and procedures minimizes subjectivity, prevents misunderstandings about what CFPB expects from its employees and management officials, clarifies the roles and responsibilities of the various offices within the Bureau, and creates an environment and expectation of consistency in personnel decision-making Bureau-wide. Management officials follow the policies and procedures listed in Table 1 below. 15 See Pub, L. No. 107-174, Section 201(b); see also5 C.F.R. §§ 724.102, 103. 11 See Pub, L. No.114203, Section 1017. 14 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 1 - BUREAU POLICIES GOVERNING MAJOR PERSONNEL ISSUES AND PROGRAMS Bureau Policies Governing Major Personnel Issues and Programs Disciplinary and Adverse Action Policy Procedures Related to Harassment and Inappropriate Conduct Hiring, Promotion, and Internal Personnel Movements Policy Attorney Hiring and Promotion Policy Performance Management Program Policy Alternative Dispute Resolution Policy Administrative Grievance Policy CFPB has a detailed policy for taking disciplinary action against Federal employees for conduct that is inconsistent with Federal antidiscrimination laws and whistleblower protection laws or for conduct that constitutes another prohibited personnel practice revealed in connection with agency investigations of alleged violations of laws. The Bureau's Disciplinary and Adverse Action Milicyoutlines CFPB's commitment to: Foster positive and effective supervisor-employee relations through frequent, constructive communication, including a clear statement of organizational and office work rules and expectations; Equitably employ discipline, and, whenever appropriate, utilize progressive discipline to discourage employee misconduct; Identify problems early and constructively counsel employees to effect a positive change in behavior; Ensure that the corrective action is commensurate with the seriousness of the misconduct and that similar offenses under like circumstances are treated uniformly; and 15 CONSUMER FINANCIAL PROTECTION BUREAU Take or not take actions without regard to race, color, religion, national origin, disability, protected genetic information, marital status, age, sex (including pregnancy, gender identity, and gender nonconformity), sexual orientation, reprisal, parental status, political affiliation, or any other non-merit factor prohibited by 5 U.S.C. § 2302, except as required by law. This policy also explains that: To ensure that all employees are working in a safe and productive environment and that the CFPB iS able to operate at optimum efficiency CFPB has established certain expectations for the personal conduct of its employees. These expectations are uniform throughout the CFPB. Employees are expected to be professional courteous and respectful at all times while on duly CFPB also may consider an employee's off-duty conduct to constitute misconduct if there is a nexus between the off-duty conduct and the efficiency of the service. While it is anticipated that most problems will be resolved informally through the cooperation of employees with their supervisors, misconduct may result in disciplinary or adverse action. Appropriate action may include a reprimand, suspension, demotion, orotheractions, up to and including removal from CFPB, depending on the offense and circumstances. CFPB k committed to complying with all federal laws governing the discipline of its employees, including applicable due process and appeal rights. The Bureau's policy provides a list of actions deemed unacceptable, which may result in disciplinary or adverse action, up to and including removal from CFPB. The list includes "Engaging in discrimination, harassment, or other inappropriate conduct" The Bureau's Procedures Related to Harassment and Inappropriate Conductsimilarly prohibit discriminatory harassment. According to these procedures: I:5 CFPB's policy to ensure that every employee enjoys a work environment free from discriminatory harassment. Discriminatory harassment is a violation of the Federal civil rights laws and will not be tolerated at CFPB. Even inappropriate conduct that is not of sufficient severky to constitute harassment as a matter of law Considered misconduct. CFPB will address complaints about such inappropriate conduct when first reported and will discipline employees where necessary for the protection and 16 CONSUMER FINANCIAL PROTECTION BUREAU benefit of all employees. The procedures also 'forbid[] retaliation against any employee who reports harassment or who cooperates with an investigation of a harassment complaint" Under these anti-harassment procedures, any such retaliation "will result in appropriate disciplinary action ....'The Bureau trains all CFPB managers and supervisors on these policies. The Bureau also trains all employees on EEO laws, the Part 1614 complaint process, and related avenues for seeking redress for policy and statutory violations (including Alternative Dispute Resolution). Bureau policy also requires all employees to follow CFPB Ethics Regulations. Those ethics regulations in turn require all Bureau employees to abide by the Standards of Ethical Conduct for Employees of the Executive Bronchi, The General Principles of Ethical Conduct require that employees adhere to all laws and regulations that provide equal opportunity for all regardless of race, color, religion, sex, national origin, age, or disability.13 Employees are notified of this ethical requirement in mandatory ethics training, posters, and through the Bureau's intranet. During FY 2016 two employees were disciplined (as defined in 5 C.F.R. § 724.102) for violating Bureau policies related to conduct that is inconsistent with Federal antidiscrimination and whistleblower protection lawsi° (These matters involved violations of Bureau policy, but not findings that antidiscrimination statutes had been violated.) In one case, CFPB ordered a threeday suspension for Conduct Unbecoming of a Federal Supervisor. In another case, the Bureau issued a Letter of Reprimand for Inappropriate Conduct. CFPB's response in these matters demonstrates its ongoing commitment to comply with the letter and spirit of civil rights laws and Bureau policies, and to providing equal employment opportunity and a professional, inclusive work environment. 12 See5 C.F.R. 5 9401.101(6). 13 See5 C.F.R. 5 2635.101(6)(13). 14 See 5. C.F.R. 55 724.302(a)(5), (a)(6). 17 CONSUMER FINANCIAL PROTECTION BUREAU 3.4 Summary data Appendix C contains a summary of the Bureau's Part 1614 EEO complaint activity for FY 2016 and prior fiscal years. 3.5 Analysis of complaints Under the No FEAR Act, agencies in their annual reports must analyze certain complaintrelated data, including (1) an examination of trends; (2) causal analysis; (3) practical knowledge gained through experience; and (4) any actions planned or taken to improve complaint or civil rights programs of the agency.I 5 This analysis, along with an overview of CFPB's workforce data (for context), is provided below. Workforce Demographics As of the end of FY 2016, the total CFPB workforce was 1,645 employees, including 1,494 permanent employees and 151 temporary employees (including staff on temporary appointments and interns). The total workforce grew by 112 employees during FY 2016, representing a rate of change of 7.31 percent. During FY 2016, all EEO group populationsI6 experienced net growth with the exception of males and females of two or more races and American Indian/Alaska Native males and females. 15 See Pub. L. No. 107-174, Section 203(a)(7); see also 5 C.F.R. 5 724.302(a)(7), Federal agencies generally must report statistical information on the racial and ethnic categories of employees and applicants as prescribed by the Office of Management and Budget (OMB) in Statistical Policy Directive No, 15, Race and Ethnic Standards for Federal Statistics and Administrative Reporting (OMB Directive 15). See haps/ lobaniawhoehousearchives.gov / onibfiedreg_r ace-ahnicoa. Under these standards, employees self-identify as belonging to one or more of the following racial groups: American Indian or Alaska Native, Asian, Black or African American, Native Hawaiian and Other Pacific Islander, and/or White. Regardless of race(s) selected, employees may identify as Hispanic or Latino as well. 16 18 CONSUMER FINANCIAL PROTECTION BUREAU Compared to the U.S. Census Civilian National Labor Force (CLF) 17 overall CFPB demographics have not changed significantly since FY 2015. White men, followed by White women, comprise the largest racial groups in CFPB, followed by Black women and Black men, respectively. Males totaled 767 or 51.34% of the permanent workforce — a decrease from 52.56% in FY 2015 and slightly lower when compared to the CLF availability of 51.86%. Females totaled 727 or 48.66% of the permanent workforce, an increase from 47.44% in FY 2015, and slightly higher as compared to the CLF availability of 48.14%. There was a growth of 11 new employees with reportable disabilities from the beginning to the close of FY 2016, representing a net change of 8.27 percent, which exceeds the rate of change for the total workforce. TABLE 2. TOTAL WORKFORCE - FY 2015 Workforce Type ALL18 Hispanic White Black Asian NH/OPI Al/ AN Two or More ALL 1,533 95 983 289 141 2 12 11 % 6.20% 64.12% 18.85% 9.20% 0.13% 0.78% 0.72% CLF 9.96% 72.36% 12.02% 3.90% 0.14% 1.08% 0.54% Male 805 50 560 110 72 0 8 5 Female 728 45 423 179 69 2 4 6 17 The CLF is derived from the 2006-2010 American Community Survey (ACS) Equal Employment Opportunity Tabulation (EEO Tabulation). The EEO Tabulation was originally released by the U.S. Census Bureau on November 29, 2012. It provides external benchmarks to assist federal agencies in monitoring employment practices and enforcing workforce civil rights laws. See https://irrigol.geoc.gov//federal /dir ecLives/ ter h ss is La n ce_0610 EE 0_ta hu I a tic II.Cfm. 18 19 This includes permanent and temporary employees (including staff on temporary appointments and interns), CONSUMER FINANCIAL PROTECTION BUREAU TABLE 3: TOTAL WORKFORCE - FY 2016 Workforce Type ALL Hispanic White Black Asian NH/OPI Al/AN Two or More ALL 1,645 11 99 1,038 328 156 3 10 % 6.02% 63.10% 19.94% 948% 0.18% 0.61% 0.67% CLF 9.96% 72.36% 12.02% 3.90% 0.14% 1.08% 0.54% Male 844 54 577 121 80 1 7 4 Female 801 45 461 207 76 2 3 7 TABLE 4. TOTAL WORKFORCE - FY 2015 COMPARED TO FY 2016 ALL Hispanic White Black Asian NH/OPI Al/AN Two or More Difference +112 +4 +55 +39 +15 +1 -2 0 Male +39 +4 +17 +11 +8 +1 -1 -1 Female +73 0 +38 +28 +7 +0 -1 +1 Male -1.20% 0.02% -1.45% 0.180/o 0.17% 0.06% -0.10% -0.08% Female 1.20% -0.20% 043% 0.91% 0.12% -0.01% -0.08% 0.03% Net Change 7.31% Male 4.84% 8.00% 3.04% 10.00% 11.11% 100.00% -12.50% -20.00% Female 10.03% 0.00% 8.98% 15.64% 10.14% 0.00% -25.00% 16.67% Ratio Change Trends and causal analysis Because the CFPB officially opened on July 21, 2011, and began reporting information related to FY 2012, FY 2016 is the first year in which CFPB can provide a complete five-year perspective of EEO data on complaint-filing trends. 20 CONSUMER FINANCIAL PROTECTION BUREAU Pending Complaints In FY 2016, the Bureau saw a decrease in the number of formal complaints pending at the end of the fiscal year compared with previous fiscal years (21 pending at the end of FY 2016 compared to 32 at the end of FY 2015), and in the corresponding number of complainants (17, compared to 25 in FY 2015). As of the end of FY 2016, there were zero formal complaints filed in previous fiscal years remaining in the investigation or ROT-issued/election phases. By contrast, at the end of FY 2015, eight formal complaints filed in previous years remained pending in the investigation phase, and two filed in previous years remained pending in the ROT-issued/election phase. As of the end of FY 2016, only two formal complaints remained pending in the Final Agency Action phase, down from six in FY 2015. Complaints pending at the hearing phase (18, compared to 12 in FY 2015) and appeal phase (six, compared to four in FY 2015) increased from FY 2015.19 Figure 1 and Figure 2 present this data and related data for other previous fiscal years. Hearings and appeal stages of the Part 1614 EEO corn plaint process are managed by the EEOC. If a complainant requests an EEOC hearing the matter becomes adversarial and the Bureau's Legal Division (not OCR) represents CFPB as a party in the proceeding, including on any administrative appeal filed with EEOC's Office of Federal Operations. 19 21 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 1: PENDING COMPLAINTS AND COMPLAINANTS FY 2012— FY 2016 35 30 25 20 15 10 5 0 2012 2013 2014 Total complaints 2015 2016 Total complainants FIGURE 2: PENDING COMPLAINT STATUSES FY 2012— FY 2016 20 18 16 14 12 10 6 4 2 2012 2013 2015 2016 Investigation ROI issued, pending Complainant's action Hearing Final Agency Action Appeal w/ EEOC Office of Fed. Ops, 22 2014 CONSUMER FINANCIAL PROTECTION BUREAU Total New Complaint Filings and Number of Complainants During FY 2016, the Bureau experienced a decrease in the number of formal complaints filed compared with FY 2015 (from 22 to 19).2° This follows a similar decrease in formal complaints filed in FY 2015 compared with FY 2014 (from 25 to 22). The 18 complainants2 I who filed formal complaints in FY 2016 represent 1.09 percent of CFPB's total workforce of 1645 individuals.22 This represents a decrease of 0.15 percent compared to FY 2015, when the ratio (of 19 complainants as a percentage of the total workforce of 1533 individuals) was 1.24 percent. 20 Three of the 19 formal complaints listed as having been filed in FY 2016 began as putative class complaints filed in a previous fiscal year. In FY 2016, an EEOC Administrative Judge (AJ) denied class certification in all three matters, requiring the matters to then be processed as individual complaints. See 29 C.F.R. 5 1614.204(d)(7). Total new formal complaints filed in FY 2016 thus equal 16. 21 One employee filed more than one formal corn plaint in FY 2016. 22 This ratio drops to 0.91 percent if complainants who filed class corn pla ints in previous fiscal years are excluded in calculating the FY 2016 ratio. (15 complainants/1645 total employees = 0.91 percent.) 23 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 5: COMPLAINANTS. COMPLAINTS, AND TOTAL WORKFORCE FIGURES AND RATIOS FOR CFPB FOR THE PAST FIVE FISCAL YEARS FY 2012 FY 2013 FY 2014 CFPB Formal Complaints 11 9 25 22 23 19 CFPB Complainants 11 9 24 19 18 970 1343 1419 1533 1645 1.13 0.67 1.75 144 1.16 1.13 0.67 1.68 1.24 1.09 0.56 0.50 0.51 NOT YET NOT YET REPORTED REPORTED 0.51 0.50 0.49 CFPB Total Workforce 24 CFPB Formal Complaints as Percentage of Total Workforce CFPB Complainants as Percentage of Total Workforce All Similarly Sized (Mid-Size) 25 Agencies (Complainants as Percentage of Total Workforce) Government-wide (Complainants as Percentage of Total Workforce) 26 FY 2015 FY 2016 NOT YET NOT YET REPORTED REPORTED 23 In FY 2015, an individual also filed two notices with the EEOC signaling the individual's intention to file a civil suit against the Bureau under the Age Discrimination in Employment Act of 1967 (ADEA). Such notices of intent to file a civil action under the ADEA are not considered official EEO complaints under 29 C.F.R. Part 1614 and thus are not included in the total of formal EEO complaints filed in FY 2015, 5ee29 C.F.R. § 1614.201(a) (As an alternative to filing a complaint under this part, an aggrieved individual may file a civil action in a United States district court under the ADEA against the head of an alleged discriminating agency after giving the fEEOCI not less than 30 days' notice of the intent to file such an action."). Workforce numbers for previous fiscal year No FEAR Act report may differ slightly from corresponding data reported in this FY 2016 Report. This is due to retroactive processing of personnel actions, late processing of personnel actions, or other changes made in applicable data systems since those reports were published. 24 Midsize or medium agencies are those with 1000 to 14,999 employees. See EEOC's FY 2014 Annual Report on the Federal Workforce (August 2014), available at hbp://biebbeeocgovfieder al/repor tsfisp2014/ilidex.cfm. 25 The most recent available government-wide statistics are contained in the EEOC's FY 2014 Annual Report on the Federal Work Force. See hbp://vviviibeoc.govIled era eports/bp2014/upload/Fina I-FY-2014-Annua I-Repor bI.pd 1; see also H ttp://bevebbeocgov/f oder al/repor Ls/fsp2014/table b_l birth 26 24 CONSUMER FINANCIAL PROTECTION BUREAU Figure 3 presents two graphs showing trends in informal and formal complaint activity from FY 2012 through FY 2016, along with corresponding figures for the total workforce at the end of each fiscal year (FYE). These graphs allow a visual comparison of complaint volume for the past five fiscal years and data on the growth of the Bureau's workforce over the same period. FIGURE): CFPB INFORMAL AND FORMAL COMPLAINT ACTIVITY AND TOTAL WORKFORCE FY 2012 - FY 2016 60 52 50 40 —Formal Complaints 30 25 23 20 29 23 18 22 PreComplaint/ Informal 19 11 10 FY12 FY13 FY14 FY15 1,800 1,533 1,600 1,343 1,400 FY16 1,645 1,419 1,200 1,000 970 Total Workforce EYE 800 600 400 200 0 FY12 FY13 FY14 FY15 FY16 25 CONSUMER FINANCIAL PROTECTION BUREAU Figure 4 provides a graphical representation of formal complaint activity and complainant figures since FY 2012. FIGURE 4: CFPB COMPLAINT ACTIVITY FY 2012 — FY 2016 30 25 20 15 10 5 0 2012 2013 2014 Number of Complaints Filed 2015 2016 Number of Complainants Bases and Issues In FY 2016, the most frequently cited bases of discrimination in formal complaints filed were Reprisal (13), Sex (10), Race (8), Color (6), and Equal Pay Act (5).27 These most frequently cited bases changed from FY 2015, when they were Reprisal (16), Race (14), Sex (13), Color (10), and Disability (10). Figure 5 presents formal complaints by basis for FY 2016. 27 Although there were 19 formal complaints filed in FY 2016, there are more than 19 total bases of discrimination alleged because a complainant may (and often does) assert more than one basis per complaint. 26 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 5: COMPLAINT ACTIVITY BY BASIS FY 2016 Age 4 Disability 4 Race 8 Pregnancy 2 A Equal Pay Act 5 Sex 10 Color 6 Reprisal 13 Figure 6 presents frequencies of bases appearing in the top three for any year from FY 2012- FY 2016. 27 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 6: COMPLAINT ACTIVITY BY BASIS FY 2012— FY 2016 18 16 14 12 10 8 6 4 .......... .... . 2 • 2012 2013 — Race — — Reprisal 2014 2015 Sex — National Origin 2016 Age The most frequently raised issues in formal complaints in FY 2016 were Promotion/NonSelection (11), Terms/Conditions of Employment (8), Pay (Including Overtime) (7), Performance Evaluation/Appraisal (7), and Assignment of Duties (6). In comparison, FY 2015's most frequently alleged issue was Terms/Conditions of Employment (13), followed by Harassment (10; Non-Sexual (9) and Sexual (1)), Training (8), and Performance Evaluation/Appraisal (7). Figure 7 presents formal complaints by issue for FY 2016. 28 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 7: COMPLAINT ACTIVITY BY ISSUE FY 2016 FY 2016: COMPLAINTS BY ISSUE Reasonable Accom 3 Appt/Hire 1 Pay 7 Harassment 4 Evaluation 7 Terms/Conditions Assignment of Duties 6 8 T&A Promotion/Non- 3 Selection 11 Figure 8 presents frequencies of issues appearing in the top three for any year from FY 2012 — FY 2016. 29 CONSUMER FINANCIAL PROTECTION BUREAU FIGURES: COMPLAINT ACTIVITY BY ISSUE FY 2012— FY 2016 16 14 12 10 8 6 4 2 0 2012 2013 — Disciplinary Action Harassment Promotion/Non-Selection 2014 2015 2016 — Penf Eval / Appraisal — Pay including overtime Terms/Conditions of Employment Bases and issues in CFPB formal complaint filings in FY 2016 were somewhat consistent with government-wide and comparable agency statistics. According to the EEOC, across the Federal government in FY 2014, reprisal was the most frequently cited basis, followed by age, race (Black/African American), and Disability (physical).28 Additionally, in FY 2016, reprisal, sex, and age were among the most common complaint bases among other medium-sized financial regulatory agencies with at least 10 complaints (e.g., Federal Deposit Insurance Corporation 28 See EEOC FY 2014 Annual Report on the Federal Workforce, Executive Summary, at Section 13 Table 7, p.1-11, available at http://v,ev.m.ecoc.gov/federal/reports/fsp20 "4/upload/rmal FY 20'4 Aririu,i1 Report Part-l.pdf. 30 CONSUMER FINANCIAL PROTECTION BUREAU (FDIC), Office of the Comptroller of the Currency (OCC), and the Securities and Exchange Commission (SEC)).29 The EEOC also reported that in FY 2014, the most frequently alleged issue in formal complaints was Non-Sexual Harassment, followed by Terms/Conditions of Employment and then Promotion/Non-Selection.30 In FY 2016, non-sexual harassment, performance evaluation/appraisal, and appointment/hire were all among the most common issues for certain medium-sized financial regulatory agencies (i.e., FDIC, OCC, and SEC). Processing Times OCR works to ensure that its counselings and investigations are done within the regulatory timeframes, and that all EEO counselor reports and ROIs are created with a high standard of quality and with fairness to both parties. In FY 2016, OCR completed all counselings and related mediations within the prescribed regulatory timeframes. During FY 2016, investigations of formal complaints were completed within an average of 267 days. In FY 2016, the average number of days in investigation for complaints: pending for any length of time during the fiscal year (for which investigations were completed during the fiscal year) was 270.05, an increase from an average of 247 days in FY 2015; pending for any length of time during FY 2016 where a hearing was requested was 242.83, an increase from an average of 183 days in FY 2015; and pending for any length of time during FY 2016 where a hearing was not requested was 316.71, an increase from an average of 293 days in FY 2015. FDIC data is located at lc ttus://vnyvI 188 gov/about/diversiw/nolealinfreport lc trill. OCC data is located at liaus://vIvny ireasury gov/No-rear-Aa/Docsiments/OCCRXOFT 620208TR 20204 2020NaDdi pd. SEC data is located at hitpsi/vnyvI sec govienoinfo/nof ea r d La limb 29 30 SOP EEOC FY 2 014 Annual Report on the Federal Workforce, Executive Summary, at Section B Table 8, p.1 2, available athttpi Avvpivieoc.govfiedc‘r al Ir oar isfisp20' 4/upload F irkil-FY -20' 4-Amilual-Repor t-Par t-I. 31 CONSUMER FINANCIAL PROTECTION BUREAU These average processing times for investigations of formal complaints are attributable to a variety of factors: (1) The need to procure outside contractors to conduct EEO investigations; (2) an increased emphasis on enhancing the quality of EEO investigations, which requires review of contractor work and thus lengthier investigations; (3) the volume of complaints and open cases from prior fiscal years; (4) the filing of amendments in a significant portion of all formal complaints; and (5) allocation of existing staff resources to other needs, including external audits and change-management initiatives related to complaint tracking (discussed below). Almost all investigations of formal complaints completed in FY 2016 were completed within regulatory timeframes (including timeframes extended due to amendments or permissible extensions). In FY 2016, OCR processed 89.5 percent of its formal complaints within regulatory timeframes.31 This compares favorably with the government-wide average of 73 percent for the most recent year for which data is available.32 As of the end of FY 2016, CFPB had zero pending complaints where investigations exceeded the required time frames. In FY 2016, Final Agency Decisions (FADs) were completed in an average of 60.83 days. The Agency issued six FADs in FY16. Two of these were complicated FADs that needed 31 CFPB closed investigations in 19 matters during FY 2016. Seven of those cases had amendments, two of which had multiple amendments, which elongated investigation times. Seven of the 19 cases had complainant-approved extensions ranging from 15-90 days, which elongated investigation times. Many of these cases involved complex and numerous claims, which contributed to longer investigation times (e.g., the number of claims in the 19 cases ranged from one to 16 claims per case). Further, two cases were held in abeyance for a portion of the investigation time. Two of the 19 investigations were considered untimely by EEOC regulations, and another 2 exceeded 360 days, which is permitted under guidance from the EEOC. See EEOC Management Directive 110 (Aug. 2015), at Chapter 5, Section EAT, available at https://vvv.m.ceoc.govfiederal/direcLiveskrid-"O_chapter 5.thrirt_Toc425745226 ("Regardless of amendment or consolidation of complaints, the investigation shall be complete in not more than 360 days, unless there is a written extension of not more than 90 days."). SeP EEOC FY 2014 Annual Report on the Federal Workforce, at Executive Summary, available at liaps://vvvolvieoc.pv/federaireportsfisp20'4/index.cfmrtexecutive ("Government-wide, a total of 11,281 investigations were completed in an average of 196 days in FY 2014. Seventy-three percent of the investigations were completed in a timely manner, up from 67.2 percent the previous year. Without the United States Postal Service's (US PS) investigations, the government-wide average was 64.7 percent, which is an increase from the 55.7 percent average in FY 2013."). 32 32 CONSUMER FINANCIAL PROTECTION BUREAU supplementary inquiries in order for a fact finder to make a determination on the merits, and one was ultimately a finding of discrimination. EEO Resources and Staffing OCR has taken important steps to reduce case-processing times, where feasible, while also increasing quality. During FY 2016, the Bureau allocated additional resources OCR requested to ensure that the EEO Program remains successful and operates in an effective manner. OCR hired an individual formerly from the EEOC's Office of Federal Operations (0F0) — with extensive experience as an Appellate Review Attorney and as an Administrative Judge — to serve as the Bureau's EEO Complaints Program Manager. This new program manager focuses on maintaining and enhancing the quality and timeliness of all aspects of the Part 1614 complaint process. OCR also now has a data analyst (sited within OHC and shared with OMWI) to perform trend and other data analyses, such as identifying triggers and barriers to EEO throughout the Bureau. In addition, OCR procured approval to hire a Conflict Prevention Program Manager to focus on enhancements to EEO and non-EEO alternative dispute resolution (ADR) options. This individual onboarded early in FY 2017, and has brought extensive expertise from prior positions with the EEOC, the Employment Litigation Section in the Civil Rights Division of the U.S. Department of Justice, and (most recently) the Office of Compliance in Congress, where he led the nationwide ADR program for Congress (30,000+ employees). In an attempt to leverage expertise from within the Bureau, OCR also has detailed a Senior Attorney and leader from another CFPB division for a four-month period to assist OCR in evaluating ADR efforts. These newer resources add to the existing permanent, full-time OCR staff, which includes the OCR Director, a Senior Counsel, a General Attorney, an Equal Employment Specialist, a Paralegal Specialist, and a Senior Administrative Officer. OCR also shares an Administrative Assistant with OMWI. Complaint and workforce tracking and monitoring systems During FY 2016, OCR staff also spent a significant amount of time and resources related to change management for implementing and using the Micropact iComplaints platform. This is a web-based EEO case management solution that provides a broad range of capabilities for reporting (including No FEAR Act and Form 462), processing, tracking, and managing the overall effectiveness of the CFPB's EEO Program. Throughout the first two quarters of FY 2016, OCR staff migrated case-related data (including legacy data from the Bureau and the U.S. 33 CONSUMER FINANCIAL PROTECTION BUREAU Department of Treasury) into the iComplaints system. OCR also provided all staff with training directly from Micropact (the software vendor), and created and disseminated detailed protocols and SOPs for using the new system to ensure consistency in system inputs and data integrity. In light of these extensive change-management initiatives, the software has proven immensely helpful in enhancing case-related processing efficiencies and easing the administrative burden associated with program reporting obligations. The software already has allowed OCR to more efficiently comply with EEOC regulations and reporting obligations, identify and monitor internal EEO trends, and redirect staff time away from manual tracking and reviewing complaints data and towards work on other mission-critical projects. During FY 2017, OCR intends to procure a related complaints "executive dashboard" solution that will enable OCR, along with its new data analyst, to conduct more granular and systematic analysis of case processing (e.g., basis, issue, timeframes, etc.) trends. Finding of Discrimination The Bureau's robust Part 1614 complaints process, administered by OCR, safeguards employee civil rights and provides appropriate relief for statutory violations. OCR issued a Final Agency Decision in FY 2016 finding violations of the Rehabilitation Act and Title VII of the Civil Rights Act with respect to one individual. This was the first finding of discrimination against the Bureau to date; no other findings have been issued against the Bureau (e.g., from the Bureau itself, the EEOC, the Merit Systems Protection Board, the Office of Special Counsel, labor arbitrators, the Federal Labor Relations Authority, the Department of Labor, or a federal court). In its Final Agency Decision, OCR ordered appropriate remedies, including consideration of appropriate disciplinary action, training, a posting notice, and make-whole relief for the individual victim. This finding and accompanying relief order underscore the Bureau's ability to ensure effective compliance with applicable EEO laws. Alternative Dispute Resolution CFPB also has an Alternative Dispute Resolution Policy and OCR provides additional information about the benefits of ADR on the Bureau's intranet. These materials explain the ADR process, why employees should consider ADR, the different types of ADR, and how an employee can request ADR. The Bureau's ADR Policy makes clear that although ADR is voluntary for EEO filers, supervisors and managers must participate in good faith if a filer elects ADR. The goals in having this strong ADR policy include resolving conflicts at an early stage, improving workplace communication and morale, and creating a more efficient EEO Program. 34 CONSUMER FINANCIAL PROTECTION BUREAU OCR offers ADR during the pre-complaint and formal complaint stages of the EEO process, including while cases are pending before the EEOC for hearing or on appeal. The Bureau also offers mediation on an ad hoc basis for non-EEO workplace disputes through OHC, under its Administrative Grievance Policy and through its negotiated grievance process. During FY 2016, OCR held approximately 12 mediations in connection with Part 1614 complaints. OCR is in the process of updating, to the extent needed, its ADR policy to ensure that it complies with the clarified standards in the revised EEOC's Management Directive 110 (effective August 51 2015). Consistent with the revised MD-110, the Legal Division — not the responsible management official directly involved in the dispute — has settlement authority for EEO cases at the administrative level, including during EEO counseling. OCR continues to assess internal data related to the success of the ADR program, including resolution rates, and is collecting information about best practices and benchmarks related to a recommendation for protocols to create a structure that may help better support openness and willingness to employ creative and early resolution options. The Agency has authorized ample funding for OCR and OHC to use contract ADR professionals to resolve workplace disputes. In addition, and as already described above, OCR procured approval to hire a Conflict Prevention Program Manager to enhance EEO and non-EEO ADR initiatives. This individual onboarded early in FY 2017 and previously led the nationwide ADR program for Congress (30,000+ employees). OCR also detailed a Senior Attorney and leader from another CFPB division for a four-month period to assist OCR in improving its ADR efforts. Practical knowledge gained and action plans In analyzing complaint trends and related information, CFPB concluded the following: Informal and formal complaints continued on a significant downward trajectory. Preliminary data from early FY 2017 suggests this trend is accelerating. CFPB will continue programmatic efforts to proactively prevent acts of discrimination (including harassment and retaliation) leading to complaints whenever possible, and is enhancing its ADR efforts to encourage informal resolution of disputes in all appropriate circumstances. • Retaliation remained the top basis alleged in formal complaints filed. The Bureau will continue to train and educate employees (particularly managers and supervisors) about 35 CONSUMER FINANCIAL PROTECTION BUREAU anti-retaliation rules and best practices for avoiding it, as well as vigorously enforce Bureau policy and federal law prohibiting it. The number of formal complaints filed alleging race discrimination declined again in FY 2016 (a two-year downward trend that began after FY 2014). The number of formal complaints filed alleging color, sex, and/or disability discrimination also declined in FY 2016. CFPB will continue to robustly enforce all anti-discrimination statutes and emphasize training on legal requirements that may be more complex, such as in the area of disability discrimination law (including the need to provide reasonable accommodations). • When practicable, given the Bureau's current slightly higher-than-government-wide average complainant/total workforce ratio and its focus on increasing work product quality, complaint processing times should be reduced. The Bureau will continue to leverage available personnel resources and technology to align complaint processing times with all regulatory requirements, wherever possible. CFPB also will deploy a Blanket Purchase Agreement (BPA) for investigative services and evaluate its effectiveness in reducing complaint processing times while enhancing work product (e.g., Report of Investigation) quality. The Bureau will focus on these and the following objectives during FY 2017 and FY 2018: • Continuing to incorporate the EEOC's six essential elements of a model EEO program to achieve greater program effectiveness; • Briefing senior leadership on the state of the EEO program to reaffirm support for the program; provide awareness of issues and trends, systemic or otherwise; and to solicit input on strengthening the Bureau's EEO program; • Continuing to process all informal and formal complaints and requests for ADR in compliance with 29 C.F.R. Part 1614 and EEOC Management Directive 110; • Maintaining accuracy and efficiency of EEO complaint data monitoring, tracking, and reporting through continued use of iComplaints and continued enforcement of robust internal controls related to data tracking and monitoring; • Leveraging internal communication channels to distribute EEO-related information through the use of various media, including electronic media, informational brochures, 36 CONSUMER FINANCIAL PROTECTION BUREAU and individual and group training, and promoting communication of information and early intervention to help Bureau officials identify the issues and bases that may give rise to EEO complaints; • Training of supervisors and managers to provide proactive approaches to resolving issues stemming from alleged violations of personnel policies and practices; • Fostering constructive, open, continuous communication between employees and management to help resolve workplace conflicts at the earliest possible opportunity, and ensuring that employees, management officials, and persons with settlement authority understand the purpose and value of ADR; Continuing to collaborate with stakeholders across the agency to analyze workforce demographic data and to establish and administer affirmative employment plans that ensure equal employment opportunity for all consistent with applicable law, rules, regulations, and guidance; • Increasing employee awareness of EEO statutes and ensuring that CFPB cultivates an inclusive work environment; • Reviewing feedback from employee surveys, exit interviews, listening sessions, and training to identify opportunities for improvement; Training supervisors and managers on leadership, management principles, communication techniques, legal compliance, and fostering diversity and inclusion; Ensuring CFPB management is accountable for the success of the EEO program through transparency, by emphasizing measurable EEO, diversity, and inclusion goals and objectives that are incorporated into divisional strategic plans, and through the performance assessment of supervisors and managers; • Using the Bureau's Triannual Performance Review process as a management tool to address cultural change, and EEO, diversity, and inclusion efforts within Divisions; • Supporting the implementation of employee resource groups and both executive-level and staff-level diversity councils; and 37 CONSUMER FINANCIAL PROTECTION BUREAU • Incorporating EEO best practices gained through the Bureau's coalitions with other Federal agencies, particularly financial regulatory agencies and other small- and medium-sized agencies. 38 CONSUMER FINANCIAL PROTECTION BUREAU 3.6 No FEAR Act training The No FEAR Act requires each Federal agency to train all employees regarding the rights and remedies applicable to them under the relevant antidiscrimination and whistleblower protection laws.33 OCR, OMWI, and OHC recognize the indispensable role training and education play in raising awareness of EEO-related rights and responsibilities and fostering a civil, respectful, and inclusive work environment. The Bureau uses various media and other innovative means to train and educate CFPB Executives, managers, supervisors, and employees about EEO concepts, rights, and policies. These efforts assist in ensuring that EEO is integrated into the Agency's strategic mission and crucial EEO-related information is readily accessible at all times. The Bureau makes use of virtually all of the ideas suggested by the EEOC in its September 2014 publication entitled "Preserving Access to the Legal System: A Practical Guide to Providing Employees with Adequate Information about Their Rights under Federal Equal Employment Opportunity (EEO) Laws and Regulations."34 The various means used to distribute information are described in the table below. 33 See Pub. L. No. 107-174, Section 202(c); see also 5 C.F.R. e 724203. 34 Th is guidance is available at haps //emu.) °Doc bov/ftderalipreserving_accest cfrn. 39 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 5: MEDIA USED TO DISTRIBUTE EEO INFORMATION Media Used To Distribute EEO Information Regular email notifications via "Ops Digest" and "Manager Minute" publications Regular email messages from the CFPB Director and OCR Director Annual statements from the CFPB Director on the No FEAR Act and on the Bureau's EEO Policy and Anti-Harassment Policy, provided in email and printed formats, and posted on the Bureau's intranet Posters placed throughout all Agency facilities in break rooms and work rooms A tri-fold brochure on EEO rights and responsibilities Display Stands with relevant hard-copy information placed near every elevator bank, in OHC, and in OCR office space Digital Display Boards (i.e., large monitors) in elevator banks in CFPB headquarters featuring rotating slides including brief messages on EEO and diversity and inclusion-related topics Guide to the Office of Civil Rights (distributed immediately to all new employees) EEO Resource Manual for Managers and Supervisors (provided to all new supervisors and during mandatory 2-day EEO training) Intranet and internet content, including all relevant policies and Frequently Asked Questions about OCR and discrimination-related topics, and periodic All-Employee "Announcements" on the homepage of the Bureau's intranet EEO-related notices on employee paystubs (containing a new notice each pay period) Formal training including: New Employee Orientation (NE0); mandatory annual No FEAR Act and harassment prevention trainings; mandatory Supervisory Development Seminar (SGS)i and mandatory 2-day manager EEO training led by the EEOC Training Institute; mandatory two-day diversity and inclusion training for new supervisors; mandatory diversity and inclusion training for all employees In-person dissemination of information is perceived by many as the most effective means to distribute EEO information. To that end, a member of OCR staff presents and distributes a hard copy "Guide to the Office of Civil Rights" to every new Bureau employee, in person, on or near his or her very first day of employment during New Employee Orientation. This guide contains detailed information on discrimination, harassment, and retaliation, and the EEO process — including the Part 1614 process and the 45-calendar day timeframe for initiating EEO counseling. In addition, OCR created and distributes an "EEO Resource Manual for Managers 40 CONSUMER FINANCIAL PROTECTION BUREAU and Supervisors" providing practical guidance on EEO compliance. Further, OHC sends each new manager a "CFPB New Manager Onboarding Information" guide that also contains critical EEO and diversity and inclusion information. OCR also conducts, collaborates in presenting, and/or sponsors numerous in-person trainings, as well. In his FY 2016 EEO Policy/Anti-Harassment Statement, Director Cordray conveyed his expectation that all Bureau employees prioritize diversity and inclusion and EEO training and put what they learn into practice every day. For example: • All 246 new hires at the Bureau (100%) completed mandatory New Employee Orientation Training during FY 2016, during which OCR staff provides an overview of EEO rights and responsibilities (including explaining the Part 1614 process and emphasizing the 45 calendar day timeframe for contacting an EEO counselor). • A total of 234 employees completed mandatory diversity training in FY 2016. CFPB began offering this two-hour awareness raising workshop to non-managerial employees to help develop a shared understanding of diversity and inclusion at the Bureau. The workshop focuses on the importance of diversity and inclusion in strengthening individual competence for interacting effectively in a diverse workplace and the ways in which an understanding of diversity and inclusion contributes to the effectiveness of the Bureau's work in serving consumers. As of the end of FY 2016,1,099 CFPB employees had completed this training, with the remainder scheduled to complete it by the end of calendar year 2016. Evaluations of the training indicated that it was well received and effective in increasing employees' awareness of the importance of diversity and inclusion to the Bureau's overall effectiveness. A total of 65 supervisors and managers completed a mandatory 2-day EEO Training conducted by the EEOC Training Institute in FY 2016, for a total of over 250 to date. A total of 47 supervisors and managers completed mandatory Leadership Excellence Seminars (LES) in FY 2016, and over 200 total supervisors and managers have completed these seminars to date. A total of 56 supervisors and managers completed the mandatory Supervisory Development Seminar (SDS) in FY 2016, and approximately 265 total supervisors and managers have completed this seminar to date — almost 95 percent. • A total of 112 supervisors and managers completed the mandatory supervisor 2-day 41 CONSUMER FINANCIAL PROTECTION BUREAU diversity training in FY 2016, and approximately 230 total supervisors and managers have completed this training to date — approximately 83 percent. A total of 44 employees completed structured interview training mandatory for all "lead interviews" in FY 2016, and approximately 294 total employees have completed this training to date. • A total of 1132 employees (69 percent) and 236 supervisors and managers (82 percent) completed mandatory performance management training containing EEO and diversity and inclusion components in FY 2016. In addition, after New Employee Orientation, each year all Bureau employees must take a onehour web-based training on the No FEAR Act, and a separate one-hour, web-based training on harassment prevention. Approximately 85 percent of employees completed this mandatory No FEAR Act training in FY 2016, and over 95 percent of employees completed the mandatory harassment prevention training in FY 2016. By FY 2018, OCR hopes, depending on resource availability, to begin offering live annual mandatory No FEAR Act and harassment and retaliation training for employees, in addition to the live New Employee Orientation training, and to develop and rollout an EEO "refresher" training curriculum for experienced supervisors and managers. In FY 2016, OCR also launched a new "Top 10 EEO Tips" series of optional webinars for all Bureau employees. This series of virtual brownbag presentations by OCR is designed for all CFPB personnel (managers/supervisors and non-supervisory employees), and provides "bite size" —30 minutes maximum — training in the form of practical tips on EEO rights and responsibilities. The first installment of the series was for Mental Health Awareness Month in May 2016, and offered tips on "Mental Health Awareness and You." OCR will continue to offer new webinars as part of this series in FY 2017, with upcoming installments likely addressing topics such as Top 10 EEO Pitfalls, reasonable accommodations (including for pregnancyrelated limitations and religion), and retaliation. Further, the OCR intranet page is an excellent resource for individuals wanting information about the EEO process. The OCR intranet page clearly describes the Part 1614 process, contains links to all pertinent policies and procedures, and offers a section of plain-language Frequently Asked Questions (FAQs) that is updated and augmented routinely. (This section of the intranet also welcomes and solicits ideas for additional FAQs, encouraging those visiting the site to email OCR with suggestions for topics about which additional guidance or clarification could be 42 CONSUMER FINANCIAL PROTECTION BUREAU helpful.) The OCR intranet page also contains contact and location information for OCR, including contact information for all OCR staff, to ensure that employees can easily seek OCR's assistance in person or virtually. 43 CONSUMER FINANCIAL PROTECTION BUREAU APPENDIX A: Legislative and regulatory requirements Section 203 of the No FEAR Act (Pub. L. No. 107-174) requires: (a) Annual Report. — Subject to subsection (b), not later than 180 days after the end of each fiscal year, each Federal agency shall submit to the Speaker of the House of Representatives, the President pro tempore of the Senate, the Committee on Governmental Affairs of the Senate, the Committee on Government Reform of the House of Representatives, each committee of Congress with jurisdiction relating to the agency, the Equal Employment Opportunity Commission, and the Attorney General an annual report which shall include, with respect to the fiscal year — (1) The number of cases arising under each of the respective provisions of law covered by paragraphs (1) and (2) of section 201(a) in which discrimination on the part of such agency was alleged; (2) The status or disposition of cases described in paragraph (1); (3) the amount of money required to be reimbursed by such agency under section 201 in connection with each of such cases, separately identifying the aggregate amount of such reimbursements attributable to the payment of attorneys' fees, if any; (4) The number of employees disciplined for discrimination, retaliation, harassment, or any other infraction of any provision of law referred to in paragraph (1); (5) The final year-end data posted under section 301(c)(1)(B) for such fiscal year (without regard to section 301(c)(2)); (6)A detailed description of — 44 CONSUMER FINANCIAL PROTECTION BUREAU (A) The policy implemented by that agency relating to appropriate disciplinary actions against a Federal employee who — (i) Discriminated against any individual in violation of any of the laws cited under section 201(a)(1) or (2); or (ii) Committed another prohibited personnel practice that was revealed in the investigation of a complaint alleging a violation of any of the laws cited under section 201(a)(1) 01 (2); and (B) With respect to each of such laws, the number of employees who are disciplined in accordance with such policy and the specific nature of the disciplinary action taken; (7) An analysis of the information described under paragraphs (1) through (6)(in conjunction with data provided to the Equal Employment Opportunity Commission in compliance with Part 1614 of Title 29 of the Code of Federal Regulations) including — (A) An examination of trends; (B) Causal analysis; (C) Practical knowledge gained through experience; (D) Any actions planned or taken to improve complaint or civil rights programs of the agency; and (8) Any adjustment (to the extent the adjustment can be ascertained in the budget of the agency) to comply with the requirements under section 201. Subpart C of 5 C.F.R. Part 724 requires: § 724.302 Reporting obligations. (a) Except as provided in paragraph (b) of this section, each agency must report no later than 180 calendar days after the end of each fiscal year the following items: (1) The number of cases in Federal court pending or resolved in each fiscal year and arising under each of the respective provisions of the Federal Antidiscrimination Laws and Whistleblower Protection Laws applicable to them as defined in § 724.102 of subpart A of 45 CONSUMER FINANCIAL PROTECTION BUREAU this part in which an employee, former Federal employee, or applicant alleged a violation(s) of these laws, separating data by the provision(s) of law involved; (2) In the aggregate, for the cases identified in paragraph (a)(1) of this section and separated by provision(s) of law involved: (i) The status or disposition (including settlement); (ii) The amount of money required to be reimbursed to the Judgment Fund by the agency for payments as defined in § 724.102 of subpart A of this part; (iii) The amount of reimbursement to the Fund for attorney's fees where such fees have been separately designated; (3) In connection with cases identified in paragraph (a)(1) of this section, the total number of employees in each fiscal year disciplined as defined in § 724.102 of subpart A of this part and the specific nature, e.g., reprimand, etc., of the disciplinary actions taken, separated by the provision(s) of law involved; (4) The final year-end data about discrimination complaints for each fiscal year that was posted in accordance with Equal Employment Opportunity Regulations at subpart G of title 29 of the Code of Federal Regulations (implementing section 301(c)(1)(B) of the No FEAR Act); (5) Whether or not in connection with cases in Federal court, the number of employees in each fiscal year disciplined as defined in § 724.102 of subpart A of this part in accordance with any agency policy described in paragraph (a)(6) of this section. The specific nature, e.g., reprimand, etc., of the disciplinary actions taken must be identified. (6) A detailed description of the agency's policy for taking disciplinary action against Federal employees for conduct that is inconsistent with Federal Antidiscrimination Laws and Whistleblower Protection Laws or for conduct that constitutes another prohibited personnel practice revealed in connection with agency investigations of alleged violations of these laws; (7) An analysis of the information provided in paragraphs (a)(1) through (6) of this section in conjunction with data provided to the Equal Employment Opportunity Commission in compliance with 29 CFR part 1614 subpart F of the Code of Federal Regulations. Such analysis must include: 46 CONSUMER FINANCIAL PROTECTION BUREAU (i) An examination of trends; (ii) Causal analysis; (iii) Practical knowledge gained through experience; and (iv) Any actions planned or taken to improve complaint or civil rights programs of the agency with the goal of eliminating discrimination and retaliation in the workplace; (8) For each fiscal year, any adjustment needed or made to the budget of the agency to comply with its Judgment Fund reimbursement obligation(s) incurred under § 724.103 of subpart A of this part; and (9) The agency's written plan developed under § 724203(a) of subpart B of this part to train its employees. (b) The first report also must provide information for the data elements in paragraph (a) of this section for each of the five fiscal years preceding the fiscal year on which the first report is based to the extent that such data is available. Under the provisions of the No FEAR Act, the first report was due March 30, 2005 without regard to the status of the regulations. Thereafter, under the provisions of the No FEAR Act, agency reports are due annually on March 30th. Agencies that have submitted their reports before these regulations became final must ensure that they contain data elements 1 through 8 of paragraph (a) of this section and provide any necessary supplemental reports by April 25, 2007. Future reports must include data elements 1 through 9 of paragraph (a) of this section. (c) Agencies must provide copies of each report to the following: (1) Speaker of the U.S. House of Representatives; (2) President Pro Tempore of the U.S. Senate; (3) Committee on Governmental Affairs, U.S. Senate; (4) Committee on Government Reform, U.S. House of Representatives; (5) Each Committee of Congress with jurisdiction relating to the agency; (6) Chair, Equal Employment Opportunity Commission; 47 CONSUMER FINANCIAL PROTECTION BUREAU (7) Attorney General; and (8) Director, U.S. Office of Personnel Management. 48 CONSUMER FINANCIAL PROTECTION BUREAU APPENDIX B: The Director's annual EEO and anti-harassment policy statement 49 CONSUMER FINANCIAL PROTECTION BUREAU September 2016 MEMORANDUM TO: All CFPB Employees FROM: Richard Cordray Director SUBJECT: Annual EEO and Anti-Harassment Policy Statement Dear Colleagues: Attached is my annual Policy Statement on Equal Employment Opporhmity (EEO) and Workplace Harassment. I ask everyone in the Bureau to read it carefully. am proud of onr recent accomplishments that have helped to make the Bureau a fairer, more inclusive, diverse, and welcoming workplace. As the Government Accountability Office (GAO) recently explained in a report that reflected its recognition of the extensive work that we have been doing around these issues, the Bureau: has expanded management training, developed new guidance on personnel practices, and developed a new performance management system. CFPB has made progress in adopting leading diversity management practices identified in prior GAO work, such as finalizing a diversity strategic plan, creating employee diversity groups, and expanding dhersity training. in addition, CFPB launched a new initiative to strengthen its organizational culture that includes obtaining employee input on ideas for improving CEPB's culture and addressing employer concerns. Finally, CFPB has strengthened its employee complaint processes by providing new training and guidance and creating feedback mechanisms to help evaluate progress in sonic areas. More specifically, we have (among other things): 50 • Studied the results of the annual ARS survey and respond to this invaluable feedback; • Established __ _ norms to strengthen CFPB culture; CONSUMER FINANCIAL PROTECTION BUREAU • launched the: • Finalized and implemented an I II. , .111L I[ Hr HHpIC)'.- I I r:L • policy; Continued to mandate diversity and inclusion and EEO training for all new supervisors and managers; • Provided in-person briefings to all new employees on their EEO rights and related processes; and Adopted ileNv ‘Ve vill continue our work to foster the inclusive Cu lure we want at CPPB. I want to reaffirIll alle1111 ilX/C2 Hy that we strive for a workplace where no individual feels marginalized or mistreated. Disrespect, discrimination, and retaliation inhibit our ability to protect consumers and they are contrmy to the kind of culture and institution we arc striving to build. last month, the Office of Civil Rights ((CR), acting under authority delegated by me tot x R, issued a decision concluding that the Bureau had engaged in unlawful retaliation and disability discrimination ‘vith respect to one 0111plOyl,C. This was the flisi Finding of discrimination against the Bureau to date. The attached Policy Statement emphasizes the 13ureau's institutional commitment to equal employment opportunity. Each and every (me of us must reaffirm our personal commitment to do our part to uphold EEO principles and comply with the law. Theirfor(7, I ex pect you all to: • Stand up to and stop acts of discrimination, harassment, and retaliation by contacting the Office of Civil Rights or the Office of !lumen Capital consistent 11 111. and our I ! I Cooperate promptly and fully in all anti-harassment and EEO investigations. Responding swiftly to requests for information from OCR or 01 IC is an important part of everyone's job here, regardless of ‘vhere in the Bureau we may work. • Prioritize diversity and inclusion and EEO training, including the annual mandatory "No FEAR Act" and anti-harassment trainings. Every Bureau employee is msponsible for learning about these issues and putting what you learn into practice every day. To learn more or seek help, you can reach out to our Office of Equal Opportunity and Fairness, which is comprised of the Office of Civil Rights (OCR) and the Office of Minority and Women Inclusion (0MWI). OCR serves as a neutral arbiter in EEO 2 51 CONSUMER FINANCIAL PROTECTION BUREAU complaint-related matters, and OMIVI mid OCR together help us all in our ongoing work to make the Bureau a fairer and more inclusive workplace. I am confident that the processes in place to root out and rectify violations of EEO laws are robust and working, and I thank OEOF for its important work on these matters. 52 CONSUMER FINANCIAL PROTECTION BUREAU The Director's Policy Statement on Euual Employtnent Opportunity and Workplace Harassment General EEO Policy Ills the clear policy of the Consumer Financial Protection Bureau (CFPB or Bureau) to pmvide equal employment opportunity (END) to all employees and applicants for employment. The CFPB has Tin tolerance for workplace discrimination, harassment, or retaliation.' We take all allegations of discrimination, harassment, and retaliation seriously. 1.Ve. Al deserve to work in an environment nbcre we will be treated fairly and equitably, and where we can participate fully in all benefits of employment, including recruitment, hiring, compensation, appraisals, awards, training, career development, promotions, and all the terms, conditions, and privileges of employment. Accordingly, the Bureau does not and will not discriminate or tolerate harassment against any employee or applicant hw employment on the basis of race, color, religion, sex (including pregnancy, sexual (lrientation, transgender status, gender identity or expression, gender non-conformity, or sex stereotyping of any kind), national origin, age (40 and above), disability, genetic informat1011, marital status, parental status, political affiliation, military service, union activities, whisfieblower activity, or any other factor. I )iscrim i nal ion and harassment on these bases is pmhibited by Federal statutes and Executive Orders. See 5 thti.C. § 200(d); 29 I § §§ 2102(b); 5 U.S.C. §§710i-7135; 29 ; 29 1..8.C. §633a; §791; th&C, §§ 430 1-35; 42 USC. § 2000c-16; 42 I § 20 00 110 suct; r 11478; LI 1:1087; ). 13145; E ). 13152; El). 13072. Discriminatory Harassment will not tolerate om discriminator \ harassment - even when the hostile or abusive conduct does not rise to the level itha violation ttiTederid hue. I fiscrim Mainly harassment is unwelcome or offensive Imatment, behavior, or conduct. - whether sexual or non-sexual, and whether verbal, physical, visual, or psychological - that denigrates, shows hostility or aversion townie's, or otherwise marginalizes an individual based on that individual's protected status, that a reasonable person would consider in hostile, or abusil e or that interferes with an individual's work performance. Offensive conduct includes unwelcome sexual overtures, propositions, or contact; basing employment decisions (or conditioning any benefit or privilege of employment) on acquiescence to verbal or physical sexual or romantic conduct; telling inappropriate jokes or stories; ridiculing, insulting, or mocking a wlleague or co-worker; using slurs or epithets; or physically assaulting, bullying, or intimidating others. Offensive conduct also could include displaying objects, pictures, or graphic You can also leam more about protections against mtaliation anti for whistleblowels in our annual No FEARAel Notice o. 4 53 CONSUMER FINANCIAL PROTECTION BUREAU materials, or making or disseminating comments or statements that am offensive to or show hostility toward an individual or gmup. The Bureau prohibits discriminatm, harassment by anyone in the workplace including harassment by managers, supervisors, and co-workers. In addition, the Bureau will not tolerate discriminately harassment by non-employees, such as contractors and employees of regulated entities. Employee Rights and Responsibilities As Bureau employees, it is up to each one of us to ensure we understand and adhere to these principles. Each one of us will be held accountable for compliance with EEO laws and merit system principles and policies, and for treating colleagues with respect, dignity, and pmfessional ism. Employees who feel that they are being harassed or otherwise have been subjected to offensive (e.g., hostile or abusive) conduct may (but are not required to) make their objections known to the offending party. If employees do not want to talk to the offending party, or if the harassment COOOMICS even after doing so, employees should also contact their supervisor, manager, a higher level management official, or the Lead of Employee and Libor Relations in the Glee ()I'llum:In Capital (011C), or call 202-4:75-7655. Employees who feel they have been harassed have a duty to report the incident so the ISureau can take steps to stop the offensive conduct. Employees should report any harassment below it becomes so severe or pervasive that it violates Federal law. (While isolated incidents of harassment generally do not violate federal law, a pattern of such incidents may he unlawful.) SIM ila Hy, employees who believe they have witnessed harassing conduct also have a duty to report the incident. (71,Pli will protect the confidentiality of individuals reporting such conduct to the fullest extent possible. Manager/Supervisor Rights and Responsibilities Managers and supervisors have a special responsibility to prevent, document, and promptly correct harassing conduct in the workplace. Managers and supervisors receiving reports of alleged harassment or who believe they have potentially or actually witnessed any such behavior must immediately contact the I.cad of Employee and labor Relations in the glice I herrn] Capital (011C), or call 202435-7655, The Bureau will take appropriate and immediate action in response to complaints about or knowledge of Niolations, in accordance with the Bureau's 1 1...liii "1. rl Iticl• Mallagenlent will take. appropriate corrective action as needed. The Bureau supports the right of any employee who believes she or he has been discriminated against or harassed (or witnessed discrimination or harassment) to 54 CONSUMER FINANCIAL PROTECTION BUREAU exercise the right to oppose unlawful discrimination or harassment, to file a complaint about it, or to participate in any related inquiry or investigation without fear of retaliation. Managers and supervisors must not retaliate against an employee for reporting harassment or for cooperating with any harassment investigation. .-thy such action will result in appropriate disciplinary action against the manager or supervisor. Employees who believe they hal e experienced unlawful prohibited conduct should promptly contact the • )i 1,•.• it I H.U.N. (OCR) to discuss your rights under the EEO laws. (Contact in for OCR is provided below.) TIowever, even if you CO ntact ( R to report unlawful harassment, ()I IC may still undertake its own independent internal investigation of the allegations to satisfy its obligations to exercise due care to promptly eliminate all hostile or abusive conduct in the workplace. Richard ('o rd September 2016 Additional Information You can read our complete EEC and Non-Discrimination Policy 1, You can read sonic. FAQ% about the Office of Civil Rights and its work i, . You can find the complete 'HT Procedures Related to Harassment and Inappropriate ( 'onducl You can fin(' additional information regarding Federal antiiliscrmiinatiori, whistleblower protection, and retaliation laws on: • • • • • • the CFPli's intrand at Lip the EEOC website at I the 0,Se wubsite at H In the 1)01. website at i the NISRIt website at I, 11 the PLR: \ website at •IIp . 1,11.1 .1, 11, Contact Information for the CEPS Office of Civil Rights Mail: Office of Civil Rights Consumer Financial Protection Itu man 1700 G Street, NW Washington, D.C. 20552 6 55 CONSUMER FINANCIAL PROTECTION BUREAU Hand-Delivery: Office of Civil Rights COI1SLIMer Financial Protection Bureau 1275 1st Street, NE Suite 261 ashington, D.C. 20002 Phone: 202- 415-91TO 1-855-233-0362 202- 435-9742 ad ni CI:EILEEOfiferPh.gov Fax: 202-435-9598 56 CONSUMER FINANCIAL PROTECTION BUREAU The Director's FY 2016 annual notice on the No FEAR Act and whistleblower protection laws/prohibited personnel practices 57 CONSUMER FINANCIAL PROTECTION BUREAU September 2016 MEMORANDUM TO: All CFPB Employees, Former Employees, and Applicants for Employment at CFPB FROM: Richard Cordrav Director SUBJECT: FY16 Annual Notice on the No FEAR Act and Mrhistleblower Protection Laws/Prohibited Personnel Practices otherwise known as the "No FEAR Act," requires Federal agencies like the CFPB to he accountable for violations of antidiscrimination and whistleblower protection laws." Pub. I.. 1(7-174, Sum ma ry. Congress found in passing the. No FEAR Act that "agencies cannot he rim effectively if those. agencies practice or tolerate discrimination." Pub. L. 107-74, Title I, General Provisions, §101(1). The No FEAR Act also requires Federal agencies, including the Bureau, to provide this notice to Federal employees, former Federal employees, and applicants for Federal employment. This notice is intended to inform you of the rights and protections available to you under Federal antidiscrimination, civil service, whistleblower protection, and antiretaliation laws. Antidiscrimination laws A federal agency cannot discriminate or tolerate harassment against any employee or applicant for employment on the basis of race, color, religion, sex (including pregnancy, sexual orientation, transgender status, gender identity or expression, gender non-conformity, or sex stereotyping of any kind), national origin, age No and above), disability, genetic information, marital status, parental status, political affiliation, military service, union activities, whistleblower activity, or any other nonmerit factor. Discrimination and harassment on these bases is prohibited by Federal statutes and F.xecutive Orders. See 5 §§ 2302(h); 5 U.S.C. §§ 7i0i-7135; 29 U.S.C. §206(d); 29 U.S.C. §631; 29 U.S.C. § 633a; 29 U.S.C. § 791; 38 U.S.C. §§ 4301-35; 42 U.S.C. §2000e-16; 42 U.S.C. § z000ff et seq.; E.G. 11478; E.O. 13087; E.O. 13145; E.O. 13152; E.O. 13672. 58 CONSUMER FINANCIAL PROTECTION BUREAU To pursue your rights under these statutes and executive orders, you may need to follow specific rules and meet certain deadlines. For instance: • If you believe that you have been the victim of unlawful discrimination and wish to pursue a discrimination claim on the basis of race, color, religion, sex (including pregnancy, sexual orientation, transgender status, gender identity or expression, gender non-wnfomlity, or sex stereotyping of any kind), national origin, disability, genetic information, or parental status you first must contact an Equal Employment Opportunity (EEO) counselor in the CFPB's ( I I p ii ii.. (OCR). (See contact information for OCR at the bottom of this notice.) You must contact an EEO counselor within 45 calendar days glebe alleged discriminatory action, or, in the ease of a personnel action, within 45 calendar days of the effective date of the action, before you may file a formal complaint of discrimination with the (ITES. See, e.g., 1. In the alternative (or in sonic cases, in addition), you may pursue a Ii ii discrimination complaint by filing a grievance through CFPB's :919 or , , ,9 "'ll I. VIII if such procedures apply to you. • I I you believe that you have been the victim or unlawful discrimination on the basis or age in violation of the Age I )iscrimination in Employment Act of 1907, you may proceed through the administrative El( ) process by contacting an EI9 ) con nselor in the liureau's within 45 days. (This is the same as for an allegation of discrimination based on race, color, religion, sex, national Origin, disability, genetic information, or parental status, as noted above). Allernalipay, you can choose to file an age-thserim Mallon lawsuit in an ppmpriate I I Tilled State district court. Ifyou choose this direct-suit option, I , )( 7) you must rirst give the , 9 I !II, , notice that you intend to sue. You must give the F,I9 )C this notice at least 30 days before you file your lawsuit in court. This notice-of-intent-to-sue may be filed in writing with the REOC, at P.O. Box 77960, Washington, D.C. 20013. You may also file the notice by facsimile (if the fax is to pages or less), at (202) 003-7022. Finally, ycm may file this notice by personal delhery to the EEOC's Office of Federal Operations/Federal Sector Programs Branch at 131 NI Street, NE, Was II C. 20507. Ion must file this notice of to within 180 calendar days 4the alleged discriminatory action. See 29 C.F.R. §1614.201(a), If you believe that you have been the victim of sex-based pay discrimination in violation of the Equal Pay Act of 1963, you may proceed through the administrative EEO process by contacting an EEO counselor in the Bureau's OCR within 45 days of an event you allege to be discriminatory. (This is the same as for an allegation of other bases of discrimination, as noted above). Alternatively, you may file a civil action in a court of competent jurisdiction within two years (or, if the violation is willful, three years) o the date of the alleged Egau I Pay Ad violation. Contacting an EEO Counselor in the 2 59 CONSUMER FINANCIAL PROTECTION BUREAU Bureau's OCR does not suspend the two- or three-year deadline for filing a civil action. See 29 C.F.R..§1614.408. Sex-based pay disparities also may violate Title VII of the Civil Rights Act of 1964, and individuals may challenge sex-based pay discrimination simultaneously under both the Equal Pay Act and Title VII. However, if you vish to allege that a pay disparity violates Title VII, you r711151 raise the Title VII allegation in the administrative EEO process by contacting an EEO counselor in the Bureau's OCR within 45 days of the e‘ ent you allege to be discriminatory — even if you also file an Equal Pay Act civil action over the same alleged pay disparity. • If you are alleging discrimination based on marital status, political affiliation, or any other non-merit factor you may file a written complaint with the I .< (OSC). (See also "Whistleblower Protection laws/Prohibited Personnel Practices" below.) • If you arc alleging thscrimMation based on military servi assistance nom the \ .; Department of labor (1)01.), the )SC, depending on the circumstances. U may request , (VETS) at the (NISPB), or • IF you are alleging discrimMation based on membershM or non-membership in union, or for union activities, you may request assistance from your U111011 (IIapplicable) or the : VV hist! ebb met. Protectic al Laws/Prohibited Perscamel Practices Federal employees have the right to be free from prohibited personnel practices, including retaliation for whistleblowing. 'Chi, Bureau is committed to making sure that all employees are aware of their rights, as well as the safeguards that are in place to protect them. The Whistleblimver Protection Act of 1989 and the IV histlehlower Protection Enhancement Act of 2012 provide the right for all covered federal employees to make whistlehlower disclosures and ensure that employees are protected from whistleblower retaliation. A Federal employee with authority to take, direct others to take, recommend, or approve any personnel action must not use that authority to take or fail to take, or threaten to take or fail to bike, a personnel action against an employee or applicant because that individual has engaged in whistleblowing. For these purposes, whistlehlowing is defined as the disclosure of information that an employee or applicant reasonably believes evidences (i) a violation of any law, rule, or regulation; (2) gross mismanagement; (3) a gross waste of funds; (4) an abuse of authority; (5) a substantial and specific danger to public health or safety; or (6) censorship related to scientific research or analysis, if such disclosure is not specifically prohibited by law and if such information is not specifically required by 3 60 CONSUMER FINANCIAL PROTECTION BUREAU Executive order to he kept seciwt in the intettst of national defense or the conduct of foreign affairs. Retaliation against an employee or applicant for making a protected disclosure is prohibited by 5 ITSC. § 2302(h)(8). Employees may make lawful disclosures to anyone, including, for example, management officials, the Inspector General of an -;1 !, , agency, and/or the i !,e, (OSC). This notice includes links below to information about OSC, which is an independent agency that protects federal employees from prohibited personnel practices, including whistlehlower retaliation and unlawful hiring practices. OSC. also provides an independent, scout channel for disclosing and resolving wrongdoing in federal agencies. Please also review the following fact sheet, which provides detailed information on the thirteen prohibited personnel practices and employees rights to file complaints with ( Additionally, you are encouraged to 112V iCW the following materials: ,,I, I," which descrihe different avenues for making whistleblower disclosures and OSC's role in accepting complaints from federal employees. If you believe that you have been the victim of whistleblower mtaliation, you nlay file ,, ) with I )SC at 173() NI Street NW., Suite 218, Washington, D.C. 20030 - 4505, or I Hi. through the )SC' wcbsite. a wr itten complaint p Retaliatio al for Engaging in Pi Accted Activity A Federal agency cannot mtal late against an employee or applicant because that individual exercises his or her rights under any ()I' the Federal antidiscrimination or whistleblower protections laws listed above. If you believe that you a it the victim of retaliation for engaging in protected activity and wish to puniue a legal remedy, you must II ow ns appropriate, the procedums described in the sections of this notice above entitled "Antidiscrimbilli10111,411.14" and "Whistleblower Protection Laws/Prohibited Personnel Practices" - or, if applicable, relevant administrative or negotiated grievance pmcedu Ns. Disciplinary Actions Under the existing laws, each agency retains the right, where appropriate, to discipline a Federal emplcwee who has engaged in discriminatory or retaliatory conduct, up to and including removal. If OSC. has initiated an investigation under 5 § 1214, however, according to 5 U.S.C. §12141), agencies must seek approval From the Special Counsel to discipline employees for, among other activities, engaging in prohibited retaliation. Nothing in the No FEAR Act alters existing laws or permits an agency to take unfounded disciplinary action against a Federal employee or to violate the procedural rights of a Federal employee who has been accused of discrimination. 4 61 CONSUMER FINANCIAL PROTECTION BUREAU Additional Information For further information regarding the No FEAR Act rules, see I 1 I_'Or contact the Bureau's I Ili 1'1 h -. (See contact information for OCR at the bottom of this notice.) You can find additional information about the No FEAR Act on the CI,PB's Intranet at III t.., c.ml. I R. r: H .1< .ci' The CFPB's No FEAR Act statistics can be found on the Bureau's external wehsite You can find additional in regarding Federal antidiscrimination, ‘vhistlehlower protection, and retaliation laws on the CE!' B's intranet at hi 1.1 ,H11 I I.., on the EEC X' wchsite at III 1 . . on the OSC wehsite at III 1. %%. ... the Webs 'Le at 1„ , on the I\ ISPB website ... the FIRA website at I .1. DOI Existing Rights Unchanged Pursuant to section 205 of the No FEAR Act, neither the Act nor this notice creates, ON pa IRIS, or reduces any rights otherwise available to any employee, former employee or applicant under the laws of the United States, including the provisions of law spccified ins I . .S.C. *2302(d). C(mtact Infm-matic in for the CFP13 Office of Civil Rights glice of Civil Rights Consumer Financial Protection Bureau 1700 Street, M \\ ashington, D.C. 20552 Hand-Delivery: Office of Civil Rights Consumer Financial Protection Eu reau t275 1st Street, NE Suite 261 Washington, D.C. 20002 62 CONSUMER FINANCIAL PROTECTION BUREAU Phone: 202-435-66E0 1-855-233-0362 202-435-974 2 (TT) CFPB_EE0(6 cfph.7,06 Fax: 202-435-9598 63 CONSUMER FINANCIAL PROTECTION BUREAU APPENDIX C: Summary of complaint data Equal Employment Opportunity Data Posted Pursu nt to Title III f the Notification and Federal Employee Antidiscrimination and Retaliati n Act of 2002 (No FEAR Act), Pub. L. 107174, for the Consumer Financial Protection Bureau (CFPB). For the period ending September 30, 2016. • Mixed-case complaints are included in this report. • Calculations begin day after triggering event but include the last day of event per 29 C.F.R. § 1614.604. 64 CONSUMER FINANCIAL PROTECTION BUREAU 1. Complaint activity TABLE 6: COMPLAINT ACTIVITY36 Complaint Activity Number of complaints filed Number of complainants Repeat filers36 2012 2013 2014 2015 2016 11 9 25 22 19* 11 9 24 19 18 0 0 1 3 1 *Three of these complaints were putative class complaints filed in a previous fiscal year. In FY 2016, an EEOC Administrative Judge (AJ) denied class certification in all three matters, requiring the matters to be processed currently as individual complaints. 5ee29 C.F.R. §1614.204(d)(7). Total new formal complaints filed in FY 2016 thus equal 16. 35 The No FEAR Act and implementing regulations require agencies to report data for the previous five fiscal years. CFPB opened officially on July 21, 2011! and accordingly does not have data to report for FY 2011. For this purpose, "repeat filers" include only individuals who have filed more than one complaint during the relevant fiscal year. This data does not include individuals who may have filed more than one formal complaint but who have never filed more than one complaint in any single fiscal year. 36 65 CONSUMER FINANCIAL PROTECTION BUREAU 1.1 Complaints by basis TABLE 7- COMPLAINTS BY BASIS* Complaints by Basis 2012 2013 2014 2015 2016 Race 3 4 17 14 8 Color 2 0 5 10 6 Religion 2 2 1 2 0 Reprisal 3 4 16 16 13 Sex 3 4 10 13 10 Pregnancy (PDA) 0 0 0 0 2 National Origin 4 1 8 5 2 Equal Pay (EPA) 0 1 0 2 5 Age 9 4 9 7 4 Disability 2 2 3 10 4 Genetic Information 0 0 0 0 0 Non-EEO 1 1 2 0 2 * Complaints can be filed alleging multiple bases. The sum of the bases may not equal total complaints filed. 66 CONSUMER FINANCIAL PROTECTION BUREAU 1.2 Complaints by issue TABLE 8. COMPLAINTS BY ISSUE Complaints by Issue 2012 2013 2014 2015 2016 Appointment/Hire 0 2 3 1 1 Assignment of Duties 2 3 8 5 6 Awards 0 0 0 0 0 0 0 0 3 2 0 0 1 0 0 0 2 13 7 7 Examination/Test 0 0 0 0 0 Medical Examination 0 0 0 0 0 Pay (Including Overtime) 0 1 4 5 7 Promotion/Non-Selection 8 0 10 6 11 Reasonable Accommodation — Disability 0 0 0 2 3 Reinstatement 0 0 0 0 0 Reasonable Accommodation — Religion 0 0 0 0 0 Retirement 0 0 0 0 0 Sex Stereotyping 0 0 0 0 0 Telework 0 0 0 0 0 Termination 1 1 2 0 1 Terms/Conditions of 2 2 3 13 8 Conversion to Full Time/Permanent Status Duty Hours Performance Evaluation/Appraisal 67 CONSUMER FINANCIAL PROTECTION BUREAU Employment Time and Attendance 0 1 4 2 3 Training 0 0 6 8 3 Other 0 0 2 1 0 TABLE 9: COMPLAINTS INVOLVING DISCIPLINARY ACTION Type of Disciplinary Action 2012 2013 2014 2015 2016 Demotion 0 1 0 0 1 Reprimand 0 0 9 2 1 Suspension 0 0 0 0 0 Removal 0 1 1 0 0 Other 0 1 0 0 0 TABLE 10. COMPLAINTS INVOLVING HARASSMENT Type of Harassment 2012 2013 2014 2015 2016 Non-Sexual 0 2 15 9 4 Sexual TABLE 11. 1 COMPLAINTS INVOLVING REASSIGNMENT Type of Reassignment 2012 2013 Denied Directed 68 CONSUMER FINANCIAL PROTECTION BUREAU 2014 2015 2016 2. Complaint processing times TABLE 12. PROCESSING TIMES FOR COMPLAINTS PENDING (FOR ANY LENGTH OF TIME) DURING FISCAL YEAR Type of Processing Time 2012 2013 2014 2015 2016 Average number of days in investigation 209.00 176.00 230.00 247.00 270.05 Average number of days in final action 58.00 26.00 17.00 119.00 91.83 TABLE 13: PROCESSING TIMES FOR COMPLAINTS PENDING (FOR ANY LENGTH OF TIME) DURING FISCAL YEAR WHERE HEARING WAS REQUESTED Type of Processing time 2012 2013 2014 2015 2016 Average number of days in investigation 0.00 288.00 278.00 183.00 242.83 Average number of days in final action 0.00 131.00 178.00 219.00 0.00 TABLE 14. COMPLAINTS PENDING (FOR ANY LENGTH OF TIME) DURING FISCAL YEAR WHERE HEARING WAS NOT REQUESTED Type of Processing Time 2012 2013 2014 2015 2016 Average number of days in investigation 209.00 176.00 214.00 293.00 316.71 Average number of days in final action 58.00 5800 90.00 5200 . 91.83 69 CONSUMER FINANCIAL PROTECTION BUREAU 3. Complaint dismissals and withdrawals TABLE 15. COMPLAINTS DISMISSED BY AGENCY Agency Dismissal Information Total complaints dismissed by agency Average days pending prior to dismissal TABLE 16. 2012 2013 2014 2015 2016 0 1 2 2 1 0.00 27.00 293.00 26.00 34.00 COMPLAINTS WITHDRAWN BY COMPLAINANTS Complaints Withdrawn 2012 2013 2014 2015 2016 Total complaints withdrawn by complainants I I 0 1 2 70 CONSUMER FINANCIAL PROTECTION BUREAU 4. Findings of discrimination TABLE 17. TOTAL FINAL AGENCY ACTIONS FINDING DISCRIMINATION Type of Findings 2012 2013 2014 2015 2016 It % # °A) It % # % # Total findings 0 0 0 0 0 0 0 0 0 0 Without hearing 0 0 0 0 0 0 0 0 1 100 With hearing 0 0 0 0 0 0 0 0 0 0 4.1 Findings by basis* TABLE 18: TOTAL FINDINGS OF DISCRIMINATION RENDERED BY BASIS Basis 2012 2013 2014 2015 2016 If 0/0 14 0/0 14 0/0 # 0/0 # 0/0 Total findings 0 0 0 0 0 0 0 0 0 0 Race 0 0 0 0 0 0 0 0 0 0 Color 0 0 0 0 0 0 0 0 0 0 Religion 0 0 0 0 0 0 0 0 0 0 Reprisal 0 0 0 0 0 0 0 0 1 100 Sex 0 0 0 0 0 0 0 0 0 0 71 CONSUMER FINANCIAL PROTECTION BUREAU Pregnancy (FDA) 0 0 0 0 0 0 0 0 0 0 National Origin 0 0 0 0 0 0 0 0 0 0 Equal Pay (EPA) 0 0 0 0 0 0 0 0 0 0 Age 0 0 0 0 0 0 0 0 0 0 Disability 0 0 0 0 0 0 0 0 1 100 Genetic Information 0 0 0 0 0 0 0 0 0 0 Non-EEO 0 0 0 0 0 0 0 0 0 0 TABLE 19: FINDINGS OF DISCRIMINATION RENDERED AFTER HEARING BY BASIS Basis 2012 2013 2014 2015 2016 # 0/0 14 0/0 14 0 /0 If 0/0 # 0 Total findings 0 0 0 0 0 0 0 0 0 0 Race 0 0 0 0 0 0 0 0 0 0 Color 0 0 0 0 0 0 0 0 0 0 Religion 0 0 0 0 0 0 0 0 0 0 Reprisal 0 0 0 0 0 0 0 0 0 0 Sex 0 0 0 0 0 0 0 0 0 0 Pregnancy (FDA) 0 0 0 0 0 0 0 0 0 0 National Origin 0 0 0 0 0 0 0 0 0 0 Equal Pay (EPA) 0 0 0 0 0 0 0 0 0 0 Age 0 0 0 0 0 0 0 0 0 0 Disability 0 0 0 0 0 0 0 0 0 0 Genetic Information 0 0 0 0 0 0 0 0 0 0 Non-EEO 0 0 0 0 0 0 0 0 0 0 72 CONSUMER FINANCIAL PROTECTION BUREAU /0 TABLE 20. FINDINGS OF DISCRIMINATION RENDERED WITHOUT HEARING BY BASIS Basis 2012 2013 2014 2015 2016 # 0/0 # °AD If 0/0 # °is # 0/0 Total findings 0 0 0 0 0 0 0 0 0 0 Race 0 0 0 0 0 0 0 0 0 0 Color 0 0 0 0 0 0 0 0 0 0 Religion 0 0 0 0 0 0 0 0 0 0 Reprisal 0 0 0 0 0 0 0 0 1 100 Sex 0 0 0 0 0 0 0 0 0 0 Pregnancy(FDA) 0 0 0 0 0 0 0 0 0 0 National Origin 0 0 0 0 0 0 0 0 0 0 Equal Pay (EPA) 0 0 0 0 0 0 0 0 0 0 Age 0 0 0 0 0 0 0 0 0 0 Disability 0 0 0 0 0 0 0 0 1 100 Genetic Information 0 0 0 0 0 0 0 0 0 0 Non-EEO 0 0 0 0 0 0 0 0 0 0 * Complaints can be filed alleging multiple bases. The sum of the bases may not equal total complaints and findings. 4.2 Findings by issue TABLE 21: Issue TOTAL FINDINGS OF DISCRIMINATION RENDERED BY ISSUE 2012 2013 2014 2015 2016 # °is # °/0 # ° is # %# °is 73 CONSUMER FINANCIAL PROTECTION BUREAU Total findings 0 0 0 0 0 0 0 0 1 100 Appointment/Hire 0 0 0 0 0 0 0 0 0 0 Assignment of Duties 0 0 0 0 0 0 0 0 1 100 Awards 0 0 0 0 0 0 0 0 0 0 Conversion to Full Time/Permanent 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 100 0 0 0 0 0 0 0 0 0 0 Medical Examination 0 0 0 0 0 0 0 0 0 0 Pay (Including Overtime) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 100 Reinstatement 0 0 0 0 0 0 0 0 0 0 Reasonable Accommodation— Religion 0 0 0 0 0 0 0 0 0 0 Retirement 0 0 0 0 0 0 0 0 0 0 Sex Stereotyping 0 0 0 0 0 0 0 0 0 0 Telework 0 0 0 0 0 0 0 0 0 0 Termination 0 0 0 0 0 0 0 0 0 0 Terms/Conditions of Employment 0 0 0 0 0 0 0 0 0 0 Time and Attendance 0 0 0 0 0 0 0 0 0 0 Training 0 0 0 0 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 0 0 0 Status Duty Hours Performance Evaluation/Appraisal Examination/Test Promotion/NonSelection Reasonable Accommodation— Disability 74 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 22: FINDINGS OF DISCRIMINATION RENDERED BY ISSUE - DISCIPLINARY ACTION Type of Disciplinary Action 2012 2013 2014 2015 2016 # 0/0 It 0/0 It 0/0 it 0/0 # 0/0 Demotion 0 0 0 0 0 0 0 0 0 0 Reprimand 0 0 0 0 0 0 0 0 0 0 Suspension 0 0 0 0 0 0 0 0 0 0 Removal 0 0 0 0 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 0 0 0 TABLE 23: Type of Harassment FINDINGS OF DISCRIMINATION RENDERED BY ISSUE - HARRASSMENT 2012 2013 2014 2015 2016 It 0/0 # 0/0 # 0/0 # 0/0 # 0/0 Non-Sexual 0 0 0 0 0 0 0 0 0 0 Sexual 0 0 0 0 0 0 0 0 0 0 TABLE 24. FINDINGS OF DISCRIMINATION RENDERED BY ISSUE - REASSIGNMENT Type of Reassignment 2012 2013 Denied O 00 Directed 0 TABLE 25. Issue 0 2015 2016 # # 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FINDINGS OF DISCRIMINATION RENDERED AFTER HEARING BY ISSUE 2012 2013 °Ai 75 2014 It CONSUMER FINANCIAL PROTECTION BUREAU 2014 °A) It 2015 °A) # 2016 0/0 # Jo Total findings after hearing 0 0 0 0 0 0 0 0 0 0 Appointment/Hire 0 0 0 0 0 0 0 0 0 0 Assignment of Duties 0 0 0 0 0 0 0 0 0 0 Awards 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Examination/Test 0 0 0 0 0 0 0 0 0 0 Medical Examination 0 0 0 0 0 0 0 0 0 0 Pay (Including Overtime) 0 0 0 0 0 0 0 0 0 0 Promotion/NonSelecfion 0 0 0 0 0 0 0 0 0 0 Reasonable Accommodation— Disability 0 0 0 0 0 0 0 0 0 0 Reinstatement 0 0 0 0 0 0 0 0 0 0 Reasonable Accommodation— Religion 0 0 0 0 0 0 0 0 0 0 Retirement 0 0 0 0 0 0 0 0 0 0 Sex Stereotyping 0 0 0 0 0 0 0 0 0 0 Telework 0 0 0 0 0 0 0 0 0 0 Termination 0 0 0 0 0 0 0 0 0 0 Terms/Conditions of Employment 0 0 0 0 0 0 0 0 0 0 Time and Attendance 0 0 0 0 0 0 0 0 0 0 Training 0 0 0 0 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 0 0 0 Conversion to Full Time/Permanent Status Duty Hours Performance Evaluation/Appraisal 76 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 26: FINDINGS OF DISCRIMINATION RENDERED AFTER HEARING BY ISSUE DISCIPLINARY ACTION Type of Disciplinary Action 2012 Demotion 0 0 0 0 0 0 0 0 0 0 Reprimand 0 0 0 0 0 0 0 0 0 0 Suspension 0 0 0 0 0 0 0 0 0 0 Removal 0 0 0 0 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 0 0 0 TABLE 27. Type of Harassment 2013 2014 2015 2016 FINDINGS OF DISCRIMINATION RENDERED AFTER HEARING BY ISSUE HARASSMENT 2012 2014 2013 2015 2016 It Non-Sexual o 0 0 0 0 0 0 0 0 0 Sexual 0 0 0 0 0 0 0 0 0 0 TABLE 28. FINDINGS OF DISCRIMINATION RENDERED AFTER HEARING BY ISSUE REASSIGNMENT Type of Reassignment 2012 2014 2013 2015 2016 %# %# % Denied O 00 0 0 0 0 0 0 0 Directed 0 0 0 0 0 0 0 0 0 77 0 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 29. FINDINGS OF DISCRIMINATION RENDERED WITHOUT HEARING BY ISSUE Type of Issue 2012 2013 # # 2014 2015 2016 0 /0 # # 0 /0 # 0 /0 Total findings without hearing 0 0 0 0 0 0 0 0 1 100 Appointment/Hire 0 0 0 0 0 0 0 0 0 0 Assignment of Duties 0 0 0 0 0 0 0 0 1 100 Awards 0 0 0 0 0 0 0 0 0 0 Conversion to Full Time/Permanent 0 0 0 0 0 0 0 0 0 0 Duty Hours 0 0 0 0 0 0 0 0 0 0 Performance Evaluation/Appraisal 0 0 0 0 0 0 0 0 1 100 Examination/Test 0 0 0 0 0 0 0 0 0 0 Medical Examination 0 0 0 0 0 0 0 0 0 0 Pay (Including Overtime) 0 0 0 0 0 0 0 0 0 0 Promotion/NonSelection 0 0 0 0 0 0 0 0 0 0 Reasonable Accommodation— Disability 0 0 0 0 0 0 0 0 1 100 Reinstatement 0 0 0 0 0 0 0 0 0 0 Reasonable Accommodation— Religion 0 0 0 0 0 0 0 0 0 0 Retirement 0 0 0 0 0 0 0 0 0 0 Sex Stereotyping 0 0 0 0 0 0 0 0 0 0 Telework 0 0 0 0 0 0 0 0 0 0 Termination 0 0 0 0 0 0 0 0 0 0 Terms/Conditions of Employment 0 0 0 0 0 0 0 0 0 0 Status 78 CONSUMER FINANCIAL PROTECTION BUREAU Time and Attendance 0 0 0 0 0 0 0 0 0 0 Training 0 0 0 0 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 0 0 0 TABLE 30. FINDINGS OF DISCRIMINATION RENDERED WITHOUT HEARING BY ISSUE — DISCIPLINARY ACTION Type of 2012 Discipline 2013 2014 2015 2016 It °A If 0/0 14 0/0 # 0/0 # 0/0 Demotion 0 0 0 0 0 0 0 0 0 0 Reprimand 0 0 0 0 0 0 0 0 0 0 Suspension 0 0 0 0 0 0 0 0 0 0 Removal 0 0 0 0 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 0 0 0 TABLE 31: FINDINGS OF DISCRIMINATION RENDERED WITHOUT HEARING BY ISSUE — HARASSMENT Type of Harassment 2012 Non-Sexual 0 0 0 0 0 0 0 0 0 0 Sexual 0 0 0 0 0 0 0 0 0 0 TABLE 32. 2013 2014 2015 2016 FINDINGS OF DISCRIMINATION RENDERED WITHOUT HEARING BY ISSUE — REASSIGNMENT Type of Reassignment 2012 2013 2014 2015 2016 rt °A, # 0/0 # a/0 Ar °/0 Ar 0/0 Denied 0 0 0 0 0 0 0 0 0 0 Directed 0 0 0 0 0 0 0 0 0 0 79 CONSUMER FINANCIAL PROTECTION BUREAU 5. Pending complaints TABLE 33. PENDING COMPLAINTS FILED IN PREVIOUS FISCAL YEARS BY STATUS Pending Complaints and Complainants Total complaints from previous fiscal years Total complainants TABLE 34. 2012 2013 2014 2015 2016 4 3 20 32 21 4 3 20 25 17 PENDING COMPLAINTS BY STATUS Where in EEO Process Complaints Are Pending 2012 2013 2014 2015 2016 Investigation 0 2 19 8 0 ROI issued, pending complainant's action 0 1 1 2 0 Hearing 0 0 0 12 18 Final Agency Action 0 0 0 6 2 Appeal with EEOC Office of Federal Operations 0 0 0 4 6 80 CONSUMER FINANCIAL PROTECTION BUREAU 6. Investigation timeframes TABLE 35 . INVESTIGATIONS THAT EXCEED TIME FRAMES Investigations 2012 2013 2014 2015 2016 Pending complaints where investigations exceed required time frames 0 0 0 2 0 81 CONSUMER FINANCIAL PROTECTION BUREAU March 29, 2017 The Honorable Jeb Ilensarling Chairman Committee on Financial Services U.S. House of Representatives 2129 Rayburn House Office Building Washington, D.C. 20515 Dear Chairman Hensarling: I received your letter from last week and thank you for your continued interest in the Consumer Financial Protection Bureau and in my own personal plans. As you noted. I was nominated by the President and confirmed by the Senate to serve a term of office that will be completed in July of 2018. In your letter, you ask whether I plan to serve my entire five-year term or whether there is some other specific date on which I plan to resign. At this time, I have no further insights to provide on that subject. Thank you again. Sincerely, r eVILIOQ Richard Cordray Director March 31, 2017 The Honorable Jeh Hensarling Chairinan Committee on Financial Services United States House of Representatives 2129 Rayburn House Office Building Washington, DC 20515 Dear Chairman Hensarling: Enclosed please find the Consumer Financial Protection Bureau's Consumer Response Annual Report, as required under Section 1013(b)(3)(C) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Should you have any questions about the enclosed report, please contact me at (202) 435-9711. Sincereli, ;1 7-- / / 76-- Catherine Galicia Assistant Director for Legislative Affairs I March 2017 Consumer Response Annual Report January 1 — December 31, 2016 Consumer Financial Protection Burea LI Message from Richard Cordray Director of the CFPB The Consumer Financial Protection Bureau began consumer response operations on July 21, 2011, as the nation's first federal agency with the sole mission to protect American consumers in the financial marketplace. Our Office of Consumer Response has continued to improve and expand the CFPB's ability to engage consumers that face financial challenges and bring their concerns to the attention of companies. The CFPB accepts complaints about many financial products and services, including mortgages, credit "We had actually lost over $1,goo... For u very cards, auto loans, student loans, deposit accounts, frustrating month we tried everything to reach debt collection, credit reporting, payday loans, the company for an explanation and finally put consumer loans, and more. As of March 1, 20117, we in u complaint with CFPB. Within two weeks we have handled over 1,136,000 consumer complaints. received a response from the company and a check for the difference. We are so gratefill to Listening to consumers is key to our mission. By CFPB and this avenue for resolution. lam answering consumer questions and handling their positive without their intervention our case complaints, we learn about consumers' experiences in the consumer financial marketplace, about would never have been resolved." — Consumer from California company practices and behaviors, and about emerging trends in the marketplace. There is much to be learned from the questions consumers ask and the complaints consumers submit about the financial industry. From our earliest days of handling complaints, we have monitored and reported on the types of issues about which consumers complain. With a growing CONSUMER FINANCIAL PROTECTION BUREAU volume of consumer complaints, we now identify, categorize, analyze, and synthesize what they have told us. By closely analyzing complaint patterns, we are able to identify spikes in specific complaint types; emerging trends; issues with new and evolving products; and patterns across geographic areas, companies, and consumer demographics. These insights help us prioritize our own supervision and enforcement work and ask better and more targeted questions when examining a company's records. With the help of complaints, we dig deeply into potentially unfair practices so we can prevent minor issues from becoming major problems. We also use complaints to identify opportunities to educate and empower consumers about the marketplace and their rights and to understand what the rules of the road should be when we consider and undertake rulemaking. Through our public Consumer Complaint Database, launched by Consumer Response in June 2012, others can learn from consumers' complaints too. We have published more than 730,400 complaints that have been sent to companies for response. We do this not only to empower consumers and inform the public, but also so that companies can learn from the data and improve their OINT1 compliance and customer service operations. In June 2015, the Bureau started giving consumers the opportunity to share their descriptions of what happened, in their own words, so that others can read about, better understand, and learn from their experiences. Through the questions they ask us, the stories they tell us, and the complaints they submit, the voices of consumers remain foundational to the Bureau's work. Many companies are adapting to this focus to become more directly responsive to consumer concerns, and thus to improve their customer service. We continue to work to fulfill Congress's vision that we stand on the side of consumers to help improve their financial lives. Through their complaints, consumers help us make the marketplace a better and safer place. This is good for consumers, for the responsible businesses that seek to serve them, and for the American economy as a whole. Sincerely, Rawne Crag, Richard Cordray 2 CONSUMER FINANCIAL PROTECTION BUREAU Table of contents Message from Richard Cordray 1 Table of contents 3 1. Introduction 5 2. How the CFPB handles complaints 11 3. Results 14 3 3.1 Complaints handled in 2016 14 3.2 Consumers' debt collection complaints 15 3.3 Consumers' credit reporting complaints 18 3.4 Consumers' mortgage complaints 22 3.5 Consumers' bank account and service complaints 25 3.6 Consumers' credit card complaints 27 3.7 Consumers' consumer loan complaints 29 3.8 Consumers' student loan complaints 31 3.9 Consumers' payday loan complaints 33 3.10 Consumers' prepaid cards complaints 36 3.11 Consumers' money transfer complaints 38 3.12 Other financial services complaints 40 3.13 How companies respond to consumer complaints 42 CONSUMER FINANCIAL PROTECTION BUREAU 4 3.14 Consumers' feedback about companies' responses 46 3.15 Consumer Response investigation and analysis 47 3.16 Conclusion 48 CONSUMER FINANCIAL PROTECTION BUREAU 1. Introduction The CFPB is the first federal agency solely focused on consumer financial protection.' Collecting, investigating, and responding to consumer complaints2 are integral parts of the CFPB's work.3 The Bureau's Office of Consumer Response hears directly from consumers about the challenges they face in the marketplace, brings their concerns to the attention of companies, and assists in addressing their complaints. Consumer Response also answers consumers' questions about financial products and services and provides consumers with an opportunity to share their experiences — positive or negative — with consumer financial products and services through the "Tell Your Story" feature on the Bureau's website. These stories, like complaints and questions, are reviewed by CFPB staff to help the Bureau understand current issues in the financial marketplace. When the Bureau opened its doors on July 21, 2011, it began consumer response operations on the same day, answering consumers' questions and accepting consumer complaints about credit cards. Since then, the Bureau has expanded its complaint handling to include complaints about: mortgages, bank accounts and services, student loans, vehicle and other consumer loans, credit reporting, money transfers, virtual currency, debt collection, payday loans, prepaid cards, and other financial services. ' The Dodd-Frank Wall Street Reform and Consumer Protection Act of 201u, Pub. L. No. 111-203 ("Dodd-Frank Act") created the CFPB to protect consumers of financial products or services and to encourage the fair and competitive operation of consumer Financial markets. 2 Consumer complaints are submissions that express dissatisfaction with, or communicate suspicion of wrongful conduct by, an identifiable entity related to a consumer's personal experience with a financial product or service. 3 See Dodd-Frank Act, Pub. L. No. 111-2u3, Section 1o21(c)(2). 5 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 1: TYPES OF COMPLAINTS OVER TIME Credit Mortgages July 21 2011 Bank arrourgand sereces pcvate student 'earls, arid Credit consume loan. reporting • December 1, March 1 2011 2012 Money transfers 0 :ober 22, A ri 4, 2013 Prepaid gelds credit repair, debt senlemem d n c pawn and title cans Debt col ection Pmcm loans July 10 2012 November 6, J ly 19, 2012 2014 V rteal cumency Cede'al student loon Ma ke-place se-Acing lending A must 11 F brua y 25 Ma ch 204 2 16 201h Consumers also contact the CFPB about other products and services. The Bureau refers consumers with questions to other regulators or additional resources, as appropriate. The CFPB's phased-in approach to taking complaints enabled Consumer Response to gather and incorporate feedback from consumers and companies into each subsequent complaint capacity expansion. For example, Consumer Response has improved its complaint submission process and enhanced communication with companies. Leveraging feedback from consumers and companies, as well as its own observations, Consumer Response identifies new opportunities to improve its processes and implement changes to make the process efficient and effective for consumers and companies. Since beginning to accept complaints on July 21, 2011, the CFPB has handled approximately 1,136,000 consumer complaints as of March 1,2017. 6 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 2: COMPLAINTS OVER TIME 30K a e." 20K C (73 a r 3 u ee, 10K ct) se E j OK 2011 2012 2013 2014 2015 2016 2017 Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan FIGURE 3: COMPLAINT VOLUME BY PRODUCT 2015 AND 2016 Debt collection 3rob, 2016 88 000 85.200 2015 Credit reporting 19% 2016 2044 2015 Mortgage Prepaid Money transfer Other financial services 22 400 9% 2016 26 600 80 6% 2016 54 4•/ 2016 22 200 16 400 13 500 12 300 7 300 2015 Payday loan 28 400 80 2015 Student loans 5C 800 10Th 2016 2015 Consumer loan 51 200 19% 2015 Credit card 55 000 18% 2016 2015 Bank aecobrit or serv ces 54 000 2016 2% 4A00 2015 2% S500 2016 0 94 , 2.500 2015 1% 3000 2016 0 84, 2.300 2015 0 94 , 2.400 2016 0 Th, 2.100 2015 0 7°, , 1 930 Percent of annual comp a ints CONSUMER FINANCIAL PROTECTION BUREAU NLJfllber of complaints Year over year, complaint volume has steadily increased, rising 7% from 271,600 in 2015 to 291,400 in 2016. Information about consumer complaints is available to the public, through the CFPB's public Convont Cr Coin pl nint Da th lvo so, launched on June 19, 2012.4 Complaints are added to the database after the company responds to the complaint, confirming a commercial relationship with the consumer, or after the company has had the complaint for 15 calendar days, whichever comes first. Complaints are not published if they do not meet all of the publication criteria.5 The public database was initially populated with credit card complaints and has been expanded over time: June 2012: populated with credit card complaints dating back to June 1, 2012; • October 2012: added credit card complaints dating back to December!, 2011; • March 2013: added mortgage complaints dating back to December 1, 2011; bank account and service complaints, student loan complaints, and other consumer loan complaints, all dating back to March 1, 2012; • May 2013: added credit reporting complaints dating back to October 22, 2012 and money transfer complaints dating back to April 4, 2013; • November 2013: added debt collection complaints dating back to July 10, 2013; July 2014: added payday loan complaints dating back to November 6, 2013; January 2015: added complaints about prepaid cards, other consumer loans (pawn and title loans), and other financial services dating back to July 19, 2014; • June 2015: added consumer complaint narratives and optional company public In December 2011, the MB asked the public to comment on a proposed policy of making some credit card complaint data publicly available. After considering those comments, the CHB finalized its policy for disclosing some of the data through its Consumer Complaint Database (Policy Statement). See Disclosure of Certain Credit Card Complaint Data, 77 Fed. Reg. 37,558 (June 22, 2012). 5 See Disclosure of Consumer Complaint Narrative Data, 8v) Fed. Reg, 15572 (March 24, 2015). 4 8 CONSUMER FINANCIAL PROTECTION BUREAU responses; February 2016: added tags to identify complaints submitted by older Americans and senicemembers and a field indicating whether the consumer consented to publication of their complaint narrative; and September 2016: added complaints about federal student loan servicing dating back to February 25, 2016, and virtual currency complaints dating back to August 11, 2014. The database contains certain individual complaint-level data collected by the CFPB, including the type of complaint, the date of submission, the consumer's zip code, and the company about which the consumer submitted the complaint. The database also includes information about the actions taken by a company in response to a complaint — whether the company's response was timely, how the company responded, and whether the consumer disputed the company's response. The database does not include confidential information about consumers' identities. On June 25, 2015, the CFPB began to publish consumer complaint narratives in the Consumer Complaint Database. Consumers now have the opportunity to share — in their own words — their experiences with the consumer financial marketplace. Only those narratives for which opt-in consumer consent is obtained and to which a robust personal information scrubbing process is applied are eligible for disclosure. The database now includes more than 130,000 complaints where consumers have opted to share their complaint narrative with others. The CFPB gives companies the option to respond publicly to the substance of the consumer complaints they receive from the CFPB by selecting from a set list of public-facing response categories. Web-based and user-friendly features of the database include the ability to filter data based on specific search criteria or tags, to aggregate data in various ways, such as by complaint type, company, state, date, or any combination of available variables, and to download data. Information from the database has been shared and evaluated on social media and using other new applications. 9 CONSUMER FINANCIAL PROTECTION BUREAU Consumer Complaint Database Each muck we send thOUb0 ltib of cm sumo's comaloints about nancial products and sera cos to companies for response These complaints are atrh idled hen otter the company responds or alter 15 days which ever corneal! sa By adding the, voice consumers nelp mprove tne finarc al marketplace Ylvalr earamatealtiate Shad 01•1•111/ MOAN. WWW 001111140011q0.1••• ald All consumerfinance gpvicom )11intdltab•ise Consumer Response continually strives to improve data quality and protect sensitive information, while increasingly making data available through reports about the complaints the CFPB handles and by sharing certain data with the public through the Consumer Complaint Database. In keeping with the CFPB's statutory responsibility and its commitment to accountability, this report provides an overview of the handling and analysis of complaints by the Bureau from January 1 through December 31, 2016.6 6 This report addresses the reporting requirements of Dodd-Frank Act Section 1u13(b)(3)(c), 12 U.S.C. § 5493(b)(3)(e) and Fair Credit Reporting Act Section 611(e), In U.S.C. §168ti(e). 10 CONSUMER FINANCIAL PROTECTION BUREAU 2. How the CFPB handles complaints Consumer Response receives complaints and questions directly from consumers. The CFPB accepts complaints th ough its website and by telephone, mail, email, fax, and referral. In addition to submittin complaints on the Bureau's website, consumers can also log on to a secure consumer port Ito check the status of a complaint and review a company's response. While on the website, consumers can chat with a live agent to get help completing a complaint form. Consumers can also call the Bureau's toll-free number to ask questions, submit a complaint, check the status of a complaint, and more. The CFPB's U.S.-based contact centers provide services to consumers in more than i8o languages and to consumers who are deaf, have hearing loss, or have speech disabilities via a toll-free telephone number. Cutting-edge technology, including secure company and consumer portals, makes the process efficient and user-friendly for consumers and companies. For companies, the CFPB provides secure channels for communicating directly with dedicated staff about technical issues. The CFPB continually strives to collect reliable complaint data while ensuring the system's ease of-use and effectiveness for consumers. When consumers submit complaints, they select the consumer financial product or service as well as the issue they are having with that product or service from a list. This provides structured data that can be used to group complaints to get a sense of which financial products and services consumers complain about and what issues they are having in the marketplace. 11 CONSUMER FINANCIAL PROTECTION BUREAU Complaints are sent via a secure web portal to the appropriate company: The company reviews the information, communicates with the consumer as needed, and determines what action to take in response. The company then reports back to the consumer and the CFPB via the secure company portal, and the Bureau invites the consumer to review the response and provide feedback. Consumers who have submitted complaints with the Bureau can log onto the secure consumer portal available on the CFPB's website or call a toll-free number to receive status updates, provide additional information, and review responses provided to the consumer by the company. IC Compl i t submit-I d Review and route Company response Complaint published Consumer review Analyze and report The process seeks to ensure that consumers receive timely responses to their complaints and that the Bureau, other regulators, consumers, and the marketplace have the complaint information needed to improve the functioning of the consumer financial markets for such products and services. We also collect unstructured data from consumers and companies during the complaint process. The consumer's narrative description of what happened, consumer-provided documents, the company's response, and company-provided documents are examples of unstructured data. The Bureau uses a variety of approaches to analyze consumer complaints including, for example, cohort and text analytics to identify trends and possible consumer harm. Our review and 7 In some cases, Consumer Response refers or sends a complaint to another regulator, for example, if a particular complaint does not involve a product or market that is within the Bureau's jurisdiction or one that is not currently being handled by the Bureau, or in cases where the company is not yet registered to respond to complaints in our system. Complaints handled by the Bureau, including those sent to other regulators, serve to inform the Bureau in its work to supervise companies, to enforce consumer financial laws, to write better rules and regulations, and to educate and engage consumers. 12 CONSUMER FINANCIAL PROTECTION BUREAU analysis of unstructured data offers deeper insights into consumers' complaints and helps the Bureau understand problems consumers are experiencing with consumer financial products and services. Throughout this process, subject matter experts help monitor certain complaints. For example, the Office of Servicemember Affairs coordinates with Consumer Response on complaints submitted by or on behalf of a servicemember or the spouse or dependent of a servicemember. For these purposes, a servicemember includes anyone who self-identifies as active duty, National Guard, or Reservist, as well as those who previously served and identify as a Veteran or retiree. 13 CONSUMER FINANCIAL PROTECTION BUREAU 3. Results 3.1 Complaints handled in 2016 Between January 1, 2016 and December 31, 2016, the CFPB handled approximately 291,400 consumer complaints.8 FIGURE 4: CONSUMER COMPLAINTS BY PRODUCTS 3m/5 Debt collection 19% Credr rounding 18% Mortgage 1C'h. Bank account or service 9% Cred card Consumer loan Student loan Payday loan 2% Prepaid 0 9i7, More/ transfer Other financial serv ce O.8 0 7°, Approximately 73% of all consumer complaints were submitted through the CFPB's website and This analysis excludes multiple complaints submitted by a given consumer on the same issue (i.e., duplicates) and whistleblower tips. All data are current as ofJanuary 1, 2017. 9 Percentages may not sum to hid percent due to rounding. 8 14 CONSUMER FINANCIAL PROTECTION BUREAU 7% via telephone calls. Referrals accounted for 12% of all complaints handled by the CFPB. The rest were submitted by mail, email, and fax. The tables and figures presented below show complaints by type, actions taken, company responses, and consumers' feedback about company responses.rn 3.2 Consumers' debt collection complaints Figures 5 and 6 and Table 1 show the types of debt collection complaints reported by consumers for the approximately 88,000 debt collection complaints the CFPB has handled. Approximately 41,400 (or 47%) of all debt collection complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (38%), found to be incomplete (i0%), or are pending with the CFPB or the consumer (4% and 1%, respectively). These complaints include first-party (creditors collecting on their own debts) and third-party collections. FIGURE 5: TYPES OF DEBT CONSUMERS COMPLAIN ABOUT 331/ Other 21,A I do not know 17% Medical Cred card 13% Payday loan Mortgage Auto Federal student loan Non-federal student loan Debt collection complaints led both the daily and monthly volume of complaints handled by the CFPB in 2016. The issues that consumers selected in 2016 were similar to the issues they selected in 2015. ni Percentages may not sum to Loo percent due to rounding. 15 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 6: TYPES OF DEBT COLLECTION COMPLAINTS REPORTED BY CONSUMERS 41%, Continued attempts to collect debt not owed Disclosure verification of debt 20'n Communication tactics 15% False statements or representation Taking or threatening an illegal action Improper contact or sharing of info 6% TABLE 1: TYPES OF DEBT COLLECTION COMPLAINTS REPORTED BY CONSUMERS Types of debt collection complaints Continued attempts to collect debt not owed (Debt was discharged in bankruptcy, debt resulted from identity theft, debt was paid, debt is not mine) Disclosure/verification of debt (Did not receive notice of right to dispute, not enough information to verify debt, did not disclose communication was an attempt to collect a debt) 41% 20% Communication tactics (Frequent or repeated calls, called outside of 8am-9pm, used obscene, profane or other abusive language, threatened to take legal action, called after sent written 15% cease of communication notice) False statements or representation (Attempted to collect wrong amount, impersonated attorney, law enforcement or government official, indicated committing crime by not paying 9% debt, indicated should not respond to lawsuit) Taking/threatening an illegal action (Threatened to arrest me or take me to jail if I do not pay, threatened to sue neon debt that is too old to be sued on, sued me without properly notifying me of lawsuit, sued me where I did not live or did not sign for the debt, attempted to/collected 9% exempt funds, seized or attempted to seize property) Improper contact or sharing of information (Contacted me after I asked not to, contacted my employer, contacted me instead of my attorney, talked to a third party about my debt) Total Debt Collection Complaints 6% 100% Many of the trends identified in ang continued into zoth. The most common type of debt collection complaint is about continued attempts to collect a debt that the consumer reports is not owed. In some of these complaints, consumers reported not being provided documentation to verify the debt, even after written, timely requests were submitted for verification of the purported debts. 16 CONSUMER FINANCIAL PROTECTION BUREAU In other complaints, consumers complained that first-party collectors (creditors collecting on their own debts) forwarded their accounts to third-party collectors for a debt that was not owed. Upon dispute with the third-party collector, consumers reported that the debt was sent back to the first-party, only to be later sent to a new third-party collector. Some consumers reported that collectors place the onus of proving that the debt is not owed on consumers throughout this cycle. Consumers reported their accounts were forwarded to third-party collectors without any prior contact from the first-party collectors of an outstanding balance. Some complained that accounts had been negatively reported to credit reporting companies even after communicating with the first- and third-parties that the debt was not owed. Consumers also reported that their accounts were not in a delinquent status prior to contact by third-party collectors. Communication tactics used by debt collectors was a common issue raised by consumers. Many of these consumers reported that they received multiple calls weekly or even daily. According to many consumers, requests to cease communications were not honored. For both first- and third-party collectors, consumers reported continued communications following an oral or written request to cease communications. Consumers continued to report that frequent or repeated calls are a commonly used collection tactic. In many complaints, consumers described collection calls to their place of employment even after having informed collectors that contact at work was prohibited by their employers. Some consumers reported that collectors made in-person visits to their workplace. In 2016, there was a slight increase in the number of consumers who complained about debt collectors who talked to a third party about their debt. Some of these consumers described how their debt was disclosed to a supervisor or other third-party. Consumers submitting medical debt collection complaints increased slightly in 2016. In the submission of complaints where "medical" was identified as the type of debt, consumers selected "debt was paid" and "debt was not mine" as their primary issue in the majority of the complaints. Frequently, consumers stated that third-party debt collectors attempted to collect medical debt with incorrect balances. in many of these complaints, consumers reported that they were not given enough information to verify a debt. Some consumers reported they had secured a payment plan with the original party; however, the account was forwarded to collection agencies without regard to prior approved payment plans. Other complaints involved consumers' insistence that the amount due was erroneous as they believed the amount pursued 17 CONSUMER FINANCIAL PROTECTION BUREAU by collectors was for expenses covered by their medical insurance. 3.3 Consumers' credit reporting complaints Figure 7 and Table 2 show the types of credit reporting complaints, as reported by consumers for the approximately 54,000 credit reporting complaints handled by the CFPB. This includes approximately 44,000 (81%) about the three largest nationwide credit reporting companies — Equifax, Experian, and TransUnion. Approximately 45,300 (or 84%) of all credit reporting complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (0.3%), found to be incomplete (14%), or are pending with the consumer or the CFPB (2% and 0.3%, respectively). FIGURE 7: TYPES OF CREDIT REPORTING COMPLAINTS REPORTED BY CONSUMERS Incorrect rricorri a•ron on credit report Credit report' rig company's inve6trgation 74% 11% Improper Jse of credit report Unable to obtain report or score Credit monitoring or identity protection 18 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 2: TYPES OF CREDIT REPORTING COMPLAINTS REPORTED BY CONSUMERS Types of credit reporting complaints Incorrect information on credit report (Information is not mine, Account terms, Account status, Personal information, Public record, Reinserted previously deleted information) 74% Credit reporting company's investigation (Investigation took too long, Did not get proper notice of investigation status or results, Did not receive adequate help over the phone, Problem with statement of dispute) 11% Improper use of my credit report (Report improperly shared by credit reporting company, Received marketing offers after opting out, Report provided to employer without written authorization) 6% Unable to gel my credit report or credit score (Problem gelling free annual report, Problem gelling report or credit score) 6% Credit monitoring or identity protection services (Problem cancelling or closing account, Billing dispute, Receiving unwanted marketing or advertising, Account or product terms and changes, Problem with fraud alerts) 3% Total Credit Reporting Complaints 100% The most common type of credit reporting complaint continues to be about information the consumer believes to be incorrect appearing on the consumer's credit report, such as information that does not belong to the consumer, incorrect account status, and incorrect personal information. These complaints frequently involve debt collection items. In some cases, consumers report having paid the debt appearing on their report. In other complaints, consumers assert the debt is no longer due because the debt is too old to be enforced in court. These complaints may reflect confusion about the fact that information on past overdue debt— even when paid or no longer enforceable because of limitations—often can remain on a credit report. Other complaints state that the debt belongs to a different consumer, or consumers state that they do not recognize the debt. Delays in updating inaccurate records, problems correcting inaccurate records, and public records being incorrectly matched to their credit reports continue to be frequent issues cited by consumers. 19 CONSUMER FINANCIAL PROTECTION BUREAU Consumers continued to report having trouble accessing their credit reports because they cannot answer detailed identity authentication questions. If denied access to their report because they failed online authentication, the option available is to mail copies of sensitive, identifying documents, which consumers note is time-consuming and worry is potentially unsecure. The three national credit reporting companies reported providing relief — monetary or nonmonetary — in response to approximately 23% of incorrect information complaints and complaints about the credit reporting companies' investigations sent to them for response. Providing relief to consumers varies by company with Experian providing relief in response to approximately 41% of complaints, Transunion providing relief in response to approximately 25% of complaints, and Equifax providing relief in response to approximately 5% of complaints. In addition to complaints about the three nationwide credit reporting companies—Equifax, Experian, Transunion—consumers submitted numerous complaints about specialty and other consumer reporting companies. These companies specialize in providing reports in a number of areas, including background and employment screening, checking account screening, rental screening, and insurance screening. Difficulty resolving inaccuracies is a major concern for consumers submitting complaints about specialty consumer reporting companies. These consumers report long delays, negative customer service experiences, and failed attempts to have inaccurate negative information removed. Tables 3 and 4 take a closer look at the two largest issue categories chosen by consumers that show the extent to which the sub-issues that consumers choose when submitting complaints about inaccurate information on their credit reports and credit reporting companies' investigations are similar at the three nationwide credit reporting companies. 20 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 3: SUB-ISSUES OF INCORRECT INFORMATION IN CREDIT REPORTING COMPLAINTS Sub-issue for incorrect information in credit report complaints Equifax Experian TransUnion National credit reporting companies Information is not mine (Belongs to someone else, identity theft, fraud, etc.) 35% 38% 32% 35% 30% 32% 27% 30% 10% 11% 11% 11% 11% 7% 8% 9% Personal information (Wrong date of birth, address, etc.) 8% 8% 8% 8% Reinserted previously deleted information 6% 4% 15% 8% Total Incorrect Information in Credit Report Complaints 100% 100% 100% 100% Account status (Paid bill on time, account closed, etc.) Account terms (Creditor name/info, balance, payment, etc.) Public record (Bankruptcy, judgment, etc.) TABLE 4 SUB-ISSUES OF CREDIT REPORTING COMPANY'S INVESTIGATION COMPLAINTS National credit reporting companies Sub-issue for credit reporting company's investigation complaints Equifax Experian TransUnion No notice of investigation status or result 36% 44% 41% 40% Problem with statement of dispute 32% 30% 28% 30% Investigation took too long 23% 17% 19% 20% Inadequate help over the phone 10% 10% 12% 10% Total Credit Reporting Company's Investigation Complaints 100% 100% 100% 100% 21 CONSUMER FINANCIAL PROTECTION BUREAU 3.4 Consumers' mortgage complaints Figures 8 and 9 and Table 5 show the types of mortgage complaints reported by consumers for the approximately 51,200 mortgage complaints the CFPB has handled. Approximately 43,000 (or 84%) of all mortgage complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (11%), found to be incomplete (3%), or are pending with the consumer or the CFPB (0.4% and 1%, respectively). FIGURE 8: TYPES OF MORTGAGE PRODUCTS CONSUMERS COMPLAIN ABOUT 351/ Other Conventional fixed mortgage 13% FHA mortgage 10% Conventional adjUstable mortgage , ARM) Home eqLity loan or line of credit VA mortgage 3% Reverse mortgage For mortgage complaints, as with all other complaints, the consumer selects the issue that best describes the problem they are having. These issues correspond to the part of the mortgage process with which they are having a problem. Reflecting the complexity and interrelated nature of mortgages and mortgage issues, consumers are not asked to provide further specificity by selecting a sub-issue. This ensures the reliability of mortgage complaint data that we collect from consumers and share in reports and through the Consumer Complaint Database. FIGURE 9: TYPES OF MORTGAGE COMPLAINTS REPORTED BY CONSUMERS 40% Making payments Problems when unable to pay Applying for the loan 38% 10% Signing the agreement Receiving a credit offer Other 22 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 5. TYPES OF MORTGAGE COMPLAINTS REPORTED BY CONSUMERS Types of mortgage complaints Making payments (Loan servicing, payments, escrow accounts) 40% Problems when you are unable to pay (Loan modification, collection, foreclosure) 38% Applying for the loan (Application, originator, mortgage broker) 10% Signing the agreement (Settlement process and costs) 6% Receiving a credit offer (Credit decision/Underwriting) 3% Other 3% Total Mortgage Complaints 100% Complaint submissions increased in 2016 for consumers who reported the issue of "making payments (loan servicing, payments, escrow accounts)." Consumers complaining about the servicing transfer of their loan account voiced concerns of mismanagement of payments when made to either the prior or current servicer on or around the effective date of transfer. Many of these consumers reported that payment was not credited to their account. Some consumers reported post service transfer issues involving their escrow account resulted in an increase to their monthly payment with no clear explanation provided by their servicers. Additionally, consumers who reported being involved in the loss mitigation assistance process at the time of the loan servicing transfer complained that documentation (e.g., applications, modification approvals) was not provided to the new servicer. Some consumers reported missing loan payments, resulting in delinquent account statuses and negative reporting of the account to credit reporting companies. A number of consumers complained of payment issues involving monthly payments made via bill pay services with their financial institutions. These consumers reported that payments were electronically transmitted to their servicers, but not credited to their loan account. Consumers who were approved for loss mitigation options—for example, a trial period plan, forbearance agreement, or loan 23 CONSUMER FINANCIAL PROTECTION BUREAU modification—reported that their payments were not accepted or applied as intended. In managing escrow accounts, instances of over-collection, unexplained shortages, and untimely tax and insurance disbursements are all common issues that consumers reported. Consumers complained that the escrow discrepancies led to erroneous increases to their mortgage installment amount. Consumers reported that after paying an identified shortage disclosed in their escrow analysis statement, funds were not applied accurately and resulted in an increase in their monthly payment. Other complaints involved issues regarding the disbursement of funds from escrow accounts to pay for collections. Some consumers reported that despite having an escrow account for insurance, their servicer failed to submit timely payment to their homeowner's insurance company, which ultimately left their property without adequate coverage. The next most complained about issue involved problems consumers report when they are unable to pay, loan modification, collection, and foreclosure. In particular, complaints involving the loss mitigation assistance process often detailed repeated requests by servicers for submission of the same documentation and lack of responsiveness from the consumers' single point of contact. Some consumers reported receiving conflicting and confusing foreclosure notifications while undergoing loss mitigation assistance review. Many consumers complained about the denial of their modification applications, while others stated that the terms of the modification offered to them were unaffordable. Communication issues were reported by consumers as attempts to contact their servicers were met with difficulty and often resulted in confusing and contradictory information. Consumers seeking to obtain clarification regarding loan account reinstatement amounts, charges and fees, or interest rate increases stated they were provided ambiguous information. Some consumers described their experience as frustrating and asserted that the low level of customer service attributed to the delay in account resolution. Consumers reported that after having experienced property damage, they filed insurance claims, received their claims benefit checks, and forwarded those checks to their servicers. However, these consumers stated that servicers delayed releasing funds needed to make necessary repairs to their homes despite having provided all required documentation. Consumer complaints about mortgage originations often involved reports of prolonged and 24 CONSUMER FINANCIAL PROTECTION BUREAU confusing application and approval processes. Some consumers described unresponsive loan representatives and stated that they were required to submit multiple loan applications. A number of consumers reported that processing delays resulted in the loss of favorable interest rates and expiration of rate locks. 3.5 Consumers' bank account and service complaints Figures 10 and 11 and Table 6 show the types of bank account and service complaints, such as complaints about checking and savings accounts, as reported by consumers for the approximately 28,400 complaints handled by the CFPB. Approximately 22,200 (or 78%) of all bank account or service complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (16%), found to be incomplete (4%), or are pending with the consumer or the CFPB (0.5% and 1%, respectively). FIGURE 10 TYPES OF BANK ACCOUNTS AND SERVICES CONSUMERS COMPLAIN ABOUT 58'f Checking account 33'/ Other bank product/service Savings account (CD) Cerificate of deposit 3% Cashing a check without an account 0 n, FIGURE 11: TYPES OF BANK ACCOUNT AND SERVICE COMPLAINTS REPORTED BY CONSUMERS 46% Account management 24,A Deposits and withdrawals Sending or receiving payments 11% Problems nn Used by low kinds Using a debit or ATM card 25 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 6: TYPES OF BANK ACCOUNT AND SERVICE COMPLAINTS REPORTED BY CONSUMERS Types of bank account and service complaints Account opening, closing, or management (Confusing marketing, denial, disclosure, fees, closure, interest, statements, joint accounts) 46% Deposits and withdrawals (Availability of deposits, withdrawal problems and penalties, unauthorized transactions, check cashing, payroll deposit problems, lost or missing funds, transaction holds) 24% Making or receiving payments (Problems with payments by check, card, phone or online, unauthorized or fraudulent transactions, money/wire transfers) 11% Problems caused by my funds being low (Overdraft fees, late fees, bounced checks, credit reporting) Using a debit or ATM card (Disputed transaction, unauthorized card use, ATM or debit card fees, ATM problems) Total Bank Account and Service Complaints 9% 9% 100% Consumers submit complaints about accounts or services offered by banks, credit unions and nonbank companies under the general category of "bank accounts or services." The most common type of bank account and service complaint continues to relate to opening, closing, or managing the account. Consumer complaints about the use of consumer and credit reporting data for account screening are also common. Consumers frequently mentioned learning of a furnisher's past negative reporting to both specialty reporting companies and national credit reporting companies when they attempted to open a new bank account. Consumers also expressed that they have difficulty addressing potential errors on their reports. Promotional offers for opening new accounts were the focus of a number of complaints, including offers for airline miles and promotional cash. Some of these complaints involved the consumer's eligibility for the promotional offer—for example, when a consumer applies for an offer that they were not eligible for. Other complaints involved disputes over whether the consumer had met the required terms for a promotional offer. Complaints related to overdrafts remain common, including complaints about transaction 26 CONSUMER FINANCIAL PROTECTION BUREAU ordering. Consumers complained about overdrafts that took place because of confusion over the availability of funds that they were attempting to deposit. Consumers also regularly complained about the size of overdraft fees when making small dollar purchases. Other fees, including insufficient fund fees, extended overdraft fees and monthly maintenance fees were also frequently the subject of complaints. The availability of funds deposited via check or through direct deposit is a concern for consumers. Consumers expressed frustration with bank check holding policies and by the length of time it takes for various negotiable instruments to clear and become available. A number of these complaints involved mobile deposit applications and problems that consumers encountered when using them—including institutions having different funds availability policies for mobile deposits. Consumers also frequently complained about error resolution procedures for their deposit accounts, including timelines for investigation and provisional credit for disputed transactions. Consumers often asserted that a specific transaction was not authorized or that they were victims of fraud or identity theft. The meaning of authorization in the context of error resolution appears to cause confusion for some consumers as they attempted to dispute transactions because they were dissatisfied with the products or services that they purchased. A number of consumers have submitted complaints related to the probate process. These consumers frequently mentioned difficulty getting information about and access to their deceased relatives' accounts. These complaints often involved different types of accounts, including savings accounts, certificates of deposit, trust accounts, and retirement accounts. 3.6 Consumers' credit card complaints Table 7 shows the most common types of credit card complaints that the CFPB has handled as reported by consumers. Seventy three percent of the approximately 26,600 credit card complaints fell into these ten categories. Approximately 21,400 (or 81%) of all credit card complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatmy agencies (14%), found to be incomplete (3%), or are pending with the consumer or the CFPB (04% and 1%, respectively). 27 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 7: MOST COMMON CREDIT CARD COMPLAINTS REPORTED BY CONSUMERS Most common credit card complaints Billing disputes 17% Other 13% Identity theft / Fraud! Embezzlement 12% Closing! Cancelling account 7% Customer service / Customer relations 4% Delinquent account 4% APR or interest rate 4% Rewards 4% Advertising and marketing 4% Late fee 3% Credit Card Complaints in Top 10 Types 73% Billing disputes continue to be the most common type of credit card complaint. Consumers complained about the application of payments to their accounts with multiple balances and different expiration periods that resulted from balance transfers, cash advances, or deferred interest purchases. These consumers expressed that they were inadequately informed of how their payments would be applied and were surprised that payments were not applied to promotional or deferred interest balances with limited terms. Some consumers also thought that no interest charges would be incurred during the deferral period regardless of whether the debt is paid in full. Some consumers who received insurance products (e.g., phone or travel insurance), warranty extensions and guaranties, improved return policies, price protection services, and other similar benefits through their card programs complained about difficulties they reported experiencing while attempting to take advantage of these benefits. Credit decisions, including initial application decisions and servicing changes (e.g., interest rate 28 CONSUMER FINANCIAL PROTECTION BUREAU adjustments, credit limit reductions), were frequently the subject of complaints. Consumers complained of difficulty understanding determinations made by credit card companies and the reasons stated on letters explaining the decisions. These consumers also expressed concern about existing terms on their credit report that they felt did not reflect their creditworthiness. Other consumers expressed a belief that prejudice or bias may have impacted those credit decisions. Consumers continued to submit complaints regarding the closure of their account without their knowledge or consent. In response to these complaints, companies often replied that the consumer's account was closed because of default or suspected fraud. Also, consumers expressed a concern about the potential negative effect on their credit score when accounts were closed due to inactivity. Some of these consumers stated that they would have used the cards in question if they had been notified of the impending closure. Misleading offers for rewards program was a topic of concern for many consumers. These consumers complained of difficulty when attempting to receive promised benefits and felt that the terms and conditions of the programs were not clearly explained when they opened the card. Complaints about bonus points or miles programs, cash back programs, and travel benefits programs were especially common in these complaints. Consumers expressed frustration with various fees and additional costs associated with their credit cards. For example, although consumers appear to understand why late fees are assessed to their accounts, many felt that the fees should not be applied when an automatic payment failed or when a billing statement did not arrive in a timely manner. 3.7 Consumers' consumer loan complaints Figures 12 and 13 and Table 8 show the types of consumer loan complaints, such as complaints about installment loans, vehicle loans and leases, personal lines of credit, and pawn and title loans reported by consumers for the approximately 16,400 consumer loan complaints handled by the CFPB. Approximately 9,800 (or 6o%) of all consumer loan complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (28%), found to be incomplete (7%), or are pending with the consumer or the CFPB (i% and 4%, respectively). 29 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 12: TYPES OF CONSUMER LOANS CONSUMERS COMPLAIN ABOUT 48% Vehicle loan Installment loan 371/ Vehicle lease 8% Personal line of credit Title loan 2,/,, Pawn loan 0 5$, FIGURE 13: TYPES OF CONSUMER LOAN COMPLAINTS REPORTED BY CONSUMERS 450/0 Managing he loan lease or line of credit 228s Problems when you are unable to pay 18% Taking out loan or lease or account terms and changes Shopping for a loan lease or line o' credit 12M Other 2% Charged fees or interest I didn't expect 1'0 TABLE 8 TYPES OF CONSUMER LOAN COMPLAINTS REPORTED BY CONSUMERS Types of consumer loan complaints To Managing the loan, lease, or line of credit (Billing, late fees, damage or loss, insurance (GAP, credit, etc.), credit reporting, privacy) 45% Problems when you are unable to pay (Debt collection, repossession, set-off from bank account deficiency, bankruptcy, default) 22% Taking out the loan or lease! Account terms and changes (Term changes (mid-deal changes, changes after closing, rates, fees, etc.), required add-on products, trade-in payoff, fraud) Shopping for a loan, lease, or line of credit (Sales tactics or pressure, credit denial, confusing advertising or marketing) 18% 12% Other 2% Charged fees or interest I didn't expect 1%0 Total Consumer Loan Complaints 100% 30 CONSUMER FINANCIAL PROTECTION BUREAU The table illustrates that the most common type of consumer loan complaint pertains to managing the loan, lease, or line of credit. Other common types of complaints address problems consumers have when they are unable to pay—including issues related to debt collection, bankruptcy, default, and problems when taking out the loan or lease, such as term changes. Consumers continued to complain that they experienced a "bait and switch" where the lenders offers favorable terms to attract their interest in a product and then changes those terms right before the contract is consummated. This behavior was described as confusing and often led to consumers paying much more for a loan than they were initially told. In 2016, consumer loan complaints with the sub-product of vehicle loan were submitted more frequently than other sub-products. In these complaints, consumers complained about payment processing issues, including not having their payments applied to their accounts in a timely and correct manner. Consumers also complained of inaccurate debiting of their bank accounts for monthly payments. Some consumers complained that they did not understand why their account balances were not decreasing after making a larger number of monthly payments. These consumers indicated that they did not fully understand the effects of fees and high interest rates on the total cost of their loans. 3.8 Consumers' student loan complaints Figure 14 and Table 9 show the types of student loan complaints as reported by consumers for the approximately 12,300 student loan complaints handled by the CFPB11. Approximately 8,300 (or 68%) of all student loan complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (17%), found to be incomplete (12%), or are pending with the consumer or the CFPB (2% and 2%, respectively). "The Bureau began handling Federal student loan servicing complaints on February 25, 2016. The Bureau does not handle complaints about financial aid eligibility or Federal student loan origination (getting a loan). 31 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 14: TYPES OF STUDENT LOAN COMPLAINTS REPORTED BY CONSUMERS 670A Dealing with my lender or servicer Cant r epay my loan 30% Gett ng a loan TABLE 9 TYPES OF STUDENT LOAN COMPLAINTS REPORTED BY CONSUMERS Types of student loan complaints Dealing with lender or servicer (Making payments, getting information about my loan. Managing my account) 67% Can't repay my loan (Fees, default, bankruptcy, billing, deferment, forbearance, fraud, credit reporting) 30% Getting a loan (Confusing terms, rates, denial, confusing advertising or marketing, sales tactics or pressure, financial aid services, recruiting) 2% Total Student Loan Complaints 100% The most common type of student loan complaint's related to dealing with a lender or servicer and includes issues such as making payments, getting information about a loan, and managing an account. Borrowers continued to report issues involving loan servicing, including payment processing problems, difficulty in obtaining documented loan account history, inaccurate account status, and customer service experiences when inquiring on repayment options. More frequently than other issues, non-federal and federal student loan borrowers expressed their concerns relating to trouble with how payments are handled. Borrowers complained of misapplied payments and inaccurate accounting of payments. Some borrowers complained of misapplication of payments and reported that payments were not applied to specified accounts, but rather applied to all accounts managed by the servicer. Some federal student loan borrowers reported that when contacting their loan servicers regarding financial distress, servicers provided them with information on hardship forbearance or deferment, instead of more beneficial options like income-driven repayment plans. Also, confusion on the difference between forbearance and deferment options was expressed by 32 CONSUMER FINANCIAL PROTECTION BUREAU borrowers of private and federal loans. Federal student loan borrowers complained of difficulty enrolling in income-driven repayment plans. Borrowers reported lost documentation, extended application processing times, and unclear guidance when seeking to switch from one income-driven repayment plan to another. Additionally, federal student loan borrowers described their experiences when trying to obtain guidance in completing annual income recertification for their income-driven repayment plan. These borrowers reported receiving insufficient information from their servicers to meet recertification deadlines and lengthy processing times. Non-federal and federal student loan borrowers reported issues of incorrect reporting of their loans to the credit reporting companies. Borrowers stated that their loan accounts were paid in full or not in a delinquent status but were being reported negatively. Some borrowers reported being contacted by collection companies for accounts that had been paid in full or for debts that were not owed. 3.9 Consumers' payday loan complaints In addition to the 7,300 payday loan related debt collection complaints reported in section 3.2, figures is and 16 and Table 10 show the types of payday loan complaints reported by consumers for the approximately 4,400 payday loan complaints the CFPB has handled. Approximately 1,800 (or 41%) of all payday complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (41%), found to be incomplete (13%), or are pending with the consumer or the CFPB (1% and 4%, respectively). 33 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 15 TYPES OF PAYDAY LOAN COMPLAINTS REPORTED BY CONSUMERS Cannot contact lender Charged fees or interest I did not expect 30%, Received a loan I did not apply for 14% Applied for a can but didn't receive money Payment to account not credited Can't stop lender from chargmg my hank account Lender Hempen my hank accol int on wrung day or for wrong amount FIGURE 16 TYPES OF PAYDAY LOANS CONSUMERS COMPLAIN ABOUT Online 56% Not stated In person or at a store 30%, 14M Of the 4,400 payday loan complaints submitted by consumers, approximately 56% were about problems consumers reported experiencing after obtaining (or attempting to obtain) a payday loan online. Approximately 14% reported problems when obtaining a payday loan in person or at a store. For the remaining approximately 30% of complaints, the consumer did not indicate how the loan was obtained. 34 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 10. TYPES OF PAYDAY LOAN COMPLAINTS REPORTED BY CONSUMERS, BY TYPE OF LOAN Types of Payday Complaints In person / at the store Online Not stated Total Cannot contact lender 13% 44% 43% 31% Charged fees or interest I did not expect 14% 70% 17% 30% Received a loan I did not apply for 7% 41% 52% 14% Applied for a loan, but didn't receive money 11% 65% 24% 7% Payment to account not credited 29% 53% 18% 7% Can't stop lender from charging my bank account 21% 67% 12% 7% Lender charged my bank account on wrong day or for wrong amount 29% 61% 10% 4% The most common type of payday loan complaint received in 2016 is about problems with contacting the lender. Consumers also commonly complained about being charged unexpected fees or interest and receiving loans for which they did not apply. Table to illustrates the types of issues reported by consumers based on the reported source of the loan. The remaining complaints involved issues identified in zms that continued into 2016, such as payment issues surrounding check holding and electronic debit authorization that hands control of the consumer's bank account over to the lender. Some consumers complained that the payday lender re-presented a check several times, causing their account to incur multiple insufficient funds or overdraft fees. Consumer confusion relating to repayment terms was frequently expressed. These consumers complained of the lack of clarity about repayment of the loan using automatic withdrawal features on a bank card, on a prepaid card, or by direct deposit. Consumers with multiple advances stated their difficulty managing a short repayment period and more often rolled-over the loan, resulting in an inflated total cost of the loan. The cost and structure of a particular loan can make it difficult for consumers to repay. Consumers raised concerns such as the risk of being unable to repay the loan while still having 35 CONSUMER FINANCIAL PROTECTION BUREAU enough money left over for other expenses, the high cost of the loan, and aggressive debt collection practices in the case of delinquency or default. 3.10 Consumers' prepaid card complaints Figure 17 and Table ii show the types of prepaid card complaints reported by consumers for the approximately 2,500 prepaid card complaints the CFPB has handled. Approximately 1,300 (or 50%) of all prepaid complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (37%), found to be incomplete (8%), or are pending with the consumer or the CFPB 0% and 4%, respectively). FIGURE 17: TYPES OF PREPAID CARD COMPLAINTS REPORTED BY CONSUMERS 33 3/: Unauthorized Vansections or other transaction issues Managing open rig or closing yOUi account 290A Fraud or scam 22'n Fees Advertising marketing or disclosures Adding money Overdraft savings or rewards features 36 CONSUMER FINANCIAL PROTECTION BUREAU 2% TABLE 11: TYPES OF PREPAID CARD COMPLAINTS REPORTED BY CONSUMERS Types of prepaid card complaints Unauthorized transactions or other transaction issues 33% Managing, opening, or closing your account 29% Fraud or scam 22% Fees 7% Advertising, marketing, or disclosures 4% Adding money 4% Overdraft, savings or rewards features 2% Total Prepaid Card Complaints 100% The most common type of prepaid card complaint involved unauthorized transactions or other transaction issues. Another common type of complaint was about managing, opening, or closing a prepaid card account. Consumers complained that they were unable to access funds loaded on their prepaid cards for extended periods of time. Frequently, these consumers also expressed hardships resulting from the lack of access to their funds. Some consumers stated that after disputing a particular charge, the company would often freeze the entire available balance to prevent further loss while the claim was under review. During the review process, companies sometimes requested additional information—such as purchase receipts or original packaging—which the consumer often stated was no longer in their possession. Consumers reported difficulty using prepaid cards. Some of these consumers stated that their cards were cancelled without notification. Consumers stated that they had to contact the company numerous times before a new card was issued. Consumers who received a prepaid card as a refund complained that they were unable to activate the card, access the funds, or both. Subsequently, for some of these consumers, dormancy fees were assessed, depleting the card balance. 37 CONSUMER FINANCIAL PROTECTION BUREAU Consumers reported that companies sometimes issued cards without proper verification resulting in theft of their funds. These consumers stated they experienced prolonged investigations of their claims, leaving them without access to their money for extended periods of time. Consumers raised issues involving the management of prepaid card accounts. In some of these complaints, consumers reported balance discrepancies for cards, especially if they were unable to check their balance and transaction history online or were not provided with statements. Consumers also complained of delayed credits to their prepaid card after notifying the company of a fraudulent or unauthorized charge or after a purchase had been cancelled or returned. 3.11 Consumers' money transfer complaints Figures 18 and 19 and Table 12 show the types of money transfer complaints reported by consumers for the approximately 2,300 money transfer complaints the CFPB has handled. Approximately 1,60 0 (or 68%) of all money transfer complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (22%), found to be incomplete (7%), or are pending with the consumer or the CFPB (0.9% and 3%, respectively). FIGURE 18: TYPES OF MONEY TRANSFERS CONSUMERS COMPLAIN ABOUT noinostib HS) rnonpy transfor 57% International monpy Iransfer 43% FIGURE 19: TYPES OF MONEY TRANSFER COMPLAINTS REPORTED BY CONSUMERS Fraud or scam 36'/ 28% Other transaction issues Money was net available when promised Other serv ce issues Wrong amo_mt charged or received Incorrect or missing disclosures or info 38 CONSUMER FINANCIAL PROTECTION BUREAU 19% 9% TABLE 12: TYPES OF MONEY TRANSFER COMPLAINTS REPORTED BY CONSUMERS Types of money transfer complaints Fraud or scam 36% Other transaction issues (Unauthorized transaction, cancellation, refund, etc.) 28% Money was not available when promised 19% Other service issues 9% Wrong amount charged or received 4% Incorrect or missing disclosures or info 4% Total Money Transfer Complaints 100% The most common type of money transfer complaint is about fraud or scams. Many of these consumers complained that they sent money to a seller but did not receive the items they purchased in return. Other complaints involved consumers who frequently remit money to family members both domestically and internationally. A number of these consumers stated that they regularly used money transfers to provide for family members' basic living expenses. They often reported that the transfer recipients did not receive the money transfer, the amount received was smaller than expected, or the transfer encountered significant and unanticipated delays. Consumers attempting to complete transactions through an online money transfer service often reported encountering problems with the dispute resolution process. Sellers describe several scenarios where they did not receive payments after sending the item to the buyer. This often occurred when the seller was told that the payment had been accepted, but was later cancelled. Cancellation was done either by the buyer due to a dispute or by the financial institution because of insufficient funds in the buyer's account. Consumers reported that money transfer service providers placed holds on accounts without providing them with an explanation. Companies commonly reported that the hold was placed as a result of a risk-based model that will hold reserves on accounts in order to cover potential 39 CONSUMER FINANCIAL PROTECTION BUREAU losses arising from reversals or chargebacks Consumers who submitted complaints about international money transfers commonly reported delays and restrictions when attempting to make transfers. Many of these complaints are the product of company risk-based assessments, reviewed for compliance with United States regulations administered by the Office of Foreign Assets Control and consumer identification efforts. Consumers often complained that companies did not provide an adequate explanation of the process. 3.12 Other financial services complaints Figure zo and Table 13 show the types of other financial service complaints reported by consumers for the approximately 2,100 other financial services complaints the CFPB has handled. Approximately 500 (or 22%) of all other financial services complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (57%), found to be incomplete (13%), or are pending with the consumer or the CFPB (1% and 7%, respectively). FIGURE 20: TYPES OF OTHER FINANCIAL SERVICE COMPLAINTS REPORTED BY CONSUMERS 58% Fraud or Scam Customer service or customer relations 15% Unexpected or other Fees 7 to Fxcessive Fees 7 to 4 Advertising and marketing Disclosures [ astor stolen check Lost or stolen money order Incorrect exchange rate 40 3 to 2 1 'D 0 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 13: TYPES OF OTHER FINANCIAL SERVICE COMPLAINTS REPORTED BY CONSUMERS Types of other financial service complaints Fraud or Scam 58% Customer service/Customer relations 16% Unexpected/Other Fees 7% Excessive Fees 7% Advertising and marketing 4% Disclosures 3% Lost or stolen check 2% Lost or stolen money order 1% Incorrect exchange rate OM% Total other financial services 100% The majority of the other financial service complaints were about debt settlement, refund anticipation check, and credit repair. Some consumer complaints about debt settlement are related to debt collection and consumers' attempts to reduce their debt balance with their original creditor. Many of these complaints involved consumer reports of possible fraud or scams. Consumers reported making good faith payments to debt relief companies to pay off existing debt to creditors. Some of these consumers state that the payments were never forwarded to their creditors and they are now facing lawsuits for accounts they presumed were paid. Consumers who submitted check cashing complaints frequently mentioned the high costs. 'rhis was especially common for consumers who don't have a bank account at the institution where they were attempting to cash the check. A number of these consumers also complained about being unable to cash checks. In many instances, these checks were not cashed because of recommendations made by check authorization and warranty companies. Consumers also complained about difficulties redeeming money orders and about problems 41 CONSUMER FINANCIAL PROTECTION BUREAU encountered when money orders were lost. In many of these complaints, consumers expressed dissatisfaction with the error resolution processes available to them and the length of time required to resolve errors. Money order, traveler's check/cashier's check, and foreign check complaints frequently involved consumers who believed that they were victims of a scam. These complaints involved common scams, such as those that involve providing advance payment before goods are delivered or services are rendered. Scam victims may be unable to secure redress from their financial institutions. Consumers looking to repair their credit expressed concern of being scammed by credit repair companies after no relief was provided and requests for reimbursement went unacknowledged. 3.13 How companies respond to consumer complaints Approximately 196,900 (or 68%) of all complaints handled by the CFPB between January 1, 2016, and December 31, 2016, were sent by Consumer Response to companies for review and response:1 Table 14 shows how companies responded to these complaints during this time period. Company responses include descriptions of steps that have been or that will be taken, communications received from the consumer, any follow-up actions or planned follow-up actions, and a categorization of the response. Response category options include "Closed with monetary relief," "Closed with non-monetary relief," "Closed with explanation," "Closed," "In progress," and other administrative options. "Monetary relief' is defined as objective, measurable, and verifiable monetary relief to the consumer as a direct result of the steps that have been or that will be taken in response to the complaint. "Closed with non-monetary relief' 12 The remaining complaints have been referred to other regulatory agencies (21%), found to he incomplete (8%), or are pending with the consumer or the CHT (1% and 2%, respectively). 42 CONSUMER FINANCIAL PROTECTION BUREAU indicates that the steps taken by the company in response to the complaint did not result in monetary relief to the consumer that is objective, measurable, and verifiable, but may have addressed some or all of the consumer's complaint involving non-monetary requests. "Nonmonetary relief' is defined as other objective and verifiable relief to the consumer as a direct result of the steps that have been or that will be taken in response to the complaint. "Closed with explanation" indicates that the steps taken by the company in response to the complaint included an explanation that was tailored to the individual consumer's complaint. For example, this category would be used if the explanation substantively meets the consumer's desired resolution or explains why no further action will be taken. "Closed" indicates that the company closed the complaint without relief — monetary or non-monetary — or explanation. Consumers are given the option to review and provide feedback about all company closure responses. Companies have responded to approximately 94% of complaintso sent to them and report having closed 9o% of the complaints sent to them in 2016. Table 14 shows how companies have responded. 13 Companies have responded to approximately 185,900 of the 196,900 sent to them for response. 43 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 14 HOW COMPANIES HAVE RESPONDED TO CONSUMER COMPLAINTS Closed with monetary relief Closed Closed Closed Administwith non- with (without rative monetary explanation relief or response relief explanation) Company reviewing Company did not provide a timely response Debt collection <1°/0 12% 70% 3% 3% 4% 8% Credit reporting <1°/0 22% 70% <1% 3% 4% <1% Mortgage 3% 3% 82% 2% 3% 5% 2% Bank account or service 18% 8% 62% 2% 1% 5% 4% Credit card 20% 10% 63% <1% 2% 4% 1% Consumer loan 5% 7% 72% 2% 2% 5% 6% Student loan 3% 6% 85% <1% <1% 3% 2% Payday loan 3% 2% 66% 3% 14% 2% 10% Prepaid 21% 6% 64% 2% 2% 4% 1% Money transfer 9% 5% 76% 1% <1% 5% 3% Other financial service 10% 2% 63% 5 1% 6% 12% All 6% 11% 72% 2% 3% 4% 3% 44 CONSUMER FINANCIAL PROTECTION BUREAU Companies have the option to identify their responses to particular complaints as being "Closed with non-monetary relief' when they provide non-monetary relief in response to complaints. In such cases, consumers have received a range of non-monetary relief, such as: providing mortgage foreclosure alternatives that do not have direct monetary value to the consumer, but that help them keep their home; stopping harassment from debt collectors; cleaning up consumers' credit reports by correcting submissions to credit bureaus; restoring or removing a credit line from a credit file; • correcting account information, including in credit reports; and • addressing formerly unmet customer service issues. Companies also have the option to report an amount of monetary relief, where applicable. In 2016, companies provided relief amounts in response to 11,330 complaints. For companies which have reported monetary relief, the median amount of relief reported was $141; however, the amount varies by product, ranging from a median of $500 in relief for mortgage complaints to $29 in relief for credit reporting complaints. 45 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 15: MONETARY RELIEF REPORTED BY COMPANIES Product Number of complaints Median amount Debt collection 360 $316 Credit reporting 150 $29 Mortgage 1,190 $500 Bank account or service 4,060 $108 Credit card 4,250 $105 Consumer loan 530 $200 Student loan 250 $245 Payday loan 60 $375 Prepaid 270 $200 Money transfer 150 $205 Other financial service 50 $323 Overall 11,330 $141 3.14 Consumers' feedback about companies' responses Once the company responds, the CFPB provides the company's response to the consumer for review. Where the company responds "Closed with monetary relief," "Closed with non-monetary relief," "Closed with explanation," or "Closed," consumers are given the option to provide feedback on the company's response. Figure 21 shows how consumers responded to the approximately 176,800 complaints where they were given the option to provide feedback. Approximately 18% of consumers disputed the response provided by the company, while approximately 67% did not dispute the response during the feedback period. The rest were pending with consumers at the end of December 31, 2016. 46 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 21: CONSUMER FEEDBACK ABOUT COMPANY RESPONSES Debt collection 18% 15% Credit reporting Mortgage Bank account or service Credit card 21% 17% 21% Consumer loan 21% Student loan 20% Payday loan 14% Prepaid 16% Money transfer Other financial service All 16% 22% 18% Pending consumer review of companys reported resolution • Consumer disputed companys reported resolution Consumer did not dispute companys reported resolution 3.15 Consumer Response investigation and analysis Consumer Response analyzes consumer complaints, including the accuracy, completeness, and timeliness of a company's responses as well as consumers' feedback about that company's responses, to ensure that consumers receive timely responses to their complaints and that the Bureau and other regulators, consumers, and the marketplace have the complaint information needed to improve the functioning of the consumer financial markets for such products and services. Consumer Response uses a variety of approaches to analyze consumer complaints including, for example, cohort and text analytics to identify trends and possible consumer harm. 47 CONSUMER FINANCIAL PROTECTION BUREAU Complaint analysis may prompt investigation of individual complaints or groups of complaints and possible referral to colleagues in the CFPB's Division of Supervision, Enforcement, and Fair Lending & Equal Opportunity for further consideration. Consumer Response shares complaint data, analyzes, and offers insights to other offices to help the Bureau: • Understand problems consumers are experiencing in the marketplace and the impact of those experiences on their lives; Develop tools to empower people to know their rights and protect themselves; • Scope and prioritize examinations and ask targeted questions when examining companies' records and practices; Identify and stop unfair practices before they become major issues; and • Investigate issues and take action when we find problems. 3.16 Conclusion Listening to consumers and reviewing and analyzing their complaints is an integral part of the CFPB's work in understanding issues in the financial marketplace, and helping the market work better for consumers. The information shared by consumers and companies throughout the complaint process informs the Bureau about business practices that may pose risks to consumers and helps the Bureau in its work to supervise companies, to enforce Federal consumer financial laws, to write better rules and regulations, and to educate and engage consumers. 48 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 22: COMPLAINTS HANDLED FROM JULY 21, 2011, THROUGH DECEMBER 31, 2016 (BY STATE, AND THE DISTRICT OF COLUMBIA) Complaints 1,000 ME 150,000 3,516 WI VT NH 12,182 1,724 WA ID MT ND MN IL MI NY MA 21,902 3,988 1,927 1,076 12,238 38,140 27,204 69,138 19,611 4496 OR NV WY SD IA IN OH PA NJ CT RI 12,430 13,536 1,158 1,624 5,128 12,673 32,963 38,279 40,574 11,899 3,385 CA UT CO NE MO KY WV VA MD DE 140488 6,255 18,141 3491 1A841 8,592 3,045 33,606 32555 5,477 AZ NM KS AR TN NC SC DC 23,310 5,732 5,875 5,038 17,759 29,841 14,420 6,242 OK LA MS AL GA 8,029 11,999 5,784 12,050 44,315 49 HI AK FL 3,812 1409 104,285 CONSUMER FINANCIAL PROTECTION BUREAU March 2017 Consumer Response Annual Report January 1 — December 31, 2016 Consumer Financial Protection Burea LI Message from Richard Cordray Director of the CFPB The Consumer Financial Protection Bureau began consumer response operations on July 21, 2011, as the nation's first federal agency with the sole mission to protect American consumers in the financial marketplace. Our Office of Consumer Response has continued to improve and expand the CFPB's ability to engage consumers that face financial challenges and bring their concerns to the attention of companies. The CFPB accepts complaints about many financial products and services, including mortgages, credit "We had actually lost over $1,goo... For u very cards, auto loans, student loans, deposit accounts, frustrating month we tried everything to reach debt collection, credit reporting, payday loans, the company for an explanation and finally put consumer loans, and more. As of March 1, 20117, we in u complaint with CFPB. Within two weeks we have handled over 1,136,000 consumer complaints. received a response from the company and a check for the difference. We are so gratefill to Listening to consumers is key to our mission. By CFPB and this avenue for resolution. lam answering consumer questions and handling their positive without their intervention our case complaints, we learn about consumers' experiences in the consumer financial marketplace, about would never have been resolved." — Consumer from California company practices and behaviors, and about emerging trends in the marketplace. There is much to be learned from the questions consumers ask and the complaints consumers submit about the financial industry. From our earliest days of handling complaints, we have monitored and reported on the types of issues about which consumers complain. With a growing CONSUMER FINANCIAL PROTECTION BUREAU volume of consumer complaints, we now identify, categorize, analyze, and synthesize what they have told us. By closely analyzing complaint patterns, we are able to identify spikes in specific complaint types; emerging trends; issues with new and evolving products; and patterns across geographic areas, companies, and consumer demographics. These insights help us prioritize our own supervision and enforcement work and ask better and more targeted questions when examining a company's records. With the help of complaints, we dig deeply into potentially unfair practices so we can prevent minor issues from becoming major problems. We also use complaints to identify opportunities to educate and empower consumers about the marketplace and their rights and to understand what the rules of the road should be when we consider and undertake rulemaking. Through our public Consumer Complaint Database, launched by Consumer Response in June 2012, others can learn from consumers' complaints too. We have published more than 730,400 complaints that have been sent to companies for response. We do this not only to empower consumers and inform the public, but also so that companies can learn from the data and improve their OINT1 compliance and customer service operations. In June 2015, the Bureau started giving consumers the opportunity to share their descriptions of what happened, in their own words, so that others can read about, better understand, and learn from their experiences. Through the questions they ask us, the stories they tell us, and the complaints they submit, the voices of consumers remain foundational to the Bureau's work. Many companies are adapting to this focus to become more directly responsive to consumer concerns, and thus to improve their customer service. We continue to work to fulfill Congress's vision that we stand on the side of consumers to help improve their financial lives. Through their complaints, consumers help us make the marketplace a better and safer place. This is good for consumers, for the responsible businesses that seek to serve them, and for the American economy as a whole. Sincerely, Rawne Crag, Richard Cordray 2 CONSUMER FINANCIAL PROTECTION BUREAU Table of contents Message from Richard Cordray 1 Table of contents 3 1. Introduction 5 2. How the CFPB handles complaints 11 3. Results 14 3 3.1 Complaints handled in 2016 14 3.2 Consumers' debt collection complaints 15 3.3 Consumers' credit reporting complaints 18 3.4 Consumers' mortgage complaints 22 3.5 Consumers' bank account and service complaints 25 3.6 Consumers' credit card complaints 27 3.7 Consumers' consumer loan complaints 29 3.8 Consumers' student loan complaints 31 3.9 Consumers' payday loan complaints 33 3.10 Consumers' prepaid cards complaints 36 3.11 Consumers' money transfer complaints 38 3.12 Other financial services complaints 40 3.13 How companies respond to consumer complaints 42 CONSUMER FINANCIAL PROTECTION BUREAU 4 3.14 Consumers' feedback about companies' responses 46 3.15 Consumer Response investigation and analysis 47 3.16 Conclusion 48 CONSUMER FINANCIAL PROTECTION BUREAU 1. Introduction The CFPB is the first federal agency solely focused on consumer financial protection.' Collecting, investigating, and responding to consumer complaints2 are integral parts of the CFPB's work.3 The Bureau's Office of Consumer Response hears directly from consumers about the challenges they face in the marketplace, brings their concerns to the attention of companies, and assists in addressing their complaints. Consumer Response also answers consumers' questions about financial products and services and provides consumers with an opportunity to share their experiences — positive or negative — with consumer financial products and services through the "Tell Your Story" feature on the Bureau's website. These stories, like complaints and questions, are reviewed by CFPB staff to help the Bureau understand current issues in the financial marketplace. When the Bureau opened its doors on July 21, 2011, it began consumer response operations on the same day, answering consumers' questions and accepting consumer complaints about credit cards. Since then, the Bureau has expanded its complaint handling to include complaints about: mortgages, bank accounts and services, student loans, vehicle and other consumer loans, credit reporting, money transfers, virtual currency, debt collection, payday loans, prepaid cards, and other financial services. ' The Dodd-Frank Wall Street Reform and Consumer Protection Act of 201u, Pub. L. No. 111-203 ("Dodd-Frank Act") created the CFPB to protect consumers of financial products or services and to encourage the fair and competitive operation of consumer Financial markets. 2 Consumer complaints are submissions that express dissatisfaction with, or communicate suspicion of wrongful conduct by, an identifiable entity related to a consumer's personal experience with a financial product or service. 3 See Dodd-Frank Act, Pub. L. No. 111-2u3, Section 1o21(c)(2). 5 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 1: TYPES OF COMPLAINTS OVER TIME Credit Mortgages July 21 2011 Bank arrourgand sereces pcvate student 'earls, arid Credit consume loan. reporting • December 1, March 1 2011 2012 Money transfers 0 :ober 22, A ri 4, 2013 Prepaid gelds credit repair, debt senlemem d n c pawn and title cans Debt col ection Pmcm loans July 10 2012 November 6, J ly 19, 2012 2014 V rteal cumency Cede'al student loon Ma ke-place se-Acing lending A must 11 F brua y 25 Ma ch 204 2 16 201h Consumers also contact the CFPB about other products and services. The Bureau refers consumers with questions to other regulators or additional resources, as appropriate. The CFPB's phased-in approach to taking complaints enabled Consumer Response to gather and incorporate feedback from consumers and companies into each subsequent complaint capacity expansion. For example, Consumer Response has improved its complaint submission process and enhanced communication with companies. Leveraging feedback from consumers and companies, as well as its own observations, Consumer Response identifies new opportunities to improve its processes and implement changes to make the process efficient and effective for consumers and companies. Since beginning to accept complaints on July 21, 2011, the CFPB has handled approximately 1,136,000 consumer complaints as of March 1,2017. 6 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 2: COMPLAINTS OVER TIME 30K a e." 20K C (73 a r 3 u ee, 10K ct) se E j OK 2011 2012 2013 2014 2015 2016 2017 Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan FIGURE 3: COMPLAINT VOLUME BY PRODUCT 2015 AND 2016 Debt collection 3rob, 2016 88 000 85.200 2015 Credit reporting 19% 2016 2044 2015 Mortgage Prepaid Money transfer Other financial services 22 400 9% 2016 26 600 80 6% 2016 54 4•/ 2016 22 200 16 400 13 500 12 300 7 300 2015 Payday loan 28 400 80 2015 Student loans 5C 800 10Th 2016 2015 Consumer loan 51 200 19% 2015 Credit card 55 000 18% 2016 2015 Bank aecobrit or serv ces 54 000 2016 2% 4A00 2015 2% S500 2016 0 94 , 2.500 2015 1% 3000 2016 0 84, 2.300 2015 0 94 , 2.400 2016 0 Th, 2.100 2015 0 7°, , 1 930 Percent of annual comp a ints CONSUMER FINANCIAL PROTECTION BUREAU NLJfllber of complaints Year over year, complaint volume has steadily increased, rising 7% from 271,600 in 2015 to 291,400 in 2016. Information about consumer complaints is available to the public, through the CFPB's public Convont Cr Coin pl nint Da th lvo so, launched on June 19, 2012.4 Complaints are added to the database after the company responds to the complaint, confirming a commercial relationship with the consumer, or after the company has had the complaint for 15 calendar days, whichever comes first. Complaints are not published if they do not meet all of the publication criteria.5 The public database was initially populated with credit card complaints and has been expanded over time: June 2012: populated with credit card complaints dating back to June 1, 2012; • October 2012: added credit card complaints dating back to December!, 2011; • March 2013: added mortgage complaints dating back to December 1, 2011; bank account and service complaints, student loan complaints, and other consumer loan complaints, all dating back to March 1, 2012; • May 2013: added credit reporting complaints dating back to October 22, 2012 and money transfer complaints dating back to April 4, 2013; • November 2013: added debt collection complaints dating back to July 10, 2013; July 2014: added payday loan complaints dating back to November 6, 2013; January 2015: added complaints about prepaid cards, other consumer loans (pawn and title loans), and other financial services dating back to July 19, 2014; • June 2015: added consumer complaint narratives and optional company public In December 2011, the MB asked the public to comment on a proposed policy of making some credit card complaint data publicly available. After considering those comments, the CHB finalized its policy for disclosing some of the data through its Consumer Complaint Database (Policy Statement). See Disclosure of Certain Credit Card Complaint Data, 77 Fed. Reg. 37,558 (June 22, 2012). 5 See Disclosure of Consumer Complaint Narrative Data, 8v) Fed. Reg, 15572 (March 24, 2015). 4 8 CONSUMER FINANCIAL PROTECTION BUREAU responses; February 2016: added tags to identify complaints submitted by older Americans and senicemembers and a field indicating whether the consumer consented to publication of their complaint narrative; and September 2016: added complaints about federal student loan servicing dating back to February 25, 2016, and virtual currency complaints dating back to August 11, 2014. The database contains certain individual complaint-level data collected by the CFPB, including the type of complaint, the date of submission, the consumer's zip code, and the company about which the consumer submitted the complaint. The database also includes information about the actions taken by a company in response to a complaint — whether the company's response was timely, how the company responded, and whether the consumer disputed the company's response. The database does not include confidential information about consumers' identities. On June 25, 2015, the CFPB began to publish consumer complaint narratives in the Consumer Complaint Database. Consumers now have the opportunity to share — in their own words — their experiences with the consumer financial marketplace. Only those narratives for which opt-in consumer consent is obtained and to which a robust personal information scrubbing process is applied are eligible for disclosure. The database now includes more than 130,000 complaints where consumers have opted to share their complaint narrative with others. The CFPB gives companies the option to respond publicly to the substance of the consumer complaints they receive from the CFPB by selecting from a set list of public-facing response categories. Web-based and user-friendly features of the database include the ability to filter data based on specific search criteria or tags, to aggregate data in various ways, such as by complaint type, company, state, date, or any combination of available variables, and to download data. Information from the database has been shared and evaluated on social media and using other new applications. 9 CONSUMER FINANCIAL PROTECTION BUREAU Consumer Complaint Database Each muck we send thOUb0 ltib of cm sumo's comaloints about nancial products and sera cos to companies for response These complaints are atrh idled hen otter the company responds or alter 15 days which ever corneal! sa By adding the, voice consumers nelp mprove tne finarc al marketplace Ylvalr earamatealtiate Shad 01•1•111/ MOAN. WWW 001111140011q0.1••• ald All consumerfinance gpvicom )11intdltab•ise Consumer Response continually strives to improve data quality and protect sensitive information, while increasingly making data available through reports about the complaints the CFPB handles and by sharing certain data with the public through the Consumer Complaint Database. In keeping with the CFPB's statutory responsibility and its commitment to accountability, this report provides an overview of the handling and analysis of complaints by the Bureau from January 1 through December 31, 2016.6 6 This report addresses the reporting requirements of Dodd-Frank Act Section 1u13(b)(3)(c), 12 U.S.C. § 5493(b)(3)(e) and Fair Credit Reporting Act Section 611(e), In U.S.C. §168ti(e). 10 CONSUMER FINANCIAL PROTECTION BUREAU 2. How the CFPB handles complaints Consumer Response receives complaints and questions directly from consumers. The CFPB accepts complaints th ough its website and by telephone, mail, email, fax, and referral. In addition to submittin complaints on the Bureau's website, consumers can also log on to a secure consumer port Ito check the status of a complaint and review a company's response. While on the website, consumers can chat with a live agent to get help completing a complaint form. Consumers can also call the Bureau's toll-free number to ask questions, submit a complaint, check the status of a complaint, and more. The CFPB's U.S.-based contact centers provide services to consumers in more than i8o languages and to consumers who are deaf, have hearing loss, or have speech disabilities via a toll-free telephone number. Cutting-edge technology, including secure company and consumer portals, makes the process efficient and user-friendly for consumers and companies. For companies, the CFPB provides secure channels for communicating directly with dedicated staff about technical issues. The CFPB continually strives to collect reliable complaint data while ensuring the system's ease of-use and effectiveness for consumers. When consumers submit complaints, they select the consumer financial product or service as well as the issue they are having with that product or service from a list. This provides structured data that can be used to group complaints to get a sense of which financial products and services consumers complain about and what issues they are having in the marketplace. 11 CONSUMER FINANCIAL PROTECTION BUREAU Complaints are sent via a secure web portal to the appropriate company: The company reviews the information, communicates with the consumer as needed, and determines what action to take in response. The company then reports back to the consumer and the CFPB via the secure company portal, and the Bureau invites the consumer to review the response and provide feedback. Consumers who have submitted complaints with the Bureau can log onto the secure consumer portal available on the CFPB's website or call a toll-free number to receive status updates, provide additional information, and review responses provided to the consumer by the company. IC Compl i t submit-I d Review and route Company response Complaint published Consumer review Analyze and report The process seeks to ensure that consumers receive timely responses to their complaints and that the Bureau, other regulators, consumers, and the marketplace have the complaint information needed to improve the functioning of the consumer financial markets for such products and services. We also collect unstructured data from consumers and companies during the complaint process. The consumer's narrative description of what happened, consumer-provided documents, the company's response, and company-provided documents are examples of unstructured data. The Bureau uses a variety of approaches to analyze consumer complaints including, for example, cohort and text analytics to identify trends and possible consumer harm. Our review and 7 In some cases, Consumer Response refers or sends a complaint to another regulator, for example, if a particular complaint does not involve a product or market that is within the Bureau's jurisdiction or one that is not currently being handled by the Bureau, or in cases where the company is not yet registered to respond to complaints in our system. Complaints handled by the Bureau, including those sent to other regulators, serve to inform the Bureau in its work to supervise companies, to enforce consumer financial laws, to write better rules and regulations, and to educate and engage consumers. 12 CONSUMER FINANCIAL PROTECTION BUREAU analysis of unstructured data offers deeper insights into consumers' complaints and helps the Bureau understand problems consumers are experiencing with consumer financial products and services. Throughout this process, subject matter experts help monitor certain complaints. For example, the Office of Servicemember Affairs coordinates with Consumer Response on complaints submitted by or on behalf of a servicemember or the spouse or dependent of a servicemember. For these purposes, a servicemember includes anyone who self-identifies as active duty, National Guard, or Reservist, as well as those who previously served and identify as a Veteran or retiree. 13 CONSUMER FINANCIAL PROTECTION BUREAU 3. Results 3.1 Complaints handled in 2016 Between January 1, 2016 and December 31, 2016, the CFPB handled approximately 291,400 consumer complaints.8 FIGURE 4: CONSUMER COMPLAINTS BY PRODUCTS 3m/5 Debt collection 19% Credr rounding 18% Mortgage 1C'h. Bank account or service 9% Cred card Consumer loan Student loan Payday loan 2% Prepaid 0 9i7, More/ transfer Other financial serv ce O.8 0 7°, Approximately 73% of all consumer complaints were submitted through the CFPB's website and This analysis excludes multiple complaints submitted by a given consumer on the same issue (i.e., duplicates) and whistleblower tips. All data are current as ofJanuary 1, 2017. 9 Percentages may not sum to hid percent due to rounding. 8 14 CONSUMER FINANCIAL PROTECTION BUREAU 7% via telephone calls. Referrals accounted for 12% of all complaints handled by the CFPB. The rest were submitted by mail, email, and fax. The tables and figures presented below show complaints by type, actions taken, company responses, and consumers' feedback about company responses.rn 3.2 Consumers' debt collection complaints Figures 5 and 6 and Table 1 show the types of debt collection complaints reported by consumers for the approximately 88,000 debt collection complaints the CFPB has handled. Approximately 41,400 (or 47%) of all debt collection complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (38%), found to be incomplete (i0%), or are pending with the CFPB or the consumer (4% and 1%, respectively). These complaints include first-party (creditors collecting on their own debts) and third-party collections. FIGURE 5: TYPES OF DEBT CONSUMERS COMPLAIN ABOUT 331/ Other 21,A I do not know 17% Medical Cred card 13% Payday loan Mortgage Auto Federal student loan Non-federal student loan Debt collection complaints led both the daily and monthly volume of complaints handled by the CFPB in 2016. The issues that consumers selected in 2016 were similar to the issues they selected in 2015. ni Percentages may not sum to Loo percent due to rounding. 15 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 6: TYPES OF DEBT COLLECTION COMPLAINTS REPORTED BY CONSUMERS 41%, Continued attempts to collect debt not owed Disclosure verification of debt 20'n Communication tactics 15% False statements or representation Taking or threatening an illegal action Improper contact or sharing of info 6% TABLE 1: TYPES OF DEBT COLLECTION COMPLAINTS REPORTED BY CONSUMERS Types of debt collection complaints Continued attempts to collect debt not owed (Debt was discharged in bankruptcy, debt resulted from identity theft, debt was paid, debt is not mine) Disclosure/verification of debt (Did not receive notice of right to dispute, not enough information to verify debt, did not disclose communication was an attempt to collect a debt) 41% 20% Communication tactics (Frequent or repeated calls, called outside of 8am-9pm, used obscene, profane or other abusive language, threatened to take legal action, called after sent written 15% cease of communication notice) False statements or representation (Attempted to collect wrong amount, impersonated attorney, law enforcement or government official, indicated committing crime by not paying 9% debt, indicated should not respond to lawsuit) Taking/threatening an illegal action (Threatened to arrest me or take me to jail if I do not pay, threatened to sue neon debt that is too old to be sued on, sued me without properly notifying me of lawsuit, sued me where I did not live or did not sign for the debt, attempted to/collected 9% exempt funds, seized or attempted to seize property) Improper contact or sharing of information (Contacted me after I asked not to, contacted my employer, contacted me instead of my attorney, talked to a third party about my debt) Total Debt Collection Complaints 6% 100% Many of the trends identified in ang continued into zoth. The most common type of debt collection complaint is about continued attempts to collect a debt that the consumer reports is not owed. In some of these complaints, consumers reported not being provided documentation to verify the debt, even after written, timely requests were submitted for verification of the purported debts. 16 CONSUMER FINANCIAL PROTECTION BUREAU In other complaints, consumers complained that first-party collectors (creditors collecting on their own debts) forwarded their accounts to third-party collectors for a debt that was not owed. Upon dispute with the third-party collector, consumers reported that the debt was sent back to the first-party, only to be later sent to a new third-party collector. Some consumers reported that collectors place the onus of proving that the debt is not owed on consumers throughout this cycle. Consumers reported their accounts were forwarded to third-party collectors without any prior contact from the first-party collectors of an outstanding balance. Some complained that accounts had been negatively reported to credit reporting companies even after communicating with the first- and third-parties that the debt was not owed. Consumers also reported that their accounts were not in a delinquent status prior to contact by third-party collectors. Communication tactics used by debt collectors was a common issue raised by consumers. Many of these consumers reported that they received multiple calls weekly or even daily. According to many consumers, requests to cease communications were not honored. For both first- and third-party collectors, consumers reported continued communications following an oral or written request to cease communications. Consumers continued to report that frequent or repeated calls are a commonly used collection tactic. In many complaints, consumers described collection calls to their place of employment even after having informed collectors that contact at work was prohibited by their employers. Some consumers reported that collectors made in-person visits to their workplace. In 2016, there was a slight increase in the number of consumers who complained about debt collectors who talked to a third party about their debt. Some of these consumers described how their debt was disclosed to a supervisor or other third-party. Consumers submitting medical debt collection complaints increased slightly in 2016. In the submission of complaints where "medical" was identified as the type of debt, consumers selected "debt was paid" and "debt was not mine" as their primary issue in the majority of the complaints. Frequently, consumers stated that third-party debt collectors attempted to collect medical debt with incorrect balances. in many of these complaints, consumers reported that they were not given enough information to verify a debt. Some consumers reported they had secured a payment plan with the original party; however, the account was forwarded to collection agencies without regard to prior approved payment plans. Other complaints involved consumers' insistence that the amount due was erroneous as they believed the amount pursued 17 CONSUMER FINANCIAL PROTECTION BUREAU by collectors was for expenses covered by their medical insurance. 3.3 Consumers' credit reporting complaints Figure 7 and Table 2 show the types of credit reporting complaints, as reported by consumers for the approximately 54,000 credit reporting complaints handled by the CFPB. This includes approximately 44,000 (81%) about the three largest nationwide credit reporting companies — Equifax, Experian, and TransUnion. Approximately 45,300 (or 84%) of all credit reporting complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (0.3%), found to be incomplete (14%), or are pending with the consumer or the CFPB (2% and 0.3%, respectively). FIGURE 7: TYPES OF CREDIT REPORTING COMPLAINTS REPORTED BY CONSUMERS Incorrect rricorri a•ron on credit report Credit report' rig company's inve6trgation 74% 11% Improper Jse of credit report Unable to obtain report or score Credit monitoring or identity protection 18 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 2: TYPES OF CREDIT REPORTING COMPLAINTS REPORTED BY CONSUMERS Types of credit reporting complaints Incorrect information on credit report (Information is not mine, Account terms, Account status, Personal information, Public record, Reinserted previously deleted information) 74% Credit reporting company's investigation (Investigation took too long, Did not get proper notice of investigation status or results, Did not receive adequate help over the phone, Problem with statement of dispute) 11% Improper use of my credit report (Report improperly shared by credit reporting company, Received marketing offers after opting out, Report provided to employer without written authorization) 6% Unable to gel my credit report or credit score (Problem gelling free annual report, Problem gelling report or credit score) 6% Credit monitoring or identity protection services (Problem cancelling or closing account, Billing dispute, Receiving unwanted marketing or advertising, Account or product terms and changes, Problem with fraud alerts) 3% Total Credit Reporting Complaints 100% The most common type of credit reporting complaint continues to be about information the consumer believes to be incorrect appearing on the consumer's credit report, such as information that does not belong to the consumer, incorrect account status, and incorrect personal information. These complaints frequently involve debt collection items. In some cases, consumers report having paid the debt appearing on their report. In other complaints, consumers assert the debt is no longer due because the debt is too old to be enforced in court. These complaints may reflect confusion about the fact that information on past overdue debt— even when paid or no longer enforceable because of limitations—often can remain on a credit report. Other complaints state that the debt belongs to a different consumer, or consumers state that they do not recognize the debt. Delays in updating inaccurate records, problems correcting inaccurate records, and public records being incorrectly matched to their credit reports continue to be frequent issues cited by consumers. 19 CONSUMER FINANCIAL PROTECTION BUREAU Consumers continued to report having trouble accessing their credit reports because they cannot answer detailed identity authentication questions. If denied access to their report because they failed online authentication, the option available is to mail copies of sensitive, identifying documents, which consumers note is time-consuming and worry is potentially unsecure. The three national credit reporting companies reported providing relief — monetary or nonmonetary — in response to approximately 23% of incorrect information complaints and complaints about the credit reporting companies' investigations sent to them for response. Providing relief to consumers varies by company with Experian providing relief in response to approximately 41% of complaints, Transunion providing relief in response to approximately 25% of complaints, and Equifax providing relief in response to approximately 5% of complaints. In addition to complaints about the three nationwide credit reporting companies—Equifax, Experian, Transunion—consumers submitted numerous complaints about specialty and other consumer reporting companies. These companies specialize in providing reports in a number of areas, including background and employment screening, checking account screening, rental screening, and insurance screening. Difficulty resolving inaccuracies is a major concern for consumers submitting complaints about specialty consumer reporting companies. These consumers report long delays, negative customer service experiences, and failed attempts to have inaccurate negative information removed. Tables 3 and 4 take a closer look at the two largest issue categories chosen by consumers that show the extent to which the sub-issues that consumers choose when submitting complaints about inaccurate information on their credit reports and credit reporting companies' investigations are similar at the three nationwide credit reporting companies. 20 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 3: SUB-ISSUES OF INCORRECT INFORMATION IN CREDIT REPORTING COMPLAINTS Sub-issue for incorrect information in credit report complaints Equifax Experian TransUnion National credit reporting companies Information is not mine (Belongs to someone else, identity theft, fraud, etc.) 35% 38% 32% 35% 30% 32% 27% 30% 10% 11% 11% 11% 11% 7% 8% 9% Personal information (Wrong date of birth, address, etc.) 8% 8% 8% 8% Reinserted previously deleted information 6% 4% 15% 8% Total Incorrect Information in Credit Report Complaints 100% 100% 100% 100% Account status (Paid bill on time, account closed, etc.) Account terms (Creditor name/info, balance, payment, etc.) Public record (Bankruptcy, judgment, etc.) TABLE 4 SUB-ISSUES OF CREDIT REPORTING COMPANY'S INVESTIGATION COMPLAINTS National credit reporting companies Sub-issue for credit reporting company's investigation complaints Equifax Experian TransUnion No notice of investigation status or result 36% 44% 41% 40% Problem with statement of dispute 32% 30% 28% 30% Investigation took too long 23% 17% 19% 20% Inadequate help over the phone 10% 10% 12% 10% Total Credit Reporting Company's Investigation Complaints 100% 100% 100% 100% 21 CONSUMER FINANCIAL PROTECTION BUREAU 3.4 Consumers' mortgage complaints Figures 8 and 9 and Table 5 show the types of mortgage complaints reported by consumers for the approximately 51,200 mortgage complaints the CFPB has handled. Approximately 43,000 (or 84%) of all mortgage complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (11%), found to be incomplete (3%), or are pending with the consumer or the CFPB (0.4% and 1%, respectively). FIGURE 8: TYPES OF MORTGAGE PRODUCTS CONSUMERS COMPLAIN ABOUT 351/ Other Conventional fixed mortgage 13% FHA mortgage 10% Conventional adjUstable mortgage , ARM) Home eqLity loan or line of credit VA mortgage 3% Reverse mortgage For mortgage complaints, as with all other complaints, the consumer selects the issue that best describes the problem they are having. These issues correspond to the part of the mortgage process with which they are having a problem. Reflecting the complexity and interrelated nature of mortgages and mortgage issues, consumers are not asked to provide further specificity by selecting a sub-issue. This ensures the reliability of mortgage complaint data that we collect from consumers and share in reports and through the Consumer Complaint Database. FIGURE 9: TYPES OF MORTGAGE COMPLAINTS REPORTED BY CONSUMERS 40% Making payments Problems when unable to pay Applying for the loan 38% 10% Signing the agreement Receiving a credit offer Other 22 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 5. TYPES OF MORTGAGE COMPLAINTS REPORTED BY CONSUMERS Types of mortgage complaints Making payments (Loan servicing, payments, escrow accounts) 40% Problems when you are unable to pay (Loan modification, collection, foreclosure) 38% Applying for the loan (Application, originator, mortgage broker) 10% Signing the agreement (Settlement process and costs) 6% Receiving a credit offer (Credit decision/Underwriting) 3% Other 3% Total Mortgage Complaints 100% Complaint submissions increased in 2016 for consumers who reported the issue of "making payments (loan servicing, payments, escrow accounts)." Consumers complaining about the servicing transfer of their loan account voiced concerns of mismanagement of payments when made to either the prior or current servicer on or around the effective date of transfer. Many of these consumers reported that payment was not credited to their account. Some consumers reported post service transfer issues involving their escrow account resulted in an increase to their monthly payment with no clear explanation provided by their servicers. Additionally, consumers who reported being involved in the loss mitigation assistance process at the time of the loan servicing transfer complained that documentation (e.g., applications, modification approvals) was not provided to the new servicer. Some consumers reported missing loan payments, resulting in delinquent account statuses and negative reporting of the account to credit reporting companies. A number of consumers complained of payment issues involving monthly payments made via bill pay services with their financial institutions. These consumers reported that payments were electronically transmitted to their servicers, but not credited to their loan account. Consumers who were approved for loss mitigation options—for example, a trial period plan, forbearance agreement, or loan 23 CONSUMER FINANCIAL PROTECTION BUREAU modification—reported that their payments were not accepted or applied as intended. In managing escrow accounts, instances of over-collection, unexplained shortages, and untimely tax and insurance disbursements are all common issues that consumers reported. Consumers complained that the escrow discrepancies led to erroneous increases to their mortgage installment amount. Consumers reported that after paying an identified shortage disclosed in their escrow analysis statement, funds were not applied accurately and resulted in an increase in their monthly payment. Other complaints involved issues regarding the disbursement of funds from escrow accounts to pay for collections. Some consumers reported that despite having an escrow account for insurance, their servicer failed to submit timely payment to their homeowner's insurance company, which ultimately left their property without adequate coverage. The next most complained about issue involved problems consumers report when they are unable to pay, loan modification, collection, and foreclosure. In particular, complaints involving the loss mitigation assistance process often detailed repeated requests by servicers for submission of the same documentation and lack of responsiveness from the consumers' single point of contact. Some consumers reported receiving conflicting and confusing foreclosure notifications while undergoing loss mitigation assistance review. Many consumers complained about the denial of their modification applications, while others stated that the terms of the modification offered to them were unaffordable. Communication issues were reported by consumers as attempts to contact their servicers were met with difficulty and often resulted in confusing and contradictory information. Consumers seeking to obtain clarification regarding loan account reinstatement amounts, charges and fees, or interest rate increases stated they were provided ambiguous information. Some consumers described their experience as frustrating and asserted that the low level of customer service attributed to the delay in account resolution. Consumers reported that after having experienced property damage, they filed insurance claims, received their claims benefit checks, and forwarded those checks to their servicers. However, these consumers stated that servicers delayed releasing funds needed to make necessary repairs to their homes despite having provided all required documentation. Consumer complaints about mortgage originations often involved reports of prolonged and 24 CONSUMER FINANCIAL PROTECTION BUREAU confusing application and approval processes. Some consumers described unresponsive loan representatives and stated that they were required to submit multiple loan applications. A number of consumers reported that processing delays resulted in the loss of favorable interest rates and expiration of rate locks. 3.5 Consumers' bank account and service complaints Figures 10 and 11 and Table 6 show the types of bank account and service complaints, such as complaints about checking and savings accounts, as reported by consumers for the approximately 28,400 complaints handled by the CFPB. Approximately 22,200 (or 78%) of all bank account or service complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (16%), found to be incomplete (4%), or are pending with the consumer or the CFPB (0.5% and 1%, respectively). FIGURE 10 TYPES OF BANK ACCOUNTS AND SERVICES CONSUMERS COMPLAIN ABOUT 58'f Checking account 33'/ Other bank product/service Savings account (CD) Cerificate of deposit 3% Cashing a check without an account 0 n, FIGURE 11: TYPES OF BANK ACCOUNT AND SERVICE COMPLAINTS REPORTED BY CONSUMERS 46% Account management 24,A Deposits and withdrawals Sending or receiving payments 11% Problems nn Used by low kinds Using a debit or ATM card 25 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 6: TYPES OF BANK ACCOUNT AND SERVICE COMPLAINTS REPORTED BY CONSUMERS Types of bank account and service complaints Account opening, closing, or management (Confusing marketing, denial, disclosure, fees, closure, interest, statements, joint accounts) 46% Deposits and withdrawals (Availability of deposits, withdrawal problems and penalties, unauthorized transactions, check cashing, payroll deposit problems, lost or missing funds, transaction holds) 24% Making or receiving payments (Problems with payments by check, card, phone or online, unauthorized or fraudulent transactions, money/wire transfers) 11% Problems caused by my funds being low (Overdraft fees, late fees, bounced checks, credit reporting) Using a debit or ATM card (Disputed transaction, unauthorized card use, ATM or debit card fees, ATM problems) Total Bank Account and Service Complaints 9% 9% 100% Consumers submit complaints about accounts or services offered by banks, credit unions and nonbank companies under the general category of "bank accounts or services." The most common type of bank account and service complaint continues to relate to opening, closing, or managing the account. Consumer complaints about the use of consumer and credit reporting data for account screening are also common. Consumers frequently mentioned learning of a furnisher's past negative reporting to both specialty reporting companies and national credit reporting companies when they attempted to open a new bank account. Consumers also expressed that they have difficulty addressing potential errors on their reports. Promotional offers for opening new accounts were the focus of a number of complaints, including offers for airline miles and promotional cash. Some of these complaints involved the consumer's eligibility for the promotional offer—for example, when a consumer applies for an offer that they were not eligible for. Other complaints involved disputes over whether the consumer had met the required terms for a promotional offer. Complaints related to overdrafts remain common, including complaints about transaction 26 CONSUMER FINANCIAL PROTECTION BUREAU ordering. Consumers complained about overdrafts that took place because of confusion over the availability of funds that they were attempting to deposit. Consumers also regularly complained about the size of overdraft fees when making small dollar purchases. Other fees, including insufficient fund fees, extended overdraft fees and monthly maintenance fees were also frequently the subject of complaints. The availability of funds deposited via check or through direct deposit is a concern for consumers. Consumers expressed frustration with bank check holding policies and by the length of time it takes for various negotiable instruments to clear and become available. A number of these complaints involved mobile deposit applications and problems that consumers encountered when using them—including institutions having different funds availability policies for mobile deposits. Consumers also frequently complained about error resolution procedures for their deposit accounts, including timelines for investigation and provisional credit for disputed transactions. Consumers often asserted that a specific transaction was not authorized or that they were victims of fraud or identity theft. The meaning of authorization in the context of error resolution appears to cause confusion for some consumers as they attempted to dispute transactions because they were dissatisfied with the products or services that they purchased. A number of consumers have submitted complaints related to the probate process. These consumers frequently mentioned difficulty getting information about and access to their deceased relatives' accounts. These complaints often involved different types of accounts, including savings accounts, certificates of deposit, trust accounts, and retirement accounts. 3.6 Consumers' credit card complaints Table 7 shows the most common types of credit card complaints that the CFPB has handled as reported by consumers. Seventy three percent of the approximately 26,600 credit card complaints fell into these ten categories. Approximately 21,400 (or 81%) of all credit card complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatmy agencies (14%), found to be incomplete (3%), or are pending with the consumer or the CFPB (04% and 1%, respectively). 27 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 7: MOST COMMON CREDIT CARD COMPLAINTS REPORTED BY CONSUMERS Most common credit card complaints Billing disputes 17% Other 13% Identity theft / Fraud! Embezzlement 12% Closing! Cancelling account 7% Customer service / Customer relations 4% Delinquent account 4% APR or interest rate 4% Rewards 4% Advertising and marketing 4% Late fee 3% Credit Card Complaints in Top 10 Types 73% Billing disputes continue to be the most common type of credit card complaint. Consumers complained about the application of payments to their accounts with multiple balances and different expiration periods that resulted from balance transfers, cash advances, or deferred interest purchases. These consumers expressed that they were inadequately informed of how their payments would be applied and were surprised that payments were not applied to promotional or deferred interest balances with limited terms. Some consumers also thought that no interest charges would be incurred during the deferral period regardless of whether the debt is paid in full. Some consumers who received insurance products (e.g., phone or travel insurance), warranty extensions and guaranties, improved return policies, price protection services, and other similar benefits through their card programs complained about difficulties they reported experiencing while attempting to take advantage of these benefits. Credit decisions, including initial application decisions and servicing changes (e.g., interest rate 28 CONSUMER FINANCIAL PROTECTION BUREAU adjustments, credit limit reductions), were frequently the subject of complaints. Consumers complained of difficulty understanding determinations made by credit card companies and the reasons stated on letters explaining the decisions. These consumers also expressed concern about existing terms on their credit report that they felt did not reflect their creditworthiness. Other consumers expressed a belief that prejudice or bias may have impacted those credit decisions. Consumers continued to submit complaints regarding the closure of their account without their knowledge or consent. In response to these complaints, companies often replied that the consumer's account was closed because of default or suspected fraud. Also, consumers expressed a concern about the potential negative effect on their credit score when accounts were closed due to inactivity. Some of these consumers stated that they would have used the cards in question if they had been notified of the impending closure. Misleading offers for rewards program was a topic of concern for many consumers. These consumers complained of difficulty when attempting to receive promised benefits and felt that the terms and conditions of the programs were not clearly explained when they opened the card. Complaints about bonus points or miles programs, cash back programs, and travel benefits programs were especially common in these complaints. Consumers expressed frustration with various fees and additional costs associated with their credit cards. For example, although consumers appear to understand why late fees are assessed to their accounts, many felt that the fees should not be applied when an automatic payment failed or when a billing statement did not arrive in a timely manner. 3.7 Consumers' consumer loan complaints Figures 12 and 13 and Table 8 show the types of consumer loan complaints, such as complaints about installment loans, vehicle loans and leases, personal lines of credit, and pawn and title loans reported by consumers for the approximately 16,400 consumer loan complaints handled by the CFPB. Approximately 9,800 (or 6o%) of all consumer loan complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (28%), found to be incomplete (7%), or are pending with the consumer or the CFPB (i% and 4%, respectively). 29 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 12: TYPES OF CONSUMER LOANS CONSUMERS COMPLAIN ABOUT 48% Vehicle loan Installment loan 371/ Vehicle lease 8% Personal line of credit Title loan 2,/,, Pawn loan 0 5$, FIGURE 13: TYPES OF CONSUMER LOAN COMPLAINTS REPORTED BY CONSUMERS 450/0 Managing he loan lease or line of credit 228s Problems when you are unable to pay 18% Taking out loan or lease or account terms and changes Shopping for a loan lease or line o' credit 12M Other 2% Charged fees or interest I didn't expect 1'0 TABLE 8 TYPES OF CONSUMER LOAN COMPLAINTS REPORTED BY CONSUMERS Types of consumer loan complaints To Managing the loan, lease, or line of credit (Billing, late fees, damage or loss, insurance (GAP, credit, etc.), credit reporting, privacy) 45% Problems when you are unable to pay (Debt collection, repossession, set-off from bank account deficiency, bankruptcy, default) 22% Taking out the loan or lease! Account terms and changes (Term changes (mid-deal changes, changes after closing, rates, fees, etc.), required add-on products, trade-in payoff, fraud) Shopping for a loan, lease, or line of credit (Sales tactics or pressure, credit denial, confusing advertising or marketing) 18% 12% Other 2% Charged fees or interest I didn't expect 1%0 Total Consumer Loan Complaints 100% 30 CONSUMER FINANCIAL PROTECTION BUREAU The table illustrates that the most common type of consumer loan complaint pertains to managing the loan, lease, or line of credit. Other common types of complaints address problems consumers have when they are unable to pay—including issues related to debt collection, bankruptcy, default, and problems when taking out the loan or lease, such as term changes. Consumers continued to complain that they experienced a "bait and switch" where the lenders offers favorable terms to attract their interest in a product and then changes those terms right before the contract is consummated. This behavior was described as confusing and often led to consumers paying much more for a loan than they were initially told. In 2016, consumer loan complaints with the sub-product of vehicle loan were submitted more frequently than other sub-products. In these complaints, consumers complained about payment processing issues, including not having their payments applied to their accounts in a timely and correct manner. Consumers also complained of inaccurate debiting of their bank accounts for monthly payments. Some consumers complained that they did not understand why their account balances were not decreasing after making a larger number of monthly payments. These consumers indicated that they did not fully understand the effects of fees and high interest rates on the total cost of their loans. 3.8 Consumers' student loan complaints Figure 14 and Table 9 show the types of student loan complaints as reported by consumers for the approximately 12,300 student loan complaints handled by the CFPB11. Approximately 8,300 (or 68%) of all student loan complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (17%), found to be incomplete (12%), or are pending with the consumer or the CFPB (2% and 2%, respectively). "The Bureau began handling Federal student loan servicing complaints on February 25, 2016. The Bureau does not handle complaints about financial aid eligibility or Federal student loan origination (getting a loan). 31 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 14: TYPES OF STUDENT LOAN COMPLAINTS REPORTED BY CONSUMERS 670A Dealing with my lender or servicer Cant r epay my loan 30% Gett ng a loan TABLE 9 TYPES OF STUDENT LOAN COMPLAINTS REPORTED BY CONSUMERS Types of student loan complaints Dealing with lender or servicer (Making payments, getting information about my loan. Managing my account) 67% Can't repay my loan (Fees, default, bankruptcy, billing, deferment, forbearance, fraud, credit reporting) 30% Getting a loan (Confusing terms, rates, denial, confusing advertising or marketing, sales tactics or pressure, financial aid services, recruiting) 2% Total Student Loan Complaints 100% The most common type of student loan complaint's related to dealing with a lender or servicer and includes issues such as making payments, getting information about a loan, and managing an account. Borrowers continued to report issues involving loan servicing, including payment processing problems, difficulty in obtaining documented loan account history, inaccurate account status, and customer service experiences when inquiring on repayment options. More frequently than other issues, non-federal and federal student loan borrowers expressed their concerns relating to trouble with how payments are handled. Borrowers complained of misapplied payments and inaccurate accounting of payments. Some borrowers complained of misapplication of payments and reported that payments were not applied to specified accounts, but rather applied to all accounts managed by the servicer. Some federal student loan borrowers reported that when contacting their loan servicers regarding financial distress, servicers provided them with information on hardship forbearance or deferment, instead of more beneficial options like income-driven repayment plans. Also, confusion on the difference between forbearance and deferment options was expressed by 32 CONSUMER FINANCIAL PROTECTION BUREAU borrowers of private and federal loans. Federal student loan borrowers complained of difficulty enrolling in income-driven repayment plans. Borrowers reported lost documentation, extended application processing times, and unclear guidance when seeking to switch from one income-driven repayment plan to another. Additionally, federal student loan borrowers described their experiences when trying to obtain guidance in completing annual income recertification for their income-driven repayment plan. These borrowers reported receiving insufficient information from their servicers to meet recertification deadlines and lengthy processing times. Non-federal and federal student loan borrowers reported issues of incorrect reporting of their loans to the credit reporting companies. Borrowers stated that their loan accounts were paid in full or not in a delinquent status but were being reported negatively. Some borrowers reported being contacted by collection companies for accounts that had been paid in full or for debts that were not owed. 3.9 Consumers' payday loan complaints In addition to the 7,300 payday loan related debt collection complaints reported in section 3.2, figures is and 16 and Table 10 show the types of payday loan complaints reported by consumers for the approximately 4,400 payday loan complaints the CFPB has handled. Approximately 1,800 (or 41%) of all payday complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (41%), found to be incomplete (13%), or are pending with the consumer or the CFPB (1% and 4%, respectively). 33 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 15 TYPES OF PAYDAY LOAN COMPLAINTS REPORTED BY CONSUMERS Cannot contact lender Charged fees or interest I did not expect 30%, Received a loan I did not apply for 14% Applied for a can but didn't receive money Payment to account not credited Can't stop lender from chargmg my hank account Lender Hempen my hank accol int on wrung day or for wrong amount FIGURE 16 TYPES OF PAYDAY LOANS CONSUMERS COMPLAIN ABOUT Online 56% Not stated In person or at a store 30%, 14M Of the 4,400 payday loan complaints submitted by consumers, approximately 56% were about problems consumers reported experiencing after obtaining (or attempting to obtain) a payday loan online. Approximately 14% reported problems when obtaining a payday loan in person or at a store. For the remaining approximately 30% of complaints, the consumer did not indicate how the loan was obtained. 34 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 10. TYPES OF PAYDAY LOAN COMPLAINTS REPORTED BY CONSUMERS, BY TYPE OF LOAN Types of Payday Complaints In person / at the store Online Not stated Total Cannot contact lender 13% 44% 43% 31% Charged fees or interest I did not expect 14% 70% 17% 30% Received a loan I did not apply for 7% 41% 52% 14% Applied for a loan, but didn't receive money 11% 65% 24% 7% Payment to account not credited 29% 53% 18% 7% Can't stop lender from charging my bank account 21% 67% 12% 7% Lender charged my bank account on wrong day or for wrong amount 29% 61% 10% 4% The most common type of payday loan complaint received in 2016 is about problems with contacting the lender. Consumers also commonly complained about being charged unexpected fees or interest and receiving loans for which they did not apply. Table to illustrates the types of issues reported by consumers based on the reported source of the loan. The remaining complaints involved issues identified in zms that continued into 2016, such as payment issues surrounding check holding and electronic debit authorization that hands control of the consumer's bank account over to the lender. Some consumers complained that the payday lender re-presented a check several times, causing their account to incur multiple insufficient funds or overdraft fees. Consumer confusion relating to repayment terms was frequently expressed. These consumers complained of the lack of clarity about repayment of the loan using automatic withdrawal features on a bank card, on a prepaid card, or by direct deposit. Consumers with multiple advances stated their difficulty managing a short repayment period and more often rolled-over the loan, resulting in an inflated total cost of the loan. The cost and structure of a particular loan can make it difficult for consumers to repay. Consumers raised concerns such as the risk of being unable to repay the loan while still having 35 CONSUMER FINANCIAL PROTECTION BUREAU enough money left over for other expenses, the high cost of the loan, and aggressive debt collection practices in the case of delinquency or default. 3.10 Consumers' prepaid card complaints Figure 17 and Table ii show the types of prepaid card complaints reported by consumers for the approximately 2,500 prepaid card complaints the CFPB has handled. Approximately 1,300 (or 50%) of all prepaid complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (37%), found to be incomplete (8%), or are pending with the consumer or the CFPB 0% and 4%, respectively). FIGURE 17: TYPES OF PREPAID CARD COMPLAINTS REPORTED BY CONSUMERS 33 3/: Unauthorized Vansections or other transaction issues Managing open rig or closing yOUi account 290A Fraud or scam 22'n Fees Advertising marketing or disclosures Adding money Overdraft savings or rewards features 36 CONSUMER FINANCIAL PROTECTION BUREAU 2% TABLE 11: TYPES OF PREPAID CARD COMPLAINTS REPORTED BY CONSUMERS Types of prepaid card complaints Unauthorized transactions or other transaction issues 33% Managing, opening, or closing your account 29% Fraud or scam 22% Fees 7% Advertising, marketing, or disclosures 4% Adding money 4% Overdraft, savings or rewards features 2% Total Prepaid Card Complaints 100% The most common type of prepaid card complaint involved unauthorized transactions or other transaction issues. Another common type of complaint was about managing, opening, or closing a prepaid card account. Consumers complained that they were unable to access funds loaded on their prepaid cards for extended periods of time. Frequently, these consumers also expressed hardships resulting from the lack of access to their funds. Some consumers stated that after disputing a particular charge, the company would often freeze the entire available balance to prevent further loss while the claim was under review. During the review process, companies sometimes requested additional information—such as purchase receipts or original packaging—which the consumer often stated was no longer in their possession. Consumers reported difficulty using prepaid cards. Some of these consumers stated that their cards were cancelled without notification. Consumers stated that they had to contact the company numerous times before a new card was issued. Consumers who received a prepaid card as a refund complained that they were unable to activate the card, access the funds, or both. Subsequently, for some of these consumers, dormancy fees were assessed, depleting the card balance. 37 CONSUMER FINANCIAL PROTECTION BUREAU Consumers reported that companies sometimes issued cards without proper verification resulting in theft of their funds. These consumers stated they experienced prolonged investigations of their claims, leaving them without access to their money for extended periods of time. Consumers raised issues involving the management of prepaid card accounts. In some of these complaints, consumers reported balance discrepancies for cards, especially if they were unable to check their balance and transaction history online or were not provided with statements. Consumers also complained of delayed credits to their prepaid card after notifying the company of a fraudulent or unauthorized charge or after a purchase had been cancelled or returned. 3.11 Consumers' money transfer complaints Figures 18 and 19 and Table 12 show the types of money transfer complaints reported by consumers for the approximately 2,300 money transfer complaints the CFPB has handled. Approximately 1,60 0 (or 68%) of all money transfer complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (22%), found to be incomplete (7%), or are pending with the consumer or the CFPB (0.9% and 3%, respectively). FIGURE 18: TYPES OF MONEY TRANSFERS CONSUMERS COMPLAIN ABOUT noinostib HS) rnonpy transfor 57% International monpy Iransfer 43% FIGURE 19: TYPES OF MONEY TRANSFER COMPLAINTS REPORTED BY CONSUMERS Fraud or scam 36'/ 28% Other transaction issues Money was net available when promised Other serv ce issues Wrong amo_mt charged or received Incorrect or missing disclosures or info 38 CONSUMER FINANCIAL PROTECTION BUREAU 19% 9% TABLE 12: TYPES OF MONEY TRANSFER COMPLAINTS REPORTED BY CONSUMERS Types of money transfer complaints Fraud or scam 36% Other transaction issues (Unauthorized transaction, cancellation, refund, etc.) 28% Money was not available when promised 19% Other service issues 9% Wrong amount charged or received 4% Incorrect or missing disclosures or info 4% Total Money Transfer Complaints 100% The most common type of money transfer complaint is about fraud or scams. Many of these consumers complained that they sent money to a seller but did not receive the items they purchased in return. Other complaints involved consumers who frequently remit money to family members both domestically and internationally. A number of these consumers stated that they regularly used money transfers to provide for family members' basic living expenses. They often reported that the transfer recipients did not receive the money transfer, the amount received was smaller than expected, or the transfer encountered significant and unanticipated delays. Consumers attempting to complete transactions through an online money transfer service often reported encountering problems with the dispute resolution process. Sellers describe several scenarios where they did not receive payments after sending the item to the buyer. This often occurred when the seller was told that the payment had been accepted, but was later cancelled. Cancellation was done either by the buyer due to a dispute or by the financial institution because of insufficient funds in the buyer's account. Consumers reported that money transfer service providers placed holds on accounts without providing them with an explanation. Companies commonly reported that the hold was placed as a result of a risk-based model that will hold reserves on accounts in order to cover potential 39 CONSUMER FINANCIAL PROTECTION BUREAU losses arising from reversals or chargebacks Consumers who submitted complaints about international money transfers commonly reported delays and restrictions when attempting to make transfers. Many of these complaints are the product of company risk-based assessments, reviewed for compliance with United States regulations administered by the Office of Foreign Assets Control and consumer identification efforts. Consumers often complained that companies did not provide an adequate explanation of the process. 3.12 Other financial services complaints Figure zo and Table 13 show the types of other financial service complaints reported by consumers for the approximately 2,100 other financial services complaints the CFPB has handled. Approximately 500 (or 22%) of all other financial services complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (57%), found to be incomplete (13%), or are pending with the consumer or the CFPB (1% and 7%, respectively). FIGURE 20: TYPES OF OTHER FINANCIAL SERVICE COMPLAINTS REPORTED BY CONSUMERS 58% Fraud or Scam Customer service or customer relations 15% Unexpected or other Fees 7 to Fxcessive Fees 7 to 4 Advertising and marketing Disclosures [ astor stolen check Lost or stolen money order Incorrect exchange rate 40 3 to 2 1 'D 0 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 13: TYPES OF OTHER FINANCIAL SERVICE COMPLAINTS REPORTED BY CONSUMERS Types of other financial service complaints Fraud or Scam 58% Customer service/Customer relations 16% Unexpected/Other Fees 7% Excessive Fees 7% Advertising and marketing 4% Disclosures 3% Lost or stolen check 2% Lost or stolen money order 1% Incorrect exchange rate OM% Total other financial services 100% The majority of the other financial service complaints were about debt settlement, refund anticipation check, and credit repair. Some consumer complaints about debt settlement are related to debt collection and consumers' attempts to reduce their debt balance with their original creditor. Many of these complaints involved consumer reports of possible fraud or scams. Consumers reported making good faith payments to debt relief companies to pay off existing debt to creditors. Some of these consumers state that the payments were never forwarded to their creditors and they are now facing lawsuits for accounts they presumed were paid. Consumers who submitted check cashing complaints frequently mentioned the high costs. 'rhis was especially common for consumers who don't have a bank account at the institution where they were attempting to cash the check. A number of these consumers also complained about being unable to cash checks. In many instances, these checks were not cashed because of recommendations made by check authorization and warranty companies. Consumers also complained about difficulties redeeming money orders and about problems 41 CONSUMER FINANCIAL PROTECTION BUREAU encountered when money orders were lost. In many of these complaints, consumers expressed dissatisfaction with the error resolution processes available to them and the length of time required to resolve errors. Money order, traveler's check/cashier's check, and foreign check complaints frequently involved consumers who believed that they were victims of a scam. These complaints involved common scams, such as those that involve providing advance payment before goods are delivered or services are rendered. Scam victims may be unable to secure redress from their financial institutions. Consumers looking to repair their credit expressed concern of being scammed by credit repair companies after no relief was provided and requests for reimbursement went unacknowledged. 3.13 How companies respond to consumer complaints Approximately 196,900 (or 68%) of all complaints handled by the CFPB between January 1, 2016, and December 31, 2016, were sent by Consumer Response to companies for review and response:1 Table 14 shows how companies responded to these complaints during this time period. Company responses include descriptions of steps that have been or that will be taken, communications received from the consumer, any follow-up actions or planned follow-up actions, and a categorization of the response. Response category options include "Closed with monetary relief," "Closed with non-monetary relief," "Closed with explanation," "Closed," "In progress," and other administrative options. "Monetary relief' is defined as objective, measurable, and verifiable monetary relief to the consumer as a direct result of the steps that have been or that will be taken in response to the complaint. "Closed with non-monetary relief' 12 The remaining complaints have been referred to other regulatory agencies (21%), found to he incomplete (8%), or are pending with the consumer or the CHT (1% and 2%, respectively). 42 CONSUMER FINANCIAL PROTECTION BUREAU indicates that the steps taken by the company in response to the complaint did not result in monetary relief to the consumer that is objective, measurable, and verifiable, but may have addressed some or all of the consumer's complaint involving non-monetary requests. "Nonmonetary relief' is defined as other objective and verifiable relief to the consumer as a direct result of the steps that have been or that will be taken in response to the complaint. "Closed with explanation" indicates that the steps taken by the company in response to the complaint included an explanation that was tailored to the individual consumer's complaint. For example, this category would be used if the explanation substantively meets the consumer's desired resolution or explains why no further action will be taken. "Closed" indicates that the company closed the complaint without relief — monetary or non-monetary — or explanation. Consumers are given the option to review and provide feedback about all company closure responses. Companies have responded to approximately 94% of complaintso sent to them and report having closed 9o% of the complaints sent to them in 2016. Table 14 shows how companies have responded. 13 Companies have responded to approximately 185,900 of the 196,900 sent to them for response. 43 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 14 HOW COMPANIES HAVE RESPONDED TO CONSUMER COMPLAINTS Closed with monetary relief Closed Closed Closed Administwith non- with (without rative monetary explanation relief or response relief explanation) Company reviewing Company did not provide a timely response Debt collection <1°/0 12% 70% 3% 3% 4% 8% Credit reporting <1°/0 22% 70% <1% 3% 4% <1% Mortgage 3% 3% 82% 2% 3% 5% 2% Bank account or service 18% 8% 62% 2% 1% 5% 4% Credit card 20% 10% 63% <1% 2% 4% 1% Consumer loan 5% 7% 72% 2% 2% 5% 6% Student loan 3% 6% 85% <1% <1% 3% 2% Payday loan 3% 2% 66% 3% 14% 2% 10% Prepaid 21% 6% 64% 2% 2% 4% 1% Money transfer 9% 5% 76% 1% <1% 5% 3% Other financial service 10% 2% 63% 5 1% 6% 12% All 6% 11% 72% 2% 3% 4% 3% 44 CONSUMER FINANCIAL PROTECTION BUREAU Companies have the option to identify their responses to particular complaints as being "Closed with non-monetary relief' when they provide non-monetary relief in response to complaints. In such cases, consumers have received a range of non-monetary relief, such as: providing mortgage foreclosure alternatives that do not have direct monetary value to the consumer, but that help them keep their home; stopping harassment from debt collectors; cleaning up consumers' credit reports by correcting submissions to credit bureaus; restoring or removing a credit line from a credit file; • correcting account information, including in credit reports; and • addressing formerly unmet customer service issues. Companies also have the option to report an amount of monetary relief, where applicable. In 2016, companies provided relief amounts in response to 11,330 complaints. For companies which have reported monetary relief, the median amount of relief reported was $141; however, the amount varies by product, ranging from a median of $500 in relief for mortgage complaints to $29 in relief for credit reporting complaints. 45 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 15: MONETARY RELIEF REPORTED BY COMPANIES Product Number of complaints Median amount Debt collection 360 $316 Credit reporting 150 $29 Mortgage 1,190 $500 Bank account or service 4,060 $108 Credit card 4,250 $105 Consumer loan 530 $200 Student loan 250 $245 Payday loan 60 $375 Prepaid 270 $200 Money transfer 150 $205 Other financial service 50 $323 Overall 11,330 $141 3.14 Consumers' feedback about companies' responses Once the company responds, the CFPB provides the company's response to the consumer for review. Where the company responds "Closed with monetary relief," "Closed with non-monetary relief," "Closed with explanation," or "Closed," consumers are given the option to provide feedback on the company's response. Figure 21 shows how consumers responded to the approximately 176,800 complaints where they were given the option to provide feedback. Approximately 18% of consumers disputed the response provided by the company, while approximately 67% did not dispute the response during the feedback period. The rest were pending with consumers at the end of December 31, 2016. 46 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 21: CONSUMER FEEDBACK ABOUT COMPANY RESPONSES Debt collection 18% 15% Credit reporting Mortgage Bank account or service Credit card 21% 17% 21% Consumer loan 21% Student loan 20% Payday loan 14% Prepaid 16% Money transfer Other financial service All 16% 22% 18% Pending consumer review of companys reported resolution • Consumer disputed companys reported resolution Consumer did not dispute companys reported resolution 3.15 Consumer Response investigation and analysis Consumer Response analyzes consumer complaints, including the accuracy, completeness, and timeliness of a company's responses as well as consumers' feedback about that company's responses, to ensure that consumers receive timely responses to their complaints and that the Bureau and other regulators, consumers, and the marketplace have the complaint information needed to improve the functioning of the consumer financial markets for such products and services. Consumer Response uses a variety of approaches to analyze consumer complaints including, for example, cohort and text analytics to identify trends and possible consumer harm. 47 CONSUMER FINANCIAL PROTECTION BUREAU Complaint analysis may prompt investigation of individual complaints or groups of complaints and possible referral to colleagues in the CFPB's Division of Supervision, Enforcement, and Fair Lending & Equal Opportunity for further consideration. Consumer Response shares complaint data, analyzes, and offers insights to other offices to help the Bureau: • Understand problems consumers are experiencing in the marketplace and the impact of those experiences on their lives; Develop tools to empower people to know their rights and protect themselves; • Scope and prioritize examinations and ask targeted questions when examining companies' records and practices; Identify and stop unfair practices before they become major issues; and • Investigate issues and take action when we find problems. 3.16 Conclusion Listening to consumers and reviewing and analyzing their complaints is an integral part of the CFPB's work in understanding issues in the financial marketplace, and helping the market work better for consumers. The information shared by consumers and companies throughout the complaint process informs the Bureau about business practices that may pose risks to consumers and helps the Bureau in its work to supervise companies, to enforce Federal consumer financial laws, to write better rules and regulations, and to educate and engage consumers. 48 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 22: COMPLAINTS HANDLED FROM JULY 21, 2011, THROUGH DECEMBER 31, 2016 (BY STATE, AND THE DISTRICT OF COLUMBIA) Complaints 1,000 ME 150,000 3,516 WI VT NH 12,182 1,724 WA ID MT ND MN IL MI NY MA 21,902 3,988 1,927 1,076 12,238 38,140 27,204 69,138 19,611 4496 OR NV WY SD IA IN OH PA NJ CT RI 12,430 13,536 1,158 1,624 5,128 12,673 32,963 38,279 40,574 11,899 3,385 CA UT CO NE MO KY WV VA MD DE 140488 6,255 18,141 3491 1A841 8,592 3,045 33,606 32555 5,477 AZ NM KS AR TN NC SC DC 23,310 5,732 5,875 5,038 17,759 29,841 14,420 6,242 OK LA MS AL GA 8,029 11,999 5,784 12,050 44,315 49 HI AK FL 3,812 1409 104,285 CONSUMER FINANCIAL PROTECTION BUREAU March 31, 2017 The Honorable Maxine Waters Ranking Member Committee on Financial Sei-vices United States House of Representatives 4340 Thomas P. O'Neill. Jr. House Office Building Washington, DC 20515 Dear Ranking Member Waters: Enclosed please find the Consumer Financial Protection Bureau's Consumer Response Annual Report, as required under Section 1013(b)(3)(C) of the Dodd-Frank Wall Street Reffinn and Consumer Protection Act. Should you have any questions about the enclosed report, please contact me at (202) 435-9711. Catherine Galicia Assistant Director for Legislative Affairs March 2017 Consumer Response Annual Report January 1 — December 31, 2016 Consumer Financial Protection Burea LI Message from Richard Cordray Director of the CFPB The Consumer Financial Protection Bureau began consumer response operations on July 21, 2011, as the nation's first federal agency with the sole mission to protect American consumers in the financial marketplace. Our Office of Consumer Response has continued to improve and expand the CFPB's ability to engage consumers that face financial challenges and bring their concerns to the attention of companies. The CFPB accepts complaints about many financial products and services, including mortgages, credit "We had actually lost over $1,goo... For u very cards, auto loans, student loans, deposit accounts, frustrating month we tried everything to reach debt collection, credit reporting, payday loans, the company for an explanation and finally put consumer loans, and more. As of March 1, 20117, we in u complaint with CFPB. Within two weeks we have handled over 1,136,000 consumer complaints. received a response from the company and a check for the difference. We are so gratefill to Listening to consumers is key to our mission. By CFPB and this avenue for resolution. lam answering consumer questions and handling their positive without their intervention our case complaints, we learn about consumers' experiences in the consumer financial marketplace, about would never have been resolved." — Consumer from California company practices and behaviors, and about emerging trends in the marketplace. There is much to be learned from the questions consumers ask and the complaints consumers submit about the financial industry. From our earliest days of handling complaints, we have monitored and reported on the types of issues about which consumers complain. With a growing CONSUMER FINANCIAL PROTECTION BUREAU volume of consumer complaints, we now identify, categorize, analyze, and synthesize what they have told us. By closely analyzing complaint patterns, we are able to identify spikes in specific complaint types; emerging trends; issues with new and evolving products; and patterns across geographic areas, companies, and consumer demographics. These insights help us prioritize our own supervision and enforcement work and ask better and more targeted questions when examining a company's records. With the help of complaints, we dig deeply into potentially unfair practices so we can prevent minor issues from becoming major problems. We also use complaints to identify opportunities to educate and empower consumers about the marketplace and their rights and to understand what the rules of the road should be when we consider and undertake rulemaking. Through our public Consumer Complaint Database, launched by Consumer Response in June 2012, others can learn from consumers' complaints too. We have published more than 730,400 complaints that have been sent to companies for response. We do this not only to empower consumers and inform the public, but also so that companies can learn from the data and improve their OINT1 compliance and customer service operations. In June 2015, the Bureau started giving consumers the opportunity to share their descriptions of what happened, in their own words, so that others can read about, better understand, and learn from their experiences. Through the questions they ask us, the stories they tell us, and the complaints they submit, the voices of consumers remain foundational to the Bureau's work. Many companies are adapting to this focus to become more directly responsive to consumer concerns, and thus to improve their customer service. We continue to work to fulfill Congress's vision that we stand on the side of consumers to help improve their financial lives. Through their complaints, consumers help us make the marketplace a better and safer place. This is good for consumers, for the responsible businesses that seek to serve them, and for the American economy as a whole. Sincerely, Rawne Crag, Richard Cordray 2 CONSUMER FINANCIAL PROTECTION BUREAU Table of contents Message from Richard Cordray 1 Table of contents 3 1. Introduction 5 2. How the CFPB handles complaints 11 3. Results 14 3 3.1 Complaints handled in 2016 14 3.2 Consumers' debt collection complaints 15 3.3 Consumers' credit reporting complaints 18 3.4 Consumers' mortgage complaints 22 3.5 Consumers' bank account and service complaints 25 3.6 Consumers' credit card complaints 27 3.7 Consumers' consumer loan complaints 29 3.8 Consumers' student loan complaints 31 3.9 Consumers' payday loan complaints 33 3.10 Consumers' prepaid cards complaints 36 3.11 Consumers' money transfer complaints 38 3.12 Other financial services complaints 40 3.13 How companies respond to consumer complaints 42 CONSUMER FINANCIAL PROTECTION BUREAU 4 3.14 Consumers' feedback about companies' responses 46 3.15 Consumer Response investigation and analysis 47 3.16 Conclusion 48 CONSUMER FINANCIAL PROTECTION BUREAU 1. Introduction The CFPB is the first federal agency solely focused on consumer financial protection.' Collecting, investigating, and responding to consumer complaints2 are integral parts of the CFPB's work.3 The Bureau's Office of Consumer Response hears directly from consumers about the challenges they face in the marketplace, brings their concerns to the attention of companies, and assists in addressing their complaints. Consumer Response also answers consumers' questions about financial products and services and provides consumers with an opportunity to share their experiences — positive or negative — with consumer financial products and services through the "Tell Your Story" feature on the Bureau's website. These stories, like complaints and questions, are reviewed by CFPB staff to help the Bureau understand current issues in the financial marketplace. When the Bureau opened its doors on July 21, 2011, it began consumer response operations on the same day, answering consumers' questions and accepting consumer complaints about credit cards. Since then, the Bureau has expanded its complaint handling to include complaints about: mortgages, bank accounts and services, student loans, vehicle and other consumer loans, credit reporting, money transfers, virtual currency, debt collection, payday loans, prepaid cards, and other financial services. ' The Dodd-Frank Wall Street Reform and Consumer Protection Act of 201u, Pub. L. No. 111-203 ("Dodd-Frank Act") created the CFPB to protect consumers of financial products or services and to encourage the fair and competitive operation of consumer Financial markets. 2 Consumer complaints are submissions that express dissatisfaction with, or communicate suspicion of wrongful conduct by, an identifiable entity related to a consumer's personal experience with a financial product or service. 3 See Dodd-Frank Act, Pub. L. No. 111-2u3, Section 1o21(c)(2). 5 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 1: TYPES OF COMPLAINTS OVER TIME Credit Mortgages July 21 2011 Bank arrourgand sereces pcvate student 'earls, arid Credit consume loan. reporting • December 1, March 1 2011 2012 Money transfers 0 :ober 22, A ri 4, 2013 Prepaid gelds credit repair, debt senlemem d n c pawn and title cans Debt col ection Pmcm loans July 10 2012 November 6, J ly 19, 2012 2014 V rteal cumency Cede'al student loon Ma ke-place se-Acing lending A must 11 F brua y 25 Ma ch 204 2 16 201h Consumers also contact the CFPB about other products and services. The Bureau refers consumers with questions to other regulators or additional resources, as appropriate. The CFPB's phased-in approach to taking complaints enabled Consumer Response to gather and incorporate feedback from consumers and companies into each subsequent complaint capacity expansion. For example, Consumer Response has improved its complaint submission process and enhanced communication with companies. Leveraging feedback from consumers and companies, as well as its own observations, Consumer Response identifies new opportunities to improve its processes and implement changes to make the process efficient and effective for consumers and companies. Since beginning to accept complaints on July 21, 2011, the CFPB has handled approximately 1,136,000 consumer complaints as of March 1,2017. 6 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 2: COMPLAINTS OVER TIME 30K a e." 20K C (73 a r 3 u ee, 10K ct) se E j OK 2011 2012 2013 2014 2015 2016 2017 Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan FIGURE 3: COMPLAINT VOLUME BY PRODUCT 2015 AND 2016 Debt collection 3rob, 2016 88 000 85.200 2015 Credit reporting 19% 2016 2044 2015 Mortgage Prepaid Money transfer Other financial services 22 400 9% 2016 26 600 80 6% 2016 54 4•/ 2016 22 200 16 400 13 500 12 300 7 300 2015 Payday loan 28 400 80 2015 Student loans 5C 800 10Th 2016 2015 Consumer loan 51 200 19% 2015 Credit card 55 000 18% 2016 2015 Bank aecobrit or serv ces 54 000 2016 2% 4A00 2015 2% S500 2016 0 94 , 2.500 2015 1% 3000 2016 0 84, 2.300 2015 0 94 , 2.400 2016 0 Th, 2.100 2015 0 7°, , 1 930 Percent of annual comp a ints CONSUMER FINANCIAL PROTECTION BUREAU NLJfllber of complaints Year over year, complaint volume has steadily increased, rising 7% from 271,600 in 2015 to 291,400 in 2016. Information about consumer complaints is available to the public, through the CFPB's public Convont Cr Coin pl nint Da th lvo so, launched on June 19, 2012.4 Complaints are added to the database after the company responds to the complaint, confirming a commercial relationship with the consumer, or after the company has had the complaint for 15 calendar days, whichever comes first. Complaints are not published if they do not meet all of the publication criteria.5 The public database was initially populated with credit card complaints and has been expanded over time: June 2012: populated with credit card complaints dating back to June 1, 2012; • October 2012: added credit card complaints dating back to December!, 2011; • March 2013: added mortgage complaints dating back to December 1, 2011; bank account and service complaints, student loan complaints, and other consumer loan complaints, all dating back to March 1, 2012; • May 2013: added credit reporting complaints dating back to October 22, 2012 and money transfer complaints dating back to April 4, 2013; • November 2013: added debt collection complaints dating back to July 10, 2013; July 2014: added payday loan complaints dating back to November 6, 2013; January 2015: added complaints about prepaid cards, other consumer loans (pawn and title loans), and other financial services dating back to July 19, 2014; • June 2015: added consumer complaint narratives and optional company public In December 2011, the MB asked the public to comment on a proposed policy of making some credit card complaint data publicly available. After considering those comments, the CHB finalized its policy for disclosing some of the data through its Consumer Complaint Database (Policy Statement). See Disclosure of Certain Credit Card Complaint Data, 77 Fed. Reg. 37,558 (June 22, 2012). 5 See Disclosure of Consumer Complaint Narrative Data, 8v) Fed. Reg, 15572 (March 24, 2015). 4 8 CONSUMER FINANCIAL PROTECTION BUREAU responses; February 2016: added tags to identify complaints submitted by older Americans and senicemembers and a field indicating whether the consumer consented to publication of their complaint narrative; and September 2016: added complaints about federal student loan servicing dating back to February 25, 2016, and virtual currency complaints dating back to August 11, 2014. The database contains certain individual complaint-level data collected by the CFPB, including the type of complaint, the date of submission, the consumer's zip code, and the company about which the consumer submitted the complaint. The database also includes information about the actions taken by a company in response to a complaint — whether the company's response was timely, how the company responded, and whether the consumer disputed the company's response. The database does not include confidential information about consumers' identities. On June 25, 2015, the CFPB began to publish consumer complaint narratives in the Consumer Complaint Database. Consumers now have the opportunity to share — in their own words — their experiences with the consumer financial marketplace. Only those narratives for which opt-in consumer consent is obtained and to which a robust personal information scrubbing process is applied are eligible for disclosure. The database now includes more than 130,000 complaints where consumers have opted to share their complaint narrative with others. The CFPB gives companies the option to respond publicly to the substance of the consumer complaints they receive from the CFPB by selecting from a set list of public-facing response categories. Web-based and user-friendly features of the database include the ability to filter data based on specific search criteria or tags, to aggregate data in various ways, such as by complaint type, company, state, date, or any combination of available variables, and to download data. Information from the database has been shared and evaluated on social media and using other new applications. 9 CONSUMER FINANCIAL PROTECTION BUREAU Consumer Complaint Database Each muck we send thOUb0 ltib of cm sumo's comaloints about nancial products and sera cos to companies for response These complaints are atrh idled hen otter the company responds or alter 15 days which ever corneal! sa By adding the, voice consumers nelp mprove tne finarc al marketplace Ylvalr earamatealtiate Shad 01•1•111/ MOAN. WWW 001111140011q0.1••• ald All consumerfinance gpvicom )11intdltab•ise Consumer Response continually strives to improve data quality and protect sensitive information, while increasingly making data available through reports about the complaints the CFPB handles and by sharing certain data with the public through the Consumer Complaint Database. In keeping with the CFPB's statutory responsibility and its commitment to accountability, this report provides an overview of the handling and analysis of complaints by the Bureau from January 1 through December 31, 2016.6 6 This report addresses the reporting requirements of Dodd-Frank Act Section 1u13(b)(3)(c), 12 U.S.C. § 5493(b)(3)(e) and Fair Credit Reporting Act Section 611(e), In U.S.C. §168ti(e). 10 CONSUMER FINANCIAL PROTECTION BUREAU 2. How the CFPB handles complaints Consumer Response receives complaints and questions directly from consumers. The CFPB accepts complaints th ough its website and by telephone, mail, email, fax, and referral. In addition to submittin complaints on the Bureau's website, consumers can also log on to a secure consumer port Ito check the status of a complaint and review a company's response. While on the website, consumers can chat with a live agent to get help completing a complaint form. Consumers can also call the Bureau's toll-free number to ask questions, submit a complaint, check the status of a complaint, and more. The CFPB's U.S.-based contact centers provide services to consumers in more than i8o languages and to consumers who are deaf, have hearing loss, or have speech disabilities via a toll-free telephone number. Cutting-edge technology, including secure company and consumer portals, makes the process efficient and user-friendly for consumers and companies. For companies, the CFPB provides secure channels for communicating directly with dedicated staff about technical issues. The CFPB continually strives to collect reliable complaint data while ensuring the system's ease of-use and effectiveness for consumers. When consumers submit complaints, they select the consumer financial product or service as well as the issue they are having with that product or service from a list. This provides structured data that can be used to group complaints to get a sense of which financial products and services consumers complain about and what issues they are having in the marketplace. 11 CONSUMER FINANCIAL PROTECTION BUREAU Complaints are sent via a secure web portal to the appropriate company: The company reviews the information, communicates with the consumer as needed, and determines what action to take in response. The company then reports back to the consumer and the CFPB via the secure company portal, and the Bureau invites the consumer to review the response and provide feedback. Consumers who have submitted complaints with the Bureau can log onto the secure consumer portal available on the CFPB's website or call a toll-free number to receive status updates, provide additional information, and review responses provided to the consumer by the company. IC Compl i t submit-I d Review and route Company response Complaint published Consumer review Analyze and report The process seeks to ensure that consumers receive timely responses to their complaints and that the Bureau, other regulators, consumers, and the marketplace have the complaint information needed to improve the functioning of the consumer financial markets for such products and services. We also collect unstructured data from consumers and companies during the complaint process. The consumer's narrative description of what happened, consumer-provided documents, the company's response, and company-provided documents are examples of unstructured data. The Bureau uses a variety of approaches to analyze consumer complaints including, for example, cohort and text analytics to identify trends and possible consumer harm. Our review and 7 In some cases, Consumer Response refers or sends a complaint to another regulator, for example, if a particular complaint does not involve a product or market that is within the Bureau's jurisdiction or one that is not currently being handled by the Bureau, or in cases where the company is not yet registered to respond to complaints in our system. Complaints handled by the Bureau, including those sent to other regulators, serve to inform the Bureau in its work to supervise companies, to enforce consumer financial laws, to write better rules and regulations, and to educate and engage consumers. 12 CONSUMER FINANCIAL PROTECTION BUREAU analysis of unstructured data offers deeper insights into consumers' complaints and helps the Bureau understand problems consumers are experiencing with consumer financial products and services. Throughout this process, subject matter experts help monitor certain complaints. For example, the Office of Servicemember Affairs coordinates with Consumer Response on complaints submitted by or on behalf of a servicemember or the spouse or dependent of a servicemember. For these purposes, a servicemember includes anyone who self-identifies as active duty, National Guard, or Reservist, as well as those who previously served and identify as a Veteran or retiree. 13 CONSUMER FINANCIAL PROTECTION BUREAU 3. Results 3.1 Complaints handled in 2016 Between January 1, 2016 and December 31, 2016, the CFPB handled approximately 291,400 consumer complaints.8 FIGURE 4: CONSUMER COMPLAINTS BY PRODUCTS 3m/5 Debt collection 19% Credr rounding 18% Mortgage 1C'h. Bank account or service 9% Cred card Consumer loan Student loan Payday loan 2% Prepaid 0 9i7, More/ transfer Other financial serv ce O.8 0 7°, Approximately 73% of all consumer complaints were submitted through the CFPB's website and This analysis excludes multiple complaints submitted by a given consumer on the same issue (i.e., duplicates) and whistleblower tips. All data are current as ofJanuary 1, 2017. 9 Percentages may not sum to hid percent due to rounding. 8 14 CONSUMER FINANCIAL PROTECTION BUREAU 7% via telephone calls. Referrals accounted for 12% of all complaints handled by the CFPB. The rest were submitted by mail, email, and fax. The tables and figures presented below show complaints by type, actions taken, company responses, and consumers' feedback about company responses.rn 3.2 Consumers' debt collection complaints Figures 5 and 6 and Table 1 show the types of debt collection complaints reported by consumers for the approximately 88,000 debt collection complaints the CFPB has handled. Approximately 41,400 (or 47%) of all debt collection complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (38%), found to be incomplete (i0%), or are pending with the CFPB or the consumer (4% and 1%, respectively). These complaints include first-party (creditors collecting on their own debts) and third-party collections. FIGURE 5: TYPES OF DEBT CONSUMERS COMPLAIN ABOUT 331/ Other 21,A I do not know 17% Medical Cred card 13% Payday loan Mortgage Auto Federal student loan Non-federal student loan Debt collection complaints led both the daily and monthly volume of complaints handled by the CFPB in 2016. The issues that consumers selected in 2016 were similar to the issues they selected in 2015. ni Percentages may not sum to Loo percent due to rounding. 15 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 6: TYPES OF DEBT COLLECTION COMPLAINTS REPORTED BY CONSUMERS 41%, Continued attempts to collect debt not owed Disclosure verification of debt 20'n Communication tactics 15% False statements or representation Taking or threatening an illegal action Improper contact or sharing of info 6% TABLE 1: TYPES OF DEBT COLLECTION COMPLAINTS REPORTED BY CONSUMERS Types of debt collection complaints Continued attempts to collect debt not owed (Debt was discharged in bankruptcy, debt resulted from identity theft, debt was paid, debt is not mine) Disclosure/verification of debt (Did not receive notice of right to dispute, not enough information to verify debt, did not disclose communication was an attempt to collect a debt) 41% 20% Communication tactics (Frequent or repeated calls, called outside of 8am-9pm, used obscene, profane or other abusive language, threatened to take legal action, called after sent written 15% cease of communication notice) False statements or representation (Attempted to collect wrong amount, impersonated attorney, law enforcement or government official, indicated committing crime by not paying 9% debt, indicated should not respond to lawsuit) Taking/threatening an illegal action (Threatened to arrest me or take me to jail if I do not pay, threatened to sue neon debt that is too old to be sued on, sued me without properly notifying me of lawsuit, sued me where I did not live or did not sign for the debt, attempted to/collected 9% exempt funds, seized or attempted to seize property) Improper contact or sharing of information (Contacted me after I asked not to, contacted my employer, contacted me instead of my attorney, talked to a third party about my debt) Total Debt Collection Complaints 6% 100% Many of the trends identified in ang continued into zoth. The most common type of debt collection complaint is about continued attempts to collect a debt that the consumer reports is not owed. In some of these complaints, consumers reported not being provided documentation to verify the debt, even after written, timely requests were submitted for verification of the purported debts. 16 CONSUMER FINANCIAL PROTECTION BUREAU In other complaints, consumers complained that first-party collectors (creditors collecting on their own debts) forwarded their accounts to third-party collectors for a debt that was not owed. Upon dispute with the third-party collector, consumers reported that the debt was sent back to the first-party, only to be later sent to a new third-party collector. Some consumers reported that collectors place the onus of proving that the debt is not owed on consumers throughout this cycle. Consumers reported their accounts were forwarded to third-party collectors without any prior contact from the first-party collectors of an outstanding balance. Some complained that accounts had been negatively reported to credit reporting companies even after communicating with the first- and third-parties that the debt was not owed. Consumers also reported that their accounts were not in a delinquent status prior to contact by third-party collectors. Communication tactics used by debt collectors was a common issue raised by consumers. Many of these consumers reported that they received multiple calls weekly or even daily. According to many consumers, requests to cease communications were not honored. For both first- and third-party collectors, consumers reported continued communications following an oral or written request to cease communications. Consumers continued to report that frequent or repeated calls are a commonly used collection tactic. In many complaints, consumers described collection calls to their place of employment even after having informed collectors that contact at work was prohibited by their employers. Some consumers reported that collectors made in-person visits to their workplace. In 2016, there was a slight increase in the number of consumers who complained about debt collectors who talked to a third party about their debt. Some of these consumers described how their debt was disclosed to a supervisor or other third-party. Consumers submitting medical debt collection complaints increased slightly in 2016. In the submission of complaints where "medical" was identified as the type of debt, consumers selected "debt was paid" and "debt was not mine" as their primary issue in the majority of the complaints. Frequently, consumers stated that third-party debt collectors attempted to collect medical debt with incorrect balances. in many of these complaints, consumers reported that they were not given enough information to verify a debt. Some consumers reported they had secured a payment plan with the original party; however, the account was forwarded to collection agencies without regard to prior approved payment plans. Other complaints involved consumers' insistence that the amount due was erroneous as they believed the amount pursued 17 CONSUMER FINANCIAL PROTECTION BUREAU by collectors was for expenses covered by their medical insurance. 3.3 Consumers' credit reporting complaints Figure 7 and Table 2 show the types of credit reporting complaints, as reported by consumers for the approximately 54,000 credit reporting complaints handled by the CFPB. This includes approximately 44,000 (81%) about the three largest nationwide credit reporting companies — Equifax, Experian, and TransUnion. Approximately 45,300 (or 84%) of all credit reporting complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (0.3%), found to be incomplete (14%), or are pending with the consumer or the CFPB (2% and 0.3%, respectively). FIGURE 7: TYPES OF CREDIT REPORTING COMPLAINTS REPORTED BY CONSUMERS Incorrect rricorri a•ron on credit report Credit report' rig company's inve6trgation 74% 11% Improper Jse of credit report Unable to obtain report or score Credit monitoring or identity protection 18 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 2: TYPES OF CREDIT REPORTING COMPLAINTS REPORTED BY CONSUMERS Types of credit reporting complaints Incorrect information on credit report (Information is not mine, Account terms, Account status, Personal information, Public record, Reinserted previously deleted information) 74% Credit reporting company's investigation (Investigation took too long, Did not get proper notice of investigation status or results, Did not receive adequate help over the phone, Problem with statement of dispute) 11% Improper use of my credit report (Report improperly shared by credit reporting company, Received marketing offers after opting out, Report provided to employer without written authorization) 6% Unable to gel my credit report or credit score (Problem gelling free annual report, Problem gelling report or credit score) 6% Credit monitoring or identity protection services (Problem cancelling or closing account, Billing dispute, Receiving unwanted marketing or advertising, Account or product terms and changes, Problem with fraud alerts) 3% Total Credit Reporting Complaints 100% The most common type of credit reporting complaint continues to be about information the consumer believes to be incorrect appearing on the consumer's credit report, such as information that does not belong to the consumer, incorrect account status, and incorrect personal information. These complaints frequently involve debt collection items. In some cases, consumers report having paid the debt appearing on their report. In other complaints, consumers assert the debt is no longer due because the debt is too old to be enforced in court. These complaints may reflect confusion about the fact that information on past overdue debt— even when paid or no longer enforceable because of limitations—often can remain on a credit report. Other complaints state that the debt belongs to a different consumer, or consumers state that they do not recognize the debt. Delays in updating inaccurate records, problems correcting inaccurate records, and public records being incorrectly matched to their credit reports continue to be frequent issues cited by consumers. 19 CONSUMER FINANCIAL PROTECTION BUREAU Consumers continued to report having trouble accessing their credit reports because they cannot answer detailed identity authentication questions. If denied access to their report because they failed online authentication, the option available is to mail copies of sensitive, identifying documents, which consumers note is time-consuming and worry is potentially unsecure. The three national credit reporting companies reported providing relief — monetary or nonmonetary — in response to approximately 23% of incorrect information complaints and complaints about the credit reporting companies' investigations sent to them for response. Providing relief to consumers varies by company with Experian providing relief in response to approximately 41% of complaints, Transunion providing relief in response to approximately 25% of complaints, and Equifax providing relief in response to approximately 5% of complaints. In addition to complaints about the three nationwide credit reporting companies—Equifax, Experian, Transunion—consumers submitted numerous complaints about specialty and other consumer reporting companies. These companies specialize in providing reports in a number of areas, including background and employment screening, checking account screening, rental screening, and insurance screening. Difficulty resolving inaccuracies is a major concern for consumers submitting complaints about specialty consumer reporting companies. These consumers report long delays, negative customer service experiences, and failed attempts to have inaccurate negative information removed. Tables 3 and 4 take a closer look at the two largest issue categories chosen by consumers that show the extent to which the sub-issues that consumers choose when submitting complaints about inaccurate information on their credit reports and credit reporting companies' investigations are similar at the three nationwide credit reporting companies. 20 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 3: SUB-ISSUES OF INCORRECT INFORMATION IN CREDIT REPORTING COMPLAINTS Sub-issue for incorrect information in credit report complaints Equifax Experian TransUnion National credit reporting companies Information is not mine (Belongs to someone else, identity theft, fraud, etc.) 35% 38% 32% 35% 30% 32% 27% 30% 10% 11% 11% 11% 11% 7% 8% 9% Personal information (Wrong date of birth, address, etc.) 8% 8% 8% 8% Reinserted previously deleted information 6% 4% 15% 8% Total Incorrect Information in Credit Report Complaints 100% 100% 100% 100% Account status (Paid bill on time, account closed, etc.) Account terms (Creditor name/info, balance, payment, etc.) Public record (Bankruptcy, judgment, etc.) TABLE 4 SUB-ISSUES OF CREDIT REPORTING COMPANY'S INVESTIGATION COMPLAINTS National credit reporting companies Sub-issue for credit reporting company's investigation complaints Equifax Experian TransUnion No notice of investigation status or result 36% 44% 41% 40% Problem with statement of dispute 32% 30% 28% 30% Investigation took too long 23% 17% 19% 20% Inadequate help over the phone 10% 10% 12% 10% Total Credit Reporting Company's Investigation Complaints 100% 100% 100% 100% 21 CONSUMER FINANCIAL PROTECTION BUREAU 3.4 Consumers' mortgage complaints Figures 8 and 9 and Table 5 show the types of mortgage complaints reported by consumers for the approximately 51,200 mortgage complaints the CFPB has handled. Approximately 43,000 (or 84%) of all mortgage complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (11%), found to be incomplete (3%), or are pending with the consumer or the CFPB (0.4% and 1%, respectively). FIGURE 8: TYPES OF MORTGAGE PRODUCTS CONSUMERS COMPLAIN ABOUT 351/ Other Conventional fixed mortgage 13% FHA mortgage 10% Conventional adjUstable mortgage , ARM) Home eqLity loan or line of credit VA mortgage 3% Reverse mortgage For mortgage complaints, as with all other complaints, the consumer selects the issue that best describes the problem they are having. These issues correspond to the part of the mortgage process with which they are having a problem. Reflecting the complexity and interrelated nature of mortgages and mortgage issues, consumers are not asked to provide further specificity by selecting a sub-issue. This ensures the reliability of mortgage complaint data that we collect from consumers and share in reports and through the Consumer Complaint Database. FIGURE 9: TYPES OF MORTGAGE COMPLAINTS REPORTED BY CONSUMERS 40% Making payments Problems when unable to pay Applying for the loan 38% 10% Signing the agreement Receiving a credit offer Other 22 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 5. TYPES OF MORTGAGE COMPLAINTS REPORTED BY CONSUMERS Types of mortgage complaints Making payments (Loan servicing, payments, escrow accounts) 40% Problems when you are unable to pay (Loan modification, collection, foreclosure) 38% Applying for the loan (Application, originator, mortgage broker) 10% Signing the agreement (Settlement process and costs) 6% Receiving a credit offer (Credit decision/Underwriting) 3% Other 3% Total Mortgage Complaints 100% Complaint submissions increased in 2016 for consumers who reported the issue of "making payments (loan servicing, payments, escrow accounts)." Consumers complaining about the servicing transfer of their loan account voiced concerns of mismanagement of payments when made to either the prior or current servicer on or around the effective date of transfer. Many of these consumers reported that payment was not credited to their account. Some consumers reported post service transfer issues involving their escrow account resulted in an increase to their monthly payment with no clear explanation provided by their servicers. Additionally, consumers who reported being involved in the loss mitigation assistance process at the time of the loan servicing transfer complained that documentation (e.g., applications, modification approvals) was not provided to the new servicer. Some consumers reported missing loan payments, resulting in delinquent account statuses and negative reporting of the account to credit reporting companies. A number of consumers complained of payment issues involving monthly payments made via bill pay services with their financial institutions. These consumers reported that payments were electronically transmitted to their servicers, but not credited to their loan account. Consumers who were approved for loss mitigation options—for example, a trial period plan, forbearance agreement, or loan 23 CONSUMER FINANCIAL PROTECTION BUREAU modification—reported that their payments were not accepted or applied as intended. In managing escrow accounts, instances of over-collection, unexplained shortages, and untimely tax and insurance disbursements are all common issues that consumers reported. Consumers complained that the escrow discrepancies led to erroneous increases to their mortgage installment amount. Consumers reported that after paying an identified shortage disclosed in their escrow analysis statement, funds were not applied accurately and resulted in an increase in their monthly payment. Other complaints involved issues regarding the disbursement of funds from escrow accounts to pay for collections. Some consumers reported that despite having an escrow account for insurance, their servicer failed to submit timely payment to their homeowner's insurance company, which ultimately left their property without adequate coverage. The next most complained about issue involved problems consumers report when they are unable to pay, loan modification, collection, and foreclosure. In particular, complaints involving the loss mitigation assistance process often detailed repeated requests by servicers for submission of the same documentation and lack of responsiveness from the consumers' single point of contact. Some consumers reported receiving conflicting and confusing foreclosure notifications while undergoing loss mitigation assistance review. Many consumers complained about the denial of their modification applications, while others stated that the terms of the modification offered to them were unaffordable. Communication issues were reported by consumers as attempts to contact their servicers were met with difficulty and often resulted in confusing and contradictory information. Consumers seeking to obtain clarification regarding loan account reinstatement amounts, charges and fees, or interest rate increases stated they were provided ambiguous information. Some consumers described their experience as frustrating and asserted that the low level of customer service attributed to the delay in account resolution. Consumers reported that after having experienced property damage, they filed insurance claims, received their claims benefit checks, and forwarded those checks to their servicers. However, these consumers stated that servicers delayed releasing funds needed to make necessary repairs to their homes despite having provided all required documentation. Consumer complaints about mortgage originations often involved reports of prolonged and 24 CONSUMER FINANCIAL PROTECTION BUREAU confusing application and approval processes. Some consumers described unresponsive loan representatives and stated that they were required to submit multiple loan applications. A number of consumers reported that processing delays resulted in the loss of favorable interest rates and expiration of rate locks. 3.5 Consumers' bank account and service complaints Figures 10 and 11 and Table 6 show the types of bank account and service complaints, such as complaints about checking and savings accounts, as reported by consumers for the approximately 28,400 complaints handled by the CFPB. Approximately 22,200 (or 78%) of all bank account or service complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (16%), found to be incomplete (4%), or are pending with the consumer or the CFPB (0.5% and 1%, respectively). FIGURE 10 TYPES OF BANK ACCOUNTS AND SERVICES CONSUMERS COMPLAIN ABOUT 58'f Checking account 33'/ Other bank product/service Savings account (CD) Cerificate of deposit 3% Cashing a check without an account 0 n, FIGURE 11: TYPES OF BANK ACCOUNT AND SERVICE COMPLAINTS REPORTED BY CONSUMERS 46% Account management 24,A Deposits and withdrawals Sending or receiving payments 11% Problems nn Used by low kinds Using a debit or ATM card 25 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 6: TYPES OF BANK ACCOUNT AND SERVICE COMPLAINTS REPORTED BY CONSUMERS Types of bank account and service complaints Account opening, closing, or management (Confusing marketing, denial, disclosure, fees, closure, interest, statements, joint accounts) 46% Deposits and withdrawals (Availability of deposits, withdrawal problems and penalties, unauthorized transactions, check cashing, payroll deposit problems, lost or missing funds, transaction holds) 24% Making or receiving payments (Problems with payments by check, card, phone or online, unauthorized or fraudulent transactions, money/wire transfers) 11% Problems caused by my funds being low (Overdraft fees, late fees, bounced checks, credit reporting) Using a debit or ATM card (Disputed transaction, unauthorized card use, ATM or debit card fees, ATM problems) Total Bank Account and Service Complaints 9% 9% 100% Consumers submit complaints about accounts or services offered by banks, credit unions and nonbank companies under the general category of "bank accounts or services." The most common type of bank account and service complaint continues to relate to opening, closing, or managing the account. Consumer complaints about the use of consumer and credit reporting data for account screening are also common. Consumers frequently mentioned learning of a furnisher's past negative reporting to both specialty reporting companies and national credit reporting companies when they attempted to open a new bank account. Consumers also expressed that they have difficulty addressing potential errors on their reports. Promotional offers for opening new accounts were the focus of a number of complaints, including offers for airline miles and promotional cash. Some of these complaints involved the consumer's eligibility for the promotional offer—for example, when a consumer applies for an offer that they were not eligible for. Other complaints involved disputes over whether the consumer had met the required terms for a promotional offer. Complaints related to overdrafts remain common, including complaints about transaction 26 CONSUMER FINANCIAL PROTECTION BUREAU ordering. Consumers complained about overdrafts that took place because of confusion over the availability of funds that they were attempting to deposit. Consumers also regularly complained about the size of overdraft fees when making small dollar purchases. Other fees, including insufficient fund fees, extended overdraft fees and monthly maintenance fees were also frequently the subject of complaints. The availability of funds deposited via check or through direct deposit is a concern for consumers. Consumers expressed frustration with bank check holding policies and by the length of time it takes for various negotiable instruments to clear and become available. A number of these complaints involved mobile deposit applications and problems that consumers encountered when using them—including institutions having different funds availability policies for mobile deposits. Consumers also frequently complained about error resolution procedures for their deposit accounts, including timelines for investigation and provisional credit for disputed transactions. Consumers often asserted that a specific transaction was not authorized or that they were victims of fraud or identity theft. The meaning of authorization in the context of error resolution appears to cause confusion for some consumers as they attempted to dispute transactions because they were dissatisfied with the products or services that they purchased. A number of consumers have submitted complaints related to the probate process. These consumers frequently mentioned difficulty getting information about and access to their deceased relatives' accounts. These complaints often involved different types of accounts, including savings accounts, certificates of deposit, trust accounts, and retirement accounts. 3.6 Consumers' credit card complaints Table 7 shows the most common types of credit card complaints that the CFPB has handled as reported by consumers. Seventy three percent of the approximately 26,600 credit card complaints fell into these ten categories. Approximately 21,400 (or 81%) of all credit card complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatmy agencies (14%), found to be incomplete (3%), or are pending with the consumer or the CFPB (04% and 1%, respectively). 27 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 7: MOST COMMON CREDIT CARD COMPLAINTS REPORTED BY CONSUMERS Most common credit card complaints Billing disputes 17% Other 13% Identity theft / Fraud! Embezzlement 12% Closing! Cancelling account 7% Customer service / Customer relations 4% Delinquent account 4% APR or interest rate 4% Rewards 4% Advertising and marketing 4% Late fee 3% Credit Card Complaints in Top 10 Types 73% Billing disputes continue to be the most common type of credit card complaint. Consumers complained about the application of payments to their accounts with multiple balances and different expiration periods that resulted from balance transfers, cash advances, or deferred interest purchases. These consumers expressed that they were inadequately informed of how their payments would be applied and were surprised that payments were not applied to promotional or deferred interest balances with limited terms. Some consumers also thought that no interest charges would be incurred during the deferral period regardless of whether the debt is paid in full. Some consumers who received insurance products (e.g., phone or travel insurance), warranty extensions and guaranties, improved return policies, price protection services, and other similar benefits through their card programs complained about difficulties they reported experiencing while attempting to take advantage of these benefits. Credit decisions, including initial application decisions and servicing changes (e.g., interest rate 28 CONSUMER FINANCIAL PROTECTION BUREAU adjustments, credit limit reductions), were frequently the subject of complaints. Consumers complained of difficulty understanding determinations made by credit card companies and the reasons stated on letters explaining the decisions. These consumers also expressed concern about existing terms on their credit report that they felt did not reflect their creditworthiness. Other consumers expressed a belief that prejudice or bias may have impacted those credit decisions. Consumers continued to submit complaints regarding the closure of their account without their knowledge or consent. In response to these complaints, companies often replied that the consumer's account was closed because of default or suspected fraud. Also, consumers expressed a concern about the potential negative effect on their credit score when accounts were closed due to inactivity. Some of these consumers stated that they would have used the cards in question if they had been notified of the impending closure. Misleading offers for rewards program was a topic of concern for many consumers. These consumers complained of difficulty when attempting to receive promised benefits and felt that the terms and conditions of the programs were not clearly explained when they opened the card. Complaints about bonus points or miles programs, cash back programs, and travel benefits programs were especially common in these complaints. Consumers expressed frustration with various fees and additional costs associated with their credit cards. For example, although consumers appear to understand why late fees are assessed to their accounts, many felt that the fees should not be applied when an automatic payment failed or when a billing statement did not arrive in a timely manner. 3.7 Consumers' consumer loan complaints Figures 12 and 13 and Table 8 show the types of consumer loan complaints, such as complaints about installment loans, vehicle loans and leases, personal lines of credit, and pawn and title loans reported by consumers for the approximately 16,400 consumer loan complaints handled by the CFPB. Approximately 9,800 (or 6o%) of all consumer loan complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (28%), found to be incomplete (7%), or are pending with the consumer or the CFPB (i% and 4%, respectively). 29 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 12: TYPES OF CONSUMER LOANS CONSUMERS COMPLAIN ABOUT 48% Vehicle loan Installment loan 371/ Vehicle lease 8% Personal line of credit Title loan 2,/,, Pawn loan 0 5$, FIGURE 13: TYPES OF CONSUMER LOAN COMPLAINTS REPORTED BY CONSUMERS 450/0 Managing he loan lease or line of credit 228s Problems when you are unable to pay 18% Taking out loan or lease or account terms and changes Shopping for a loan lease or line o' credit 12M Other 2% Charged fees or interest I didn't expect 1'0 TABLE 8 TYPES OF CONSUMER LOAN COMPLAINTS REPORTED BY CONSUMERS Types of consumer loan complaints To Managing the loan, lease, or line of credit (Billing, late fees, damage or loss, insurance (GAP, credit, etc.), credit reporting, privacy) 45% Problems when you are unable to pay (Debt collection, repossession, set-off from bank account deficiency, bankruptcy, default) 22% Taking out the loan or lease! Account terms and changes (Term changes (mid-deal changes, changes after closing, rates, fees, etc.), required add-on products, trade-in payoff, fraud) Shopping for a loan, lease, or line of credit (Sales tactics or pressure, credit denial, confusing advertising or marketing) 18% 12% Other 2% Charged fees or interest I didn't expect 1%0 Total Consumer Loan Complaints 100% 30 CONSUMER FINANCIAL PROTECTION BUREAU The table illustrates that the most common type of consumer loan complaint pertains to managing the loan, lease, or line of credit. Other common types of complaints address problems consumers have when they are unable to pay—including issues related to debt collection, bankruptcy, default, and problems when taking out the loan or lease, such as term changes. Consumers continued to complain that they experienced a "bait and switch" where the lenders offers favorable terms to attract their interest in a product and then changes those terms right before the contract is consummated. This behavior was described as confusing and often led to consumers paying much more for a loan than they were initially told. In 2016, consumer loan complaints with the sub-product of vehicle loan were submitted more frequently than other sub-products. In these complaints, consumers complained about payment processing issues, including not having their payments applied to their accounts in a timely and correct manner. Consumers also complained of inaccurate debiting of their bank accounts for monthly payments. Some consumers complained that they did not understand why their account balances were not decreasing after making a larger number of monthly payments. These consumers indicated that they did not fully understand the effects of fees and high interest rates on the total cost of their loans. 3.8 Consumers' student loan complaints Figure 14 and Table 9 show the types of student loan complaints as reported by consumers for the approximately 12,300 student loan complaints handled by the CFPB11. Approximately 8,300 (or 68%) of all student loan complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (17%), found to be incomplete (12%), or are pending with the consumer or the CFPB (2% and 2%, respectively). "The Bureau began handling Federal student loan servicing complaints on February 25, 2016. The Bureau does not handle complaints about financial aid eligibility or Federal student loan origination (getting a loan). 31 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 14: TYPES OF STUDENT LOAN COMPLAINTS REPORTED BY CONSUMERS 670A Dealing with my lender or servicer Cant r epay my loan 30% Gett ng a loan TABLE 9 TYPES OF STUDENT LOAN COMPLAINTS REPORTED BY CONSUMERS Types of student loan complaints Dealing with lender or servicer (Making payments, getting information about my loan. Managing my account) 67% Can't repay my loan (Fees, default, bankruptcy, billing, deferment, forbearance, fraud, credit reporting) 30% Getting a loan (Confusing terms, rates, denial, confusing advertising or marketing, sales tactics or pressure, financial aid services, recruiting) 2% Total Student Loan Complaints 100% The most common type of student loan complaint's related to dealing with a lender or servicer and includes issues such as making payments, getting information about a loan, and managing an account. Borrowers continued to report issues involving loan servicing, including payment processing problems, difficulty in obtaining documented loan account history, inaccurate account status, and customer service experiences when inquiring on repayment options. More frequently than other issues, non-federal and federal student loan borrowers expressed their concerns relating to trouble with how payments are handled. Borrowers complained of misapplied payments and inaccurate accounting of payments. Some borrowers complained of misapplication of payments and reported that payments were not applied to specified accounts, but rather applied to all accounts managed by the servicer. Some federal student loan borrowers reported that when contacting their loan servicers regarding financial distress, servicers provided them with information on hardship forbearance or deferment, instead of more beneficial options like income-driven repayment plans. Also, confusion on the difference between forbearance and deferment options was expressed by 32 CONSUMER FINANCIAL PROTECTION BUREAU borrowers of private and federal loans. Federal student loan borrowers complained of difficulty enrolling in income-driven repayment plans. Borrowers reported lost documentation, extended application processing times, and unclear guidance when seeking to switch from one income-driven repayment plan to another. Additionally, federal student loan borrowers described their experiences when trying to obtain guidance in completing annual income recertification for their income-driven repayment plan. These borrowers reported receiving insufficient information from their servicers to meet recertification deadlines and lengthy processing times. Non-federal and federal student loan borrowers reported issues of incorrect reporting of their loans to the credit reporting companies. Borrowers stated that their loan accounts were paid in full or not in a delinquent status but were being reported negatively. Some borrowers reported being contacted by collection companies for accounts that had been paid in full or for debts that were not owed. 3.9 Consumers' payday loan complaints In addition to the 7,300 payday loan related debt collection complaints reported in section 3.2, figures is and 16 and Table 10 show the types of payday loan complaints reported by consumers for the approximately 4,400 payday loan complaints the CFPB has handled. Approximately 1,800 (or 41%) of all payday complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (41%), found to be incomplete (13%), or are pending with the consumer or the CFPB (1% and 4%, respectively). 33 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 15 TYPES OF PAYDAY LOAN COMPLAINTS REPORTED BY CONSUMERS Cannot contact lender Charged fees or interest I did not expect 30%, Received a loan I did not apply for 14% Applied for a can but didn't receive money Payment to account not credited Can't stop lender from chargmg my hank account Lender Hempen my hank accol int on wrung day or for wrong amount FIGURE 16 TYPES OF PAYDAY LOANS CONSUMERS COMPLAIN ABOUT Online 56% Not stated In person or at a store 30%, 14M Of the 4,400 payday loan complaints submitted by consumers, approximately 56% were about problems consumers reported experiencing after obtaining (or attempting to obtain) a payday loan online. Approximately 14% reported problems when obtaining a payday loan in person or at a store. For the remaining approximately 30% of complaints, the consumer did not indicate how the loan was obtained. 34 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 10. TYPES OF PAYDAY LOAN COMPLAINTS REPORTED BY CONSUMERS, BY TYPE OF LOAN Types of Payday Complaints In person / at the store Online Not stated Total Cannot contact lender 13% 44% 43% 31% Charged fees or interest I did not expect 14% 70% 17% 30% Received a loan I did not apply for 7% 41% 52% 14% Applied for a loan, but didn't receive money 11% 65% 24% 7% Payment to account not credited 29% 53% 18% 7% Can't stop lender from charging my bank account 21% 67% 12% 7% Lender charged my bank account on wrong day or for wrong amount 29% 61% 10% 4% The most common type of payday loan complaint received in 2016 is about problems with contacting the lender. Consumers also commonly complained about being charged unexpected fees or interest and receiving loans for which they did not apply. Table to illustrates the types of issues reported by consumers based on the reported source of the loan. The remaining complaints involved issues identified in zms that continued into 2016, such as payment issues surrounding check holding and electronic debit authorization that hands control of the consumer's bank account over to the lender. Some consumers complained that the payday lender re-presented a check several times, causing their account to incur multiple insufficient funds or overdraft fees. Consumer confusion relating to repayment terms was frequently expressed. These consumers complained of the lack of clarity about repayment of the loan using automatic withdrawal features on a bank card, on a prepaid card, or by direct deposit. Consumers with multiple advances stated their difficulty managing a short repayment period and more often rolled-over the loan, resulting in an inflated total cost of the loan. The cost and structure of a particular loan can make it difficult for consumers to repay. Consumers raised concerns such as the risk of being unable to repay the loan while still having 35 CONSUMER FINANCIAL PROTECTION BUREAU enough money left over for other expenses, the high cost of the loan, and aggressive debt collection practices in the case of delinquency or default. 3.10 Consumers' prepaid card complaints Figure 17 and Table ii show the types of prepaid card complaints reported by consumers for the approximately 2,500 prepaid card complaints the CFPB has handled. Approximately 1,300 (or 50%) of all prepaid complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (37%), found to be incomplete (8%), or are pending with the consumer or the CFPB 0% and 4%, respectively). FIGURE 17: TYPES OF PREPAID CARD COMPLAINTS REPORTED BY CONSUMERS 33 3/: Unauthorized Vansections or other transaction issues Managing open rig or closing yOUi account 290A Fraud or scam 22'n Fees Advertising marketing or disclosures Adding money Overdraft savings or rewards features 36 CONSUMER FINANCIAL PROTECTION BUREAU 2% TABLE 11: TYPES OF PREPAID CARD COMPLAINTS REPORTED BY CONSUMERS Types of prepaid card complaints Unauthorized transactions or other transaction issues 33% Managing, opening, or closing your account 29% Fraud or scam 22% Fees 7% Advertising, marketing, or disclosures 4% Adding money 4% Overdraft, savings or rewards features 2% Total Prepaid Card Complaints 100% The most common type of prepaid card complaint involved unauthorized transactions or other transaction issues. Another common type of complaint was about managing, opening, or closing a prepaid card account. Consumers complained that they were unable to access funds loaded on their prepaid cards for extended periods of time. Frequently, these consumers also expressed hardships resulting from the lack of access to their funds. Some consumers stated that after disputing a particular charge, the company would often freeze the entire available balance to prevent further loss while the claim was under review. During the review process, companies sometimes requested additional information—such as purchase receipts or original packaging—which the consumer often stated was no longer in their possession. Consumers reported difficulty using prepaid cards. Some of these consumers stated that their cards were cancelled without notification. Consumers stated that they had to contact the company numerous times before a new card was issued. Consumers who received a prepaid card as a refund complained that they were unable to activate the card, access the funds, or both. Subsequently, for some of these consumers, dormancy fees were assessed, depleting the card balance. 37 CONSUMER FINANCIAL PROTECTION BUREAU Consumers reported that companies sometimes issued cards without proper verification resulting in theft of their funds. These consumers stated they experienced prolonged investigations of their claims, leaving them without access to their money for extended periods of time. Consumers raised issues involving the management of prepaid card accounts. In some of these complaints, consumers reported balance discrepancies for cards, especially if they were unable to check their balance and transaction history online or were not provided with statements. Consumers also complained of delayed credits to their prepaid card after notifying the company of a fraudulent or unauthorized charge or after a purchase had been cancelled or returned. 3.11 Consumers' money transfer complaints Figures 18 and 19 and Table 12 show the types of money transfer complaints reported by consumers for the approximately 2,300 money transfer complaints the CFPB has handled. Approximately 1,60 0 (or 68%) of all money transfer complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (22%), found to be incomplete (7%), or are pending with the consumer or the CFPB (0.9% and 3%, respectively). FIGURE 18: TYPES OF MONEY TRANSFERS CONSUMERS COMPLAIN ABOUT noinostib HS) rnonpy transfor 57% International monpy Iransfer 43% FIGURE 19: TYPES OF MONEY TRANSFER COMPLAINTS REPORTED BY CONSUMERS Fraud or scam 36'/ 28% Other transaction issues Money was net available when promised Other serv ce issues Wrong amo_mt charged or received Incorrect or missing disclosures or info 38 CONSUMER FINANCIAL PROTECTION BUREAU 19% 9% TABLE 12: TYPES OF MONEY TRANSFER COMPLAINTS REPORTED BY CONSUMERS Types of money transfer complaints Fraud or scam 36% Other transaction issues (Unauthorized transaction, cancellation, refund, etc.) 28% Money was not available when promised 19% Other service issues 9% Wrong amount charged or received 4% Incorrect or missing disclosures or info 4% Total Money Transfer Complaints 100% The most common type of money transfer complaint is about fraud or scams. Many of these consumers complained that they sent money to a seller but did not receive the items they purchased in return. Other complaints involved consumers who frequently remit money to family members both domestically and internationally. A number of these consumers stated that they regularly used money transfers to provide for family members' basic living expenses. They often reported that the transfer recipients did not receive the money transfer, the amount received was smaller than expected, or the transfer encountered significant and unanticipated delays. Consumers attempting to complete transactions through an online money transfer service often reported encountering problems with the dispute resolution process. Sellers describe several scenarios where they did not receive payments after sending the item to the buyer. This often occurred when the seller was told that the payment had been accepted, but was later cancelled. Cancellation was done either by the buyer due to a dispute or by the financial institution because of insufficient funds in the buyer's account. Consumers reported that money transfer service providers placed holds on accounts without providing them with an explanation. Companies commonly reported that the hold was placed as a result of a risk-based model that will hold reserves on accounts in order to cover potential 39 CONSUMER FINANCIAL PROTECTION BUREAU losses arising from reversals or chargebacks Consumers who submitted complaints about international money transfers commonly reported delays and restrictions when attempting to make transfers. Many of these complaints are the product of company risk-based assessments, reviewed for compliance with United States regulations administered by the Office of Foreign Assets Control and consumer identification efforts. Consumers often complained that companies did not provide an adequate explanation of the process. 3.12 Other financial services complaints Figure zo and Table 13 show the types of other financial service complaints reported by consumers for the approximately 2,100 other financial services complaints the CFPB has handled. Approximately 500 (or 22%) of all other financial services complaints handled by the CFPB in 2016 were sent by Consumer Response to companies for review and response. The remaining complaints have been referred to other regulatory agencies (57%), found to be incomplete (13%), or are pending with the consumer or the CFPB (1% and 7%, respectively). FIGURE 20: TYPES OF OTHER FINANCIAL SERVICE COMPLAINTS REPORTED BY CONSUMERS 58% Fraud or Scam Customer service or customer relations 15% Unexpected or other Fees 7 to Fxcessive Fees 7 to 4 Advertising and marketing Disclosures [ astor stolen check Lost or stolen money order Incorrect exchange rate 40 3 to 2 1 'D 0 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 13: TYPES OF OTHER FINANCIAL SERVICE COMPLAINTS REPORTED BY CONSUMERS Types of other financial service complaints Fraud or Scam 58% Customer service/Customer relations 16% Unexpected/Other Fees 7% Excessive Fees 7% Advertising and marketing 4% Disclosures 3% Lost or stolen check 2% Lost or stolen money order 1% Incorrect exchange rate OM% Total other financial services 100% The majority of the other financial service complaints were about debt settlement, refund anticipation check, and credit repair. Some consumer complaints about debt settlement are related to debt collection and consumers' attempts to reduce their debt balance with their original creditor. Many of these complaints involved consumer reports of possible fraud or scams. Consumers reported making good faith payments to debt relief companies to pay off existing debt to creditors. Some of these consumers state that the payments were never forwarded to their creditors and they are now facing lawsuits for accounts they presumed were paid. Consumers who submitted check cashing complaints frequently mentioned the high costs. 'rhis was especially common for consumers who don't have a bank account at the institution where they were attempting to cash the check. A number of these consumers also complained about being unable to cash checks. In many instances, these checks were not cashed because of recommendations made by check authorization and warranty companies. Consumers also complained about difficulties redeeming money orders and about problems 41 CONSUMER FINANCIAL PROTECTION BUREAU encountered when money orders were lost. In many of these complaints, consumers expressed dissatisfaction with the error resolution processes available to them and the length of time required to resolve errors. Money order, traveler's check/cashier's check, and foreign check complaints frequently involved consumers who believed that they were victims of a scam. These complaints involved common scams, such as those that involve providing advance payment before goods are delivered or services are rendered. Scam victims may be unable to secure redress from their financial institutions. Consumers looking to repair their credit expressed concern of being scammed by credit repair companies after no relief was provided and requests for reimbursement went unacknowledged. 3.13 How companies respond to consumer complaints Approximately 196,900 (or 68%) of all complaints handled by the CFPB between January 1, 2016, and December 31, 2016, were sent by Consumer Response to companies for review and response:1 Table 14 shows how companies responded to these complaints during this time period. Company responses include descriptions of steps that have been or that will be taken, communications received from the consumer, any follow-up actions or planned follow-up actions, and a categorization of the response. Response category options include "Closed with monetary relief," "Closed with non-monetary relief," "Closed with explanation," "Closed," "In progress," and other administrative options. "Monetary relief' is defined as objective, measurable, and verifiable monetary relief to the consumer as a direct result of the steps that have been or that will be taken in response to the complaint. "Closed with non-monetary relief' 12 The remaining complaints have been referred to other regulatory agencies (21%), found to he incomplete (8%), or are pending with the consumer or the CHT (1% and 2%, respectively). 42 CONSUMER FINANCIAL PROTECTION BUREAU indicates that the steps taken by the company in response to the complaint did not result in monetary relief to the consumer that is objective, measurable, and verifiable, but may have addressed some or all of the consumer's complaint involving non-monetary requests. "Nonmonetary relief' is defined as other objective and verifiable relief to the consumer as a direct result of the steps that have been or that will be taken in response to the complaint. "Closed with explanation" indicates that the steps taken by the company in response to the complaint included an explanation that was tailored to the individual consumer's complaint. For example, this category would be used if the explanation substantively meets the consumer's desired resolution or explains why no further action will be taken. "Closed" indicates that the company closed the complaint without relief — monetary or non-monetary — or explanation. Consumers are given the option to review and provide feedback about all company closure responses. Companies have responded to approximately 94% of complaintso sent to them and report having closed 9o% of the complaints sent to them in 2016. Table 14 shows how companies have responded. 13 Companies have responded to approximately 185,900 of the 196,900 sent to them for response. 43 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 14 HOW COMPANIES HAVE RESPONDED TO CONSUMER COMPLAINTS Closed with monetary relief Closed Closed Closed Administwith non- with (without rative monetary explanation relief or response relief explanation) Company reviewing Company did not provide a timely response Debt collection <1°/0 12% 70% 3% 3% 4% 8% Credit reporting <1°/0 22% 70% <1% 3% 4% <1% Mortgage 3% 3% 82% 2% 3% 5% 2% Bank account or service 18% 8% 62% 2% 1% 5% 4% Credit card 20% 10% 63% <1% 2% 4% 1% Consumer loan 5% 7% 72% 2% 2% 5% 6% Student loan 3% 6% 85% <1% <1% 3% 2% Payday loan 3% 2% 66% 3% 14% 2% 10% Prepaid 21% 6% 64% 2% 2% 4% 1% Money transfer 9% 5% 76% 1% <1% 5% 3% Other financial service 10% 2% 63% 5 1% 6% 12% All 6% 11% 72% 2% 3% 4% 3% 44 CONSUMER FINANCIAL PROTECTION BUREAU Companies have the option to identify their responses to particular complaints as being "Closed with non-monetary relief' when they provide non-monetary relief in response to complaints. In such cases, consumers have received a range of non-monetary relief, such as: providing mortgage foreclosure alternatives that do not have direct monetary value to the consumer, but that help them keep their home; stopping harassment from debt collectors; cleaning up consumers' credit reports by correcting submissions to credit bureaus; restoring or removing a credit line from a credit file; • correcting account information, including in credit reports; and • addressing formerly unmet customer service issues. Companies also have the option to report an amount of monetary relief, where applicable. In 2016, companies provided relief amounts in response to 11,330 complaints. For companies which have reported monetary relief, the median amount of relief reported was $141; however, the amount varies by product, ranging from a median of $500 in relief for mortgage complaints to $29 in relief for credit reporting complaints. 45 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 15: MONETARY RELIEF REPORTED BY COMPANIES Product Number of complaints Median amount Debt collection 360 $316 Credit reporting 150 $29 Mortgage 1,190 $500 Bank account or service 4,060 $108 Credit card 4,250 $105 Consumer loan 530 $200 Student loan 250 $245 Payday loan 60 $375 Prepaid 270 $200 Money transfer 150 $205 Other financial service 50 $323 Overall 11,330 $141 3.14 Consumers' feedback about companies' responses Once the company responds, the CFPB provides the company's response to the consumer for review. Where the company responds "Closed with monetary relief," "Closed with non-monetary relief," "Closed with explanation," or "Closed," consumers are given the option to provide feedback on the company's response. Figure 21 shows how consumers responded to the approximately 176,800 complaints where they were given the option to provide feedback. Approximately 18% of consumers disputed the response provided by the company, while approximately 67% did not dispute the response during the feedback period. The rest were pending with consumers at the end of December 31, 2016. 46 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 21: CONSUMER FEEDBACK ABOUT COMPANY RESPONSES Debt collection 18% 15% Credit reporting Mortgage Bank account or service Credit card 21% 17% 21% Consumer loan 21% Student loan 20% Payday loan 14% Prepaid 16% Money transfer Other financial service All 16% 22% 18% Pending consumer review of companys reported resolution • Consumer disputed companys reported resolution Consumer did not dispute companys reported resolution 3.15 Consumer Response investigation and analysis Consumer Response analyzes consumer complaints, including the accuracy, completeness, and timeliness of a company's responses as well as consumers' feedback about that company's responses, to ensure that consumers receive timely responses to their complaints and that the Bureau and other regulators, consumers, and the marketplace have the complaint information needed to improve the functioning of the consumer financial markets for such products and services. Consumer Response uses a variety of approaches to analyze consumer complaints including, for example, cohort and text analytics to identify trends and possible consumer harm. 47 CONSUMER FINANCIAL PROTECTION BUREAU Complaint analysis may prompt investigation of individual complaints or groups of complaints and possible referral to colleagues in the CFPB's Division of Supervision, Enforcement, and Fair Lending & Equal Opportunity for further consideration. Consumer Response shares complaint data, analyzes, and offers insights to other offices to help the Bureau: • Understand problems consumers are experiencing in the marketplace and the impact of those experiences on their lives; Develop tools to empower people to know their rights and protect themselves; • Scope and prioritize examinations and ask targeted questions when examining companies' records and practices; Identify and stop unfair practices before they become major issues; and • Investigate issues and take action when we find problems. 3.16 Conclusion Listening to consumers and reviewing and analyzing their complaints is an integral part of the CFPB's work in understanding issues in the financial marketplace, and helping the market work better for consumers. The information shared by consumers and companies throughout the complaint process informs the Bureau about business practices that may pose risks to consumers and helps the Bureau in its work to supervise companies, to enforce Federal consumer financial laws, to write better rules and regulations, and to educate and engage consumers. 48 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 22: COMPLAINTS HANDLED FROM JULY 21, 2011, THROUGH DECEMBER 31, 2016 (BY STATE, AND THE DISTRICT OF COLUMBIA) Complaints 1,000 ME 150,000 3,516 WI VT NH 12,182 1,724 WA ID MT ND MN IL MI NY MA 21,902 3,988 1,927 1,076 12,238 38,140 27,204 69,138 19,611 4496 OR NV WY SD IA IN OH PA NJ CT RI 12,430 13,536 1,158 1,624 5,128 12,673 32,963 38,279 40,574 11,899 3,385 CA UT CO NE MO KY WV VA MD DE 140488 6,255 18,141 3491 1A841 8,592 3,045 33,606 32555 5,477 AZ NM KS AR TN NC SC DC 23,310 5,732 5,875 5,038 17,759 29,841 14,420 6,242 OK LA MS AL GA 8,029 11,999 5,784 12,050 44,315 49 HI AK FL 3,812 1409 104,285 CONSUMER FINANCIAL PROTECTION BUREAU April 7,2017 The Honorable Maxine Waters Ranking Member Committee on Financial Services United States House of Representatives 4340 Thomas P. O'Neill. Jr. House Office Building Washington, DC 20515 Dear Ranking Member Waters: Enclosed please find the Consumer Financial Protection Bureau's Office of Minority and Women Inclusion Annual Report to Congress, as required under Section 342(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Should you have any questions about the enclosed report, please contact meal (202) 435-9711. Sincerely, / Catherine Galicia Assistant Director for Legislative Affairs itier1111,111 March 2017 Office of Minority and Women Inclusion Annual Report to Congress u hc1" la Consumer Financial Protection Bureau Message from Richard Cordray Director of the CFPB lam pleased to share the 2016 Diversity and Inclusion Annual Report, which outlines the CFPB's demographic diversity as well as the strategies and initiatives in place to ensure that the Bureau is diverse and inclusive in all areas of its operations. The report also addresses efforts to fulfill statutory mandates to increase opportunities for minority-owned and women-owned businesses and to assess diversity practices in entities regulated by the Bureau. The focus on diversity and inclusion in the Bureau is developed and implemented under the leadership of the Office of Minority and Women Inclusion (0MWD. This report is presented to fulfill the Bureau's statutory responsibilities and its commitment to accountability pursuant to Section 342(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. § 5452)(e). Sustainability is an underlying driver of the Bureau's diversity and inclusion strategy. To ensure sustainability, we systematically work to integrate diversity and inclusion into the policies, procedures, processes and culture of the Bureau. In doing so, attending to diversity and inclusion has become a routine part of the way the Bureau functions, thereby ensuring lasting impact. While the diversity and inclusion work is spearheaded by OMWI, the implementation takes place in all areas of the Bureau and throughout its divisions with specific points of collaboration with the Office of Civil Rights (OCR), the Office of Human Capital (OHC), the Procurement Office, the Strategy Office, the Workforce of the Future Committee, and various Bureau-wide committees, such as the Executive Advisory Council and the Diversity and Inclusion Council of Employees. Our diversity and inclusion initiatives for 2016 were focused in the following broad areas: increasing the diversity of our workforce; ensuring that the work environment is inclusive and CONSUMER FINANCIAL PROTECTION BUREAU hospitable for all employees; expanding our supplier diversity focus; and preparing to implement the Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies ("Joint Standards"), developed collaboratively by the Bureau, the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Securities and Exchange Commission, to assess the diversity policies and practices of entities regulated by these agencies. This year, Tarn especially pleased with the progress we have made in our workplace diversity initiatives. In our approach to diversity and inclusion at the Bureau, we have focused on integrating diversity and inclusion into the fabric of the Bureau's organizational structure and functions. Among our accomplishments this year are the following: • Increased collaboration between OHC and OMWI to incorporate diversity and inclusion competencies into our leadership and employee training, job descriptions, and performance objectives; • Incorporated diversity and inclusion goals into division-level strategic plans and built-in accountability measures to meet those goals by reporting on progress on our meetings with the divisions; Enhanced required training for managers to help them better lead the diversity and inclusion efforts in their divisions, and for all non-supervisory employees to strengthen their awareness of diversity and inclusion in their work and interactions; Strengthened our effectiveness in attracting and retaining an increasingly diverse staff through collaborative efforts between OHC, OMWI, and OCR; and • Initiated contact with entities we regulate to begin discussing the Joint Standards for assessing their diversity policies and practices. One of the many ways we track our progress is through our annual employee survey (AES). The I hcps://comsfederalregisteNgov/articlesin' 5/06/10/20' 5T4126/jointotandardstocassessingThe-diversitysoli ci es-a nd-practi cesaTentiti es-regulated-by-the 2 CONSUMER FINANCIAL PROTECTION BUREAU 2016 results reflect our continued overall upward trend in employee ratings on inclusion and on commitment to the Bureau's mission. While we are pleased with the progress we have achieved, we are aware that our work to build a fully diverse and inclusive workplace is not done. Our employees span a wide spectrum of demographic groups, and as a result, establishing an inclusive workplace culture with shared norms and values is an ongoing and evolving effort for all of us. The dedication and commitment that our employees from all backgrounds have to our mission continues to be an important asset upon which we rely to accomplish our goals. Sincerely, ilika9 Col46tri? Richard Cordray 3 CONSUMER FINANCIAL PROTECTION BUREAU Message from Stuart lshimaru Director of OMWI Over the past year, the Office of Minority and Women Inclusion (OMWI) has continued to focus on building a diversity and inclusion strategy that is integrated into the fabric of our organizational culture and the work that the Bureau does for all consumers. The approaches OMWI has used were designed to ensure sustainability of diversity and inclusion as core aspects of the Bureau's overall operations. Attention to diversity and inclusion is important to all staff and has been proven to help increase the effectiveness of our teams, to drive innovative thinking, and to help ensure that Bureau programs and services have relevance for consumers2. This report details the approaches that have been used to build sustainability of diversity and inclusion as well as the specific programs and initiatives that OMWI has developed, implemented and collaborated on, over the past year in our key areas of focus: workforce diversity and inclusion, supplier diversity, and diversity within our regulated entities. Bureau-wide workforce diversity and inclusion initiatives have been central to our strategic 2 How Diversity Can Drive Innovation, Sylvia Ann Hewlett, Melinda Marshall, Laura Sherbin, Harvard Business Review, December, 2013. 4 CONSUMER FINANCIAL PROTECTION BUREAU planning process. In addition to the OMWI diversity and inclusion strategic plan, the Bureau has instituted a Bureau-wide diversity and inclusion strategic plan. The diversity and inclusion strategy remains one of the areas of focus in the Bureau-wide Government Performance and Results Act report (GPRA). Each division has a diversity and inclusion goal, initiatives and outcomes in its divisional strategic plan. OMWI has begun to work with each division on setting and implementing its divisional diversity and inclusion goals and the framework that has been established for divisions to provide periodic reports to the Bureau's leadership team. OMWI is pleased to continue to work with the diverse supplier industry to provide information on how the federal contracting process works, and on opportunities available to bid on contracts with the CFPB. Similarly OMWI is pleased to have spearheaded a roundtable discussion with members of the mortgage industry to better learn about current diversity and inclusion challenges that they face. In the coming year, OMWI will continue to work closely with each division on developing and implementing their diversity and inclusion efforts; providing training and consultation to managers and staff to support their efforts; expanding our outreach to the vendor community and working with the CFPB Office of Procurement to ensure minority-owned and women-owned businesses are aware of, and considered for contracting opportunities with the Bureau; and developing and providing diversity best practices information to the entities we regulate. While we are pleased with the overall progress on our diversity and inclusion initiatives, we acknowledge that there are additional areas that can be addressed to improve the overall diversity and inclusion culture of the Bureau, and we look forward to continuing to do so. Sincerely, / Stuart Ishimaru 5 CONSUMER FINANCIAL PROTECTION BUREAU Table of contents Message from Richard Cordray 1 Message from Stuart Ishimaru 4 Table of contents 6 1. Executive summary 8 2. Introduction 10 3. Workforce diversity 13 4. 5. 6 3.1 Demographics of current workforce 13 3.2 Demographics of mission critical occupations 16 3.3 New hires: Permanent 23 3.4 Separations (Permanent workforce) 25 3.5 Outreach and recruitment 26 3.6 Promotions 28 Workforce inclusion 30 4.1 Training and leadership development 39 4.2 Performance management 41 4.3 Reviews of CFPB programs 41 Supplier Diversity CONSUMER FINANCIAL PROTECTION BUREAU 45 5.1 Minority-owned and women-owned businesses 45 5.2 Interagency collaboration on supplier diversity initiatives 54 5.3 Supplier diversity training and resources 55 5.4 Outreach for supplier diversity 55 6. Regulated entities 57 7. Summary of Major Accomplishments, Challenges and Next Steps 59 7.1 Major accomplishments 59 7.2 Challenges and next steps 60 Appendix A. Recruitment outreach 63 63 Appendix B• Heritage months diversity events 67 67 Appendix C. Organizations with which OMWI had outreach engagements 7 CONSUMER FINANCIAL PROTECTION BUREAU 68 68 1. Executive summary At the Consumer Financial Protection Bureau (CFPB or Bureau), the focus on diversity and inclusion is an important aspect of the overall drive to achieve the Bureau's mission. The Bureau draws on its diversity and inclusion in developing innovative approaches to protecting the financial interests of all consumers. In so doing, the Bureau has taken deliberate steps to incorporate strategies for supporting diversity and inclusion into its functioning with a view toward ensuring the sustainability of the changes in this area. The Bureau's diversity and inclusion strategic plan is built on five broad areas of focus: Workforce Diversity, Workplace Inclusion, Sustainability, Minority and Women Owned Businesses, and Diversity Practices of Regulated Entities. The definitions of workforce diversity and inclusion are constructed broadly to encompass all employees. The strategies are designed with particular emphasis on incorporating diversity and inclusion into the routine functioning of the Bureau, thereby ensuring its sustainability for years to come. The Bureau's diversity and inclusion initiatives are driven by best practices in the fields of diversity and inclusion, human capital management, legal compliance, and by data. The data sources used include, among others, the Annual Employee Survey (AES), particularly the Inclusion Quotient (IQ), and analyses of employee data on hiring, promotions, separations, performance management and training. In 2016, under the leadership of OMWI, the CFPB continued to implement strategies from previous years while adding a number of new initiatives to further the work of building a diverse and inclusive workplace and meeting the mandates related to supplier diversity and for assessing the diversity practices of the entities regulated by the Bureau. The following are some of the key accomplishments and initiatives that the Bureau focused on in 2016: • Created the Non-Discrimination and Inclusion Policy for Transgender Applicants and Employees. • 8 Created the Employee Resource Group Policy and launched two new Employee Resource CONSUMER FINANCIAL PROTECTION BUREAU Groups (ERGs). • Recognized by the Professional Diversity Network, the Partnership for Public Service and the disABLED magazine for having innovative diversity policies and practices. • Implemented steps to have a diversity and inclusion goal in divisional strategic plans, and established a process for reporting on progress in this area. Continued efforts to foster an inclusive work environment for employees through initiatives and engagements such as: educational and interactive training programs; cultural events; development of a cross-Bureau employee diversity and inclusion council, the Diversity Inclusion Council of Employee (DICE); implementation of efforts to strengthen organizational cultural norms, done by a dedicated cross-Bureau working group, The Workforce of the Future Committee (WFF); and the solicitation of advice and counsel from a diversity and inclusion leadership group, the Executive Advisory Council (EAC) which champions strategies to incorporate diversity and inclusion throughout the Bureau. Analyzed employee data to understand the experiences of demographic groups in the Bureau and to ensure that the impact of policies and practices are equitable for all groups. Began implementation of efforts related to the joint standards for assessing diversity practices at the entities the Bureau regulates. While the Bureau has made noteworthy progress in 2016, there is also a clear understanding that there is more work to be done, and the Bureau confidently faces new challenges with the innovation and dedication needed to address them. 9 CONSUMER FINANCIAL PROTECTION BUREAU 2. Introduction The CFPB is presenting this annual report in fulfillment of its statutory responsibility and its commitment to accountability, pursuant to Section 342(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). This report provides detailed information about the CFPB's diversity and inclusion strategy and initiatives from January 1, 2016 through December 31, 2016, unless otherwise noted. The report presents a comprehensive view of diversity and inclusion at the Bureau. It includes work spearheaded by OMWI, as well as work done in collaboration with the Office of Civil Rights (OCR), the Office of Human Capital (01-1C), the Office of Procurement and the Bureau's divisions. The initiatives undertaken served to integrate diversity and inclusion into the Bureau's routine functioning thereby ensuring their sustainability and lasting impact. The CFPB was created to provide a single point of accountability for enforcing federal consumer financial laws and protecting consumers in the financial marketplace.3 In order to serve the interests of all groups of consumers, it is critical that the CFPB understands how consumers of different backgrounds, cultures, perspectives, experiences and interests interact in the financial marketplace within the context of wide ranging backgrounds, cultures, perspectives, experiences and interests. Additionally, in keeping with its mandates, the Bureau is committed to promoting diversity and inclusion within its workplace, in the suppliers with whom it does business and in the financial entities that it regulates. At the CFPB, "diversity" and "inclusion" are defined as follows: • Diversity, the range of differences including backgrounds, identities (including but not 3 haps:Mt./my consumerfmance,govhbout-usiche-bureau/ 10 CONSUMER FINANCIAL PROTECTION BUREAU limited to, race, ethnicity, age, sexual orientation, disability, gender, gender identity, religion, disability, and sex), perspectives, and working styles that employees and stakeholders bring to the CFPB to better serve consumers.° • Inclusion: the process of fostering a collaborative, flexible, and fair environment in which all employees feel valued and empowered to share their views and ideas to inform the CFPB's work, and which allows us to leverage the broad talents of our diverse workforce., Diversity and Inclusion Vision Statement: The Bureau works to incorporate diversity and inclusion in all areas of its work and work environment. Its vision statement for diversity and inclusion conveys the significance of that connection to the Bureau's overall mission. "We value diversity and Mclusion and drive innovation by leveraging the talents and perspectives of the CFPB's diverse workforce and stakeholders to best protect the Manual interests of all consumers." The Bureau's diversity and inclusion approach is implemented under the broad goals of the Bureau's Diversity and Inclusion Strategic Plan for 2016 -20206, which are covered in this report: Workforce Diversity 4 • Workplace Inclusion • Sustainability • Minority and Women Owned Businesses (covered under the heading of Supplier https'//s3 aniazonwis com/files consumerfirvince ov/f/documents/2016" cfpb diversit strafe lc- lan-2016-2020 df 5 https //s3 amazonavis com/files constimerfinance gov/f/docriments/201611 cfph divery(y-and-inclusionstrategic-plan-20113-2020 mil 6 https //s3 arriazomau?s corn/files consume' fillanc, gov/f/docurnents/2016" cfpb diversiLy-and-inclusionsLrat,61c-plan-2016-2020 pdf 11 CONSUMER FINANCIAL PROTECTION BUREAU Diversity) Diversity Practices of Regulated Entities Ensuring that the diversity and inclusion efforts are woven into all areas of the Bureau's work and work environment is an important aspect of the Bureau's overall approach. As a result, the Bureau's focus on sustainability shapes the approaches used to embed the initiatives, outputs and outcomes into the fabric of the Bureau, for lasting impact. This report is organized into the following four broad goals: 1) Workforce Diversity, 2) Workplace Inclusion, 3) Supplier Diversity (including Minority-owned and Women-owned businesses) and 4) Regulated Entities. Sustainability, the fifth goal, as a recurring and connective theme throughout all four. 12 CONSUMER FINANCIAL PROTECTION BUREAU 3. Workforce diversity 3.1 Demographics of current workforce The Bureau is committed to understanding and drawing upon the broad range of backgrounds, cultures, perspectives and experiences of its employees, to serve the interests of consumers and to make sure that consumers are treated fairly in the financial marketplace. Having a workforce that is diverse, is essential to carrying out the mission, and helps the Bureau to create innovative solutions that are relevant to all segments of consumers. Therefore the Bureau fosters diversity and inclusion in recruitment, hiring, career development, employee engagement and all other areas of the workplace culture and operations. As a result, workforce diversity is one of the five goals of the Bureau's Diversity and Inclusion Strategic Plan and is defined as: recruiting from a diverse group of potential applicants to develop a high-performing workforce drawn from all segments of American society7. Following are demographics8 of a) the Bureau's total workforce, b) employees in permanent positions, and c) employees in Mission Critical Occupations. vamiva 8 Data consu merfi nance..govid ata-research/research -reports/cfpb-d 'versify-and -Inclusion-strategic-plan-2016-2020. are reported in keeping with OMB standards which allow individuals to identify ethnicity as well as race separately. For example, Two or More Races" could be read to indicate an ethnicity (i.e.: hispanic) and a race. The methodology used for the Ethnicity and Race Indicator (E RI) varies in this report from the methodology used in the MD-715.In this report, individuals who selected two or more races (e.g., Asian and White), were counted as Two or More Races. 13 CONSUMER FINANCIAL PROTECTION BUREAU In 2016, the CFPB had a workforce of 1633 employees, consisting of 833 men and 800 women, an increase of 124 employees from 2015, after accounting for turnover. There was a slight increase of 1.81% in the percentage of minority ethnic and race indicator (ERI)9 employees from 35.85% in 2015 to 37.66% in 2016, with a corresponding slight decrease in white employees. There was a slight increase in the percentage of female employees, up 0.94% from 48.05% in 2015 to 48.99% in 2016, with a corresponding slight decrease in male employees. Compared to the U.S. Census Civilian National Labor Force (CLF), overall CFPB demographics have not changed significantly since fiscal year (FY) 2015.10 White men, followed by White women, comprise the largest racial groups in CFPB, followed by Black women and Black men, respectively. TABLE 1: TOTAL /0 0 CALENDAR YEAR 2016 TOTAL WORKFORCE11 BY GENDER, RACE AND ETHNICITY12 ix TWO OR TOTAL HISPANICI3 WHITE BLACK ASIAN NH/OPI14 Al/AN 1633 96 1018 324 142 3 5 45 100% 5.87% 62.34% 19.84% 8.70% 0.18% 0.31% 2.76% MORE16 ERI: OPM uses Ethnic and Race Indicator (ERI) to include employees who are Hispanic, Black, Asian, Native Hawaiian/Other Pacific Islander (NH/ON), American Indian/Alaska Native (AI/AN) and employees of Two or More races. https:J/www.Iedscope.opm.gpvlrno/eri.asp. 10 The CLF is derived from the 2006-2010 American Community Survey (ACS) Equal Employment Opportunity Tabulation (EEO Tabulation). The EEO Tabulation was originally released by the U.S. Census Bureau on November 29, 2012. It provides external benchmarks to assist federal agencies in monitoring employment practices and enforcing workforce civil rights laws. Federal agencies are required to use the EEO Tabulation in preparing their annual MD-71S EEO Program Status reports. See https://oroord .eeoc.gov//federa lid i recti ves/tech ass ista nce_06.10 EEO_ta [au Ia tic II.r Ina 11 Total workforce encompasses employees on permanent and temporary appointments including interns. 12 1n the data tables in this report, total percentages across rows may not always equal 100% due to rounding. 13 Hispanics who also identify by a race are only counted as Hispanic here. Id NI/OPI: Native Hawaiian/Other Pacific Islander. 15 AI/AN: American Indian/Alaska Native, In all of the tables with demographic data, the methodology used for the ethnicity and race indicator (ERI) varies in this report from the methodology used in the MD-715. For individuals who selected Two or More Races (e.g., Asian and White), they a re counted as two or more races for purposes of this report. 16 14 CONSUMER FINANCIAL PROTECTION BUREAU TOTAL HISPANIC13 WHITE BLACK ASIAN NH/OPI Th Al/ANI5 TWO OR MORE16 Commu nity Labor 9.96% 72.36°4 12.02% 3.90% 0.14% 1.080/o 0.54% 51 569 Force (CLF) 17 Male 833 % 51.01% 3.12% Female 800 % 48.99% 2.75% 71 1 3 19 34.84% 7.29% 4.35% 0.06% 0.18% 1.16% 449 45 119 205 71 2 2 26 27.50% 12.55% 4.35% 0.12% 0.12% 1.59% TABLE 2- CALENDAR YEAR 2015 TOTAL WORKFORCE BY GENDER, RACE AND ETHNICITY 8 TWO TOTAL HISPANIC WHITE BLACK ASIAN NH/OPI Al/AN OR MORE TOTAL 1509 90 968 277 126 2 6 40 CLF 100% 9.96% 72.36% 12.02% 3.90% 0.14% 1.08% 0.54% % 100% 5.97% 64.15% 18.36% 8.35% 0.13% 0.40% 2.65% Male 784 48 543 104 66 0 4 19 17 The CLF is derived from the 2006-2010 American Community Survey (ACS) Equal Employment Opportunity Tabulation (EEO Tabulation). The EEO Tabulation was originally released by the U.S. Census Bureau on November 29, 2012. It provides external benchmarks to assist federal agencies in monitoring employment practices and enforcing workforce civil rights laws. Federal agencies are required to use the EEO Tabulation in preparing their annual MD-715 EEO Program Status reports. Seehttps: / / wypid inc.gov / /I oder al / dir ectiv es/ Lech _assistance _0610 LEO bLl Llt in 11. IS Calendar year (CV) data encompasses pay period one that began on January 10, 2016 through pay period 26 that ended on January 72017. Workforce numbers for CY 2015 included in this CV 2016 OMWI Annual Report may differ slightly from corresponding data reported in the CV 2015 Status Report. This is due to retroactive processing of personnel actions, late processing of personnel actions, or other changes made in applicable data systems since the data was finalized for the CV 2015 OMWI Annual Report. 15 CONSUMER FINANCIAL PROTECTION BUREAU TWO TOTAL HISPANIC WHITE BLACK ASIAN NH/OPI Al/AN OR MORE % 51.95% 3.18% 35.98% 6.89% 437% 0.00% 0.27% 126% Female 725 42 425 173 60 2 2 21 % 48.05% 2.78% 28.16% 1146% 198% 0.13% 0.13% 1.39% 3.2 Demographics of mission critical occupations The CFPB has four Mission Critical Occupations (Miscellaneous Administration and Program Series, Economists, Examiners and General Attorneys) that comprise the largest occupational categories (0301, 0110, 0570, and 0905, respectively). As a result, the Bureau is committed to ensuring that these key positions particularly reflect the diverse makeup of the American marketplace. In 2016, among the permanent employees, 308 were employed in the Miscellaneous Administration and Program Series, of which 44.81% were minorities and 55.19% were white; 44.16% were men and 55.84% were women. Of the 34 Economists employed by the Bureau in CV 2016, 76.47% were white and 23.53% were minority; 64.71% were men and 35.29% were women. Of the 429 Examiners at the Bureau in CV 2016, 59.21% were white and 40.79% were minority; 284(66.20%) were men and 145(3380%) were women. Of the 299 General Attorneys employed by the Bureau in CY 2016, 75.92 were white and 24.08% were minority; 45.48% were men and 54.52% were women. TABLE 3- CALENDAR YEAR 2016 MISSION CRITICAL OCCUPATIONS BY ERI AND GENDER (PERMANENT WORKFORCE) ERI/GENDER MISC. ADMIN. & PROGRAM (0301) ECONOMISTS (0110) EXAMINERS (0570) GENERAL ATTORNEYS (0905) TOTALS 308 34 429 299 % 100.00% 100.00% 100.00% 100.00% Hispanic 20 1 28 14 °/. 6.49% 2.94% 6.53% 4.68% 16 CONSUMER FINANCIAL PROTECTION BUREAU MISC. ADMIN. GENERAL ECONOMISTS (0110) EXAMINERS (0570) 8.60% 5.10% 3.80% 430% White 170 26 254 227 % 55.19% 76.47% 5921% 75.92% CLF 70.90% 81.00% 7240% 84.40% Black 80 2 97 23 °A) 25.97% 5.88% 2261% 7.69% CLF 11.90% 5.50% 12.30% 4.70% Asian 27 5 33 25 % 8.77% 14.71% 7.69% 8.36% CLF 6.20% 7.60% 7.70% 3.60% NH/OPI 1 0 2 0 °A) 0.32% 0.00% 0.47% 0.00% CLF 0.10% 0.10% 0.00% 0.00% Al/AN 1 0 4 0 % 0.32% 0.00% 0.93% 0.00% CLF 0.70% 0.60% 0.40% 0.50% Two or More 9 0 11 10 2.92% 0.00% 2.56% 3.34% CLF 0.50% 0.20% 0.50% 0.40% Male 136 22 284 136 % 44.16% 64.71% 66.20% 45.48% CLF 36.70% 67.10% 54/0% 66.70% Female 172 12 145 163 55.84% 35.29% 33.80% 54.52% 63.30% 32.90% 45.30% 33.30% ERI/GENDER & PROGRAM (0301) CLF CLF 18 CONSUMER FINANCIAL PROTECTION BUREAU ATTORNEYS (0905) During 2016, the CFPB employed 299 permanent employees in the General Attorney (0905 series) occupational series, 136(45.48%) were men and 163(54.52%) were women. The percentage of women and men attorneys on permanent appointments remained essentially unchanged from 2015 (men were 45.71% and women were 54.29%). The percentage of minority attorneys on permanent appointments also remained essentially unchanged, from 23.93% in 2015 to 24.08% in 2016. At the end of 2016, there were 34 employees on permanent appointments as Economists. Of these Economists, 64.71% were men and 35.29% are women. Of this population, 26(76.47%) of the Economists were white and 8(23.53%) were minorities. TABLE 4- CALENDAR YEAR 2016 PAYBANDS FOR MISSION CRITICAL OCCUPATIONS BY GENDER/ERI ATTORNEYS (0905) (PERMANENT WORKFORCE)19 ALL GS-11-13 /CN-51-53 GS-14/ CN-60 GS-15/ CN-71 SENIOR LEVEL20 Totals 299 38 81 167 13 % 100.00% 12.71% 27.09% 55.85% 4.35% Hispanic 14 5 1 7 1 % 4.68% 1.67% 0.33% 2.34% 0.33% White 227 24 68 126 9 % 75.92% 8.03% 22.74% 42.14% 3.01% Black 23 4 5 11 3 % 7.69% 1.34% 1.67% 3.68% 1.00% Asian 25 5 4 16 0 % 8.36% 1.67% 1.34% 5.35% 0.00% NH/OPI 0 0 0 0 0 ERI/GENDER '9 Table 4 reflects the percentage of a specific ERI or Gender out of the entire permanent workforce of the particular mission critical occupation (MC0). The same is true for the Tables 5 and 6 which show MCO by pay band groupings. 20 19 Senior level pay bands include the CN-81, CN-82, CN-90,02 and 03. CONSUMER FINANCIAL PROTECTION BUREAU [RI/GENDER Al/AN Two or More Male Female ALL GS-11-13 09-14/ CN-60 09-15/ CN-71 SENIOR /CN-51-53 0.00% 0.00% 0.00% 0.00% 0.00% 0 0 0 0 0 0.00% 0.00% 0.00% 0.00% 0.00% 10 0 3 7 0 3.34% 0.00% 1.00% 2.34% 0.00% 136 19 40 71 6 45.48% 6.36% 13.38% 23.75% 2.01% 163 19 41 96 7 54.52% 6.35% 13.71% 32.11% 2.34% LEVEL" The permanent Bureau Examiner workforce was 429 employees at the end of 2016. The workforce was approximately two thirds men (66.20%) and one third women (33.80%). All minority employees who were Examiners were in the CN-51 to CN-53 pay band groupings. 59.21% of all Examiners were White and 40.79% were minorities. Of the minority Examiners, 22.61% were Black, 7.69% were Asians and 6.53% were Hispanics, the remaining 3.96% included Hawaiian Pacific, American Indian and employees of Two or More Races. The Examiner population is the most geographically dispersed population at the Bureau. TABLE 5: ERI/ GENDER CALENDAR YEAR 2016 PAYBANDS FOR MISSION CRITICAL OCCUPATIONS BY GEN DER/ERI EXAMINERS (0570) (PERMANENT WORKFORCE) TOTAL GS-10 AND BELOW/ GS-11-13/ GS-14/ GS-15/ CN-43 CN-51-53 CN-60 CN-71 AND BELOW 21 Senior level pay bands include the CN-8I, CN-82, CN-90, 02 and 03. 20 CONSUMER FINANCIAL PROTECTION BUREAU SENIOR LEVEL2I ERI/ GENDER TOTAL GS-10 AND BELOW/ CN-43 AND BELOW Totals 429 23 285 93 24 4 100% 5.36% 66.43% 21.68% 5.59% 0.93% Hispanic 28 0 22 4 2 0 % 6.53% 0.00% 5.13% 0.93% 0.47% 0.00% White 254 10 157 68 16 3 % 59.21% 2.33% 36.60% 15.85% 3.73% 0/0% Black 97 13 65 13 6 0 % 22.61% 3.03% 15.15% 3.03% 1.40% 0.00% Asian 33 0 27 5 0 1 % 7.69% 0.00% 6.29% 1.17% 0.00% 023% NH/OPI 2 0 2 0 0 0 % 0.47% 0.00% 0.47% 0.00% 0.00% 0.00% Al/AN 4 0 3 1 0 0 % 0.93% 0.00% 0.70% 0.23% 0.00% 0.00% Two or More 11 0 9 2 0 0 °A) 2.56% 0.00% 2.10% 0.47% 0.00% 0.00% Male 284 17 184 60 20 3 °A) 66.20% 3.96% 42.89% 13.99% 4.66% 0/0% Female 145 6 101 33 4 1 °A) 33.80% 140% 23.53% 7.69% 0.93% 023% 21 GS-11-13/ C N-51-53 GS-14/ CN-60 GS-15/ CN-71 CONSUMER FINANCIAL PROTECTION BUREAU SENIOR LEVEL2I TABLE 6- CALENDAR YEAR PAYBANDS FOR MISSION CRITICAL OCCUPATIONS BY GENDEWERI MISCELLANEOUS ADMINISTRATION & PROGRAM SERIES (0301) (PERMANENT WORKFORCE) GS-10 AND ERI/GENDER TOTAL BELOW/CN43 AND BELOW GS-1113/ CN51-53 GS-14/ GS-15/ CN-60 CN-71 SENIOR LEVEL22 Totals 308 13 166 70 27 32 °A) 100.00 4.22 53.90 22.73 8.77 1039 Hispanic 20 1 11 4 2 2 °A) 6.49 032 3.56 1.29 0.65 0.65 White 170 6 82 44 18 20 °A) 55.19 135 26.62 14.29 5.84 6.49 Black 80 6 54 10 7 3 °A) 25.97 135 17.53 3.25 2.27 0.97 Asian 27 0 14 6 0 7 °A) 377 030 435 1.95 0.00 2.27 NH/OPI 1 0 0 1 0 0 032 0.00 0.00 0.32 0.00 0.00 1 0.00 1 0 0 0 032 0.00 032 0.00 0.00 0.00 9 0 4 5 0 0 2.92 0.00 130 1.62 0.00 0.00 136 2 73 28 15 18 44.16 035 23.70 9.09 4.87 5.84 172 11 93 42 12 14 Al/AN Two or More Male Female 22 22 Senior level pay bands include the CN-8I, CN-82, CN-90, 02 and 03. CONSUMER FINANCIAL PROTECTION BUREAU [RI/GENDER TOTAL 55.84 GS-10 AND BELOW/CN43 AND BELOW GS-1113/ CN51-53 3.57 30.19 GS-14/ CN-60 GS-15/ CN-71 13.64 3.90 SENIOR LEVEL22 4.55 3.3 New hires: Permanent In CV 2016, the Bureau hired 197 new permanent employees, 84 men (42.64%) and 113 women (57.36%). This overall number represented an increase from CV 2015 when 165 new permanent employees were hired, 75 men (45.45%) and 90 women (54.55%). Of the 113 women hired in 2016, 48 (24.37%) were White, 41(20.81%) were Black, 12(6.09%) were Asian and 7(3.55%) were Hispanic. When compared to 2015, there was an increase in the percentage of hires who were Black (7.02%), Asian (2.88%), and a slight decrease of Hispanics (-0.52%). Of the 84 men (43.48%) who were new hires in 2016, 52 (26.40%) were White, 17(8.63%) were Black, 8 (4.06%) were Asian and 5(2.55%) were Hispanic. There was a slight decrease in the overall percentage of new hires who were men, down 2.81% from 2015, with White and Hispanic men accounting for most of the decline by 4.51% and 3.30%, respectively. TABLE 7. CALENDAR YEAR 2016 NEW PERMANENT HIRES BY GENDER. RACE AND ETHNICITY TWO OR 2016 TOTAL HISPANIC WHITE BLACK ASIAN NH/OPI Al/AN Total # 197 12 100 58 20 1 0 6 100 6.10 50.76 29.44 10.15 0.51 0.00 3.05 Male 84 5 52 17 8 1 0 1 % 42.64 2.55 26.40 8.63 4.06 0.51 0.00 0.51 Female 113 7 48 41 12 0 0 5 23 CONSUMER FINANCIAL PROTECTION BUREAU MORE RACES 2016 TOTAL HISPANIC WHITE BLACK ASIAN NH/OPI Al/AN 57.36 TABLE 8- 3.55 24.37 20.81 6.09 0.00 0.00 TWO OR MORE RACES 2.54 CALENDAR YEAR 2015 NEW PERMANENT HIRES BY GENDER, RACE AND ETHNICITY WHITE BLACK ASIAN NH/OPI Al/AN TWO OR MORE RACES 11 101 37 12 0 0 4 100 6.66 61.21 22.42 7.27 0.00 0.00 2.42 Male 75 8 51 11 4 0 0 1 c/o 45.45 5.85 30.91 6.67 2.42 0.00 0.00 0.61 Female 90 3 50 26 8 0 0 3 54.55 1.82 30.30 15.76 4.85 0.00 0.00 1.82 2015 TOTAL Total # 165 HISPANIC Temporary hires, which included interns in the Pathways program, as well as legal, technology and management fellows, are an important part of the Bureau's diversity hiring strategy because they provide a ready pool of potential applicants for vacancies in the Bureau. In CY 2016, there were 115 new temporary hires, consisting of 53 (46.09%) women and 62(53.91%) men. Of the 53 women, 33(28.70%) were White, 7(6.09%) were Black, 8(6.96%) were Asian, 1(0.87%) was Hispanic, and 4(3.48%) were Two or More Races. Of the 62 men hired, 43(39.13%) were White, 6(5.22%) were Black, 6(5.22%) were Asian and 4(3.48%) were Hispanic and 1(0.83%) was Two or More Races. 24 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 9: CY 2016 NEW TEMPORARY HIRES BY GENDER, RACE AND ETHNICITY TWO CY2016 TOTAL HISPANIC WHITE BLACK ASIAN NH/OPI Al/AN OR MORE RACES Total # 115 5 78 13 14 0 0 5 % 100 4.35 67.83 11.30 12.17 0.00 0.00% 4.35 Male 62 4 45 6 6 0 0 1 53.91 3.48 39.13 5.22 522 0.00 0.00 0.83 Female 53 1 33 7 8 0 0 4 % 46.09 0.87 28.70 6.09 6.96 0.00 0.00 3.48 3.4 Separations (Permanent workforce) The number of permanent employees who separated from the Bureau over the past three years has remained relatively consistent. During 2016,102 employees on permanent appointments separated from the Bureau compared with 101 employees in 2015 and 98 employees in 2014. Of the permanent employees separated in 2016, there was a slightly lower percentage of women than men, 48.04% compared with 51.96%. There was a much lower percentage of minorities separated than whites, 38.24% for minorities and 61.76% whites. TABLE 10. CALENDAR YEAR 2016 SEPARATIONS OF PERMANENT EMPLOYEES BY GENDER, RACE AND ETHNICITY TWO OR TOTAL HISPANIC WHITE BLACK ASIAN NH/OPI Al/AN MORE 2016 RACES Total # 102 9 63 17 9 0 1 3 100% 8.72% 61.76% 16.67% 8.82% 0.00% 0.98% 2.94% 25 CONSUMER FINANCIAL PROTECTION BUREAU 2016 TOTAL HISPANIC WHITE BLACK ASIAN NH/OPI Al/AN TWO OR MORE RACES Male 53 6 36 3 5 0 1 2 0/0 51.96% 5.88% 35.29% 294% 4.90% 0.00% 0.98% 1.96% Female 49 3 27 14 4 0 0 1 0/0 48.04% 2.94% 26.47% 13.73% 3.92% 0.00% 0.00% 0.98% 3.5 Outreach and recruitment In 2016, the CFPB continued its commitment to recruit and hire highly qualified individuals from diverse backgrounds to fill positions at all Bureau locations across the country. OMWI collaborated closely with the OHC's Talent Acquisition team and the OCR to advance the Bureau's recruitment and hiring strategies. Additionally, the Bureau continued to leverage the diverse networks available through its own employees and through professional associations, to broaden the recruitment efforts in order to reach larger pool of potential applicants. To achieve the goal of hiring as diverse a pool of employees as possible, two key strategies were implemented: 1) recruiting widely to make sure that the pool of applicants was as diverse as possible; and 2) continuously improving the hiring processes to ensure an equitable process for all applicants. In 2016, the OHC's Talent Acquisition team and OMWI undertook outreach efforts and continued to build relationships with membership organizations and associations serving diverse professionals, as part of the overall recruitment strategy to build a pool of diverse talent interested in working at the Bureau. Among the approaches used to reach a wide pool of highlyqualified, diverse applicants for the CFPB positions were the following: Engaged the Professional Diversity Network (PDN) and other organizations to promote the CFPB and published all available job opportunities to diverse audiences, including minorities, women, veterans, persons with disabilities and LGBT individuals. • 26 Participated at professional conferences and university events, with a special focus on CONSUMER FINANCIAL PROTECTION BUREAU building relationships and marketing to affinity organizations serving underrepresented groups, including the National Black MBA Association, the National Society of Hispanic MBAs, and the Association of Latin Professionals for America, Ascend Pan Asian Leaders, and the National Association of Black Accountantsa. Enlisted senior leadership and Bureau champions to promote the Bureau's employer identity at outreach events in order to attract candidates to the CFPB as a best place to serve. Enhanced the program that engages existing employees as ambassadors of the Bureau and provided them with the tools, messages, and resources to reach out to their own professional networks. • Leveraged and promoted flagship professional development programs, such as the Bureau's Technology and Innovation Fellows Program, the Director's Financial Analyst Program, and the Louis Brandeis Honors Attorney Program, to find entry-level talent, and to promote the Bureau as an employer of choice. Continued to utilize intern and professional development programs to build a robust pipeline of talent to meet current and emerging workforce needs, including through the Federal Pathways Program. • Continued to develop and deploy a digital strategy, which included posting on social media sites to allow for ongoing connections with a wide range of audiences, ensuring engagement was timed with available opportunities. • Posted job opportunities on the Bureau's public website and utilized an internal network of staff to share information about employment opportunities24. The following are some of the internal hiring processes the Bureau has implemented in keeping with federal hiring goals and standards to ensure equitable access for everyone: 23 A comprehensive list of organizations to which OHC and OMWI conducted outreach is listed in Appendix A. consumer [Ma rice.g ov/a bout-us/careers/ 27 CONSUMER FINANCIAL PROTECTION BUREAU 1. OHC institutionalized a new annual hiring planning process that supported divisions in using more systematic approaches, including assessment strategies. For some divisions, this included structured interviews and the use of a new Subject Matter Expert (SME) review of minimum qualifications process. These approaches enabled hiring managers to make objective, data-driven employee selection decisions which helped to ensure an equitable process for all candidates including those from underrepresented groups. 2. Training was provided by the OHC and the OCR to staff involved in the hiring process to help increase awareness and competence for conducting unbiased selection and hiring processes. 3. The OHC administered a New Employee survey and Hiring Manager survey to identify processes that were working well and those that could be improved. Using survey responses OHC made hiring process improvements, such as creating a seamless onboarding experience. 3.6 Promotions Employees at the Bureau can receive a promotionm through the competitive process (e.g., apply for a promotion and get selected) or through the non-competitive process (e.g., on a career ladder and receive a promotion to the next pay band). There were 405 promotions in the total workforce in CV 2016. Of the employees promoted, 47.41% were men and 52.59% were women, compared to the total Bureau workforce of 51.01% men and 48.99% women. While these percentages are relatively aligned, the percentage of women who received promotions was higher than their representation in the Bureau's workforce. Of the promotions, 59.51% were White and 40.49% were of a minority group, compared to the Bureau's total workforce of 62.34% white employees and 37.66% minority Employees. Similar to the gender comparison, the percentage of minorities who were promoted 25 For purposes of this report and related tables, a promotion is defined as a change to a higher pay band (e.g., CN-51 to CN-52). 28 CONSUMER FINANCIAL PROTECTION BUREAU was slightly higher than their representation in the Bureau's workforce. TABLE ll• CALENDAR YEAR 2016 PROMOTIONS RECEIVED BY ETHNICITY AND RACE (TOTAL WORKFORCE) 2016 TWO OR TOTAL HISPANIC WHITE BLACK ASIAN NH/OPI Al/AN MORE RACES Total # Received 405 /0 0 Received 27 242 100% 6.66% 80 36 0 2 19 59.51% 19.75% 8.89% 0.00% 0.49% 4.69% TABLE 12. CALENDAR YEAR 2016 PROMOTIONS RECEIVED BY ETHNICITY. RACE AND GENDER (TOTAL WORKFORCE) TWO OR TOTAL HISPANIC WHITE BLACK ASIAN NH/OPI Al/AN MORE 2016 RACES Men Promoted 192 % Men Promoted 47.41% 3.70% 32.10% 4.44% 4.94% 0.00% 0.49% 1.73 213 12 111 62 16 0 0 12 52.59 2.96 27.41 15.31 3.95 0.00 0.00 2.96 Women Promoted °A, Women Promoted 29 15 130 CONSUMER FINANCIAL PROTECTION BUREAU 18 20 0 2 7 4. Workforce inclusion The CFPB's diversity and inclusion strategy includes specific emphasis on creating an inclusive work environment for all employees. This focus is based on evidence that the benefits of having a diverse workforce are only fully realized when the work environment is inclusive26. These benefits include having greater productivity and innovation and arriving at solutions that have greater relevance for consumers. In addition, having a workplace that employees find inclusive and hospitable supports employee engagement which can contribute to longer term retention. With that in mind, the CFPB had the following inclusion-focused initiatives in place in 2016: Divisions included diversity and inclusion objectives in their strategic plans. The Workforce of the Future, a Bureau-wide initiative designed to establish a common culture and workforce experience, had diversity and inclusion as a foundational norm to ensure continued Bureau success. • Diversity and inclusion training for managers and non-supervisory employees provided by OMWI which emphasized increasing awareness, developing skills for interacting effectively in an inclusive work environment, and working to mitigate bias in the performance management process. The competency model, developed by the OHC in collaboration with OMWI, included a core diversity and inclusion competency for managers, Modeling Inclusive Communications, as well as for non-supervisory employees, Building Inclusive 26 How Diversity Can Drive Innovation, Sylvia Ann Hewlett, Melinda Marshall, Laura Sherbin, Harvard Business Review, December, 2013. 30 CONSUMER FINANCIAL PROTECTION BUREAU Relationships. The Bureau used the Annual Employee Survey (AES) which is administered by OPM (titled The Federal Employee Viewpoint Survey) to track progress on the inclusion efforts. The AES assessed a broad range of employee perspectives and experiences, among them perspectives and experiences on the rate of inclusion in the workplace.27 In 2016, a total of 1372(87.6%) of all employees completed the survey, compared to 45.8% government-wide.28 Results for 2016 showed that overall the Bureau continued on its positive trend when compared to government benchmarks, with modest improvements over AES 2015 and a sustained rebound from 2014 results. The most notable challenges reported continued to be in the areas of performance-based recognition and rewards. The results also showed differences by demographic population comparisons, including, more favorable responses from men than women on 31 items (up from 14 in 2015) and more favorable responses by White than Black employees on 28 items (up from 11 in 2015). The Annual Employee Survey measures inclusion through the use of the Inclusion Quotient which is a subset of 20 survey items that focuses on employees' perception of, and experience in the workplace. The Inclusion Quotient consists of five aspects of inclusion: Fair, Open, Cooperative, Supportive, and Empowering. These five areas are defined as follows29: • Fair: perception of fairness in performance, evaluation, rules and procedures. Open: extent to which diversity and inclusion are promoted by the agency and/or managers. Cooperative: extent to which managers promote communication and support collaboration. For more information on the CFPB 2016 AES results, see http://wwsivconsumerfinance.govidamresearchhesearchmeports/2016-cfpb-annual-omployoo-survoy-results. 27 28CFP13 named our survey the AES; it is called Federal Employee Viewpoint Survey by OPM. httus://www.fedview.opm.gov/2016FILES/2016_FEVS_Gwide_Final_Report.PDF 29 Inclusion Quotient Results, pgs. 22 —23, CFPB 2016 AES results, see http ://www.con su merfi n a nce.govida ca resea rch/research eports/2016-cfpb-a n n U3 I-em pl oyee-su rveymesu Its. 31 CONSUMER FINANCIAL PROTECTION BUREAU • Supportive: management and leadership style of managers. • Empowering: employees' participation in decision-making. In all three years (2016, 2015 and 2014) that the CFPB included all 20 questions on the Inclusion Quotient, results have exceeded the government-wide results on all of the five indices. In 2016, the Bureau's overall score on the Inclusion Quotient was close to ten percentage points (9.5%) above the overall government-wide results. In 2016, as in 2015, the Bureau's highest score for an individual index was on the "Supportive" index, 84.3%, just slightly down from the 85.5% in 2015. Also as in past years, the 2016 "Fair" index continued to be an area of opportunity for the Bureau, showing a steady, but small (almost two percent) increase each year over the previous year from 2014 to 2016. This trend on the CFPB "Fair" index result was similar to the government-wide scores on that index, both in being the lowest of all the indices, and in the slight improvement seen in 2016. At a score of 68.8%, the Bureau's "Cooperative" index showed the largest increase in 2016, up 5.5% from 2015 when it was 63.3%. The "Cooperative" Index also had the largest increase (14.8%) over governmentwide results. In summary, the Bureau's continued to outperform the government-wide averages on all indices of the Inclusion Quotient. Table 13 below, shows the results for the CFPB Inclusion Quotient 2016 compared to 2015 and to the government-wide results. TABLE 13. THE CFPB INCLUSION Qt1OTIENT33 INCLUSION QUOTIENT INDICES Inclusion Quotient Fair CFPB 2016 GOV'T WIDE 2016 CFPB 2015 GOV'T WIDE 2015 67.5% 58% 65.8% 57% 47.9% 45% 46.0% 43% 30 Inclusion Quotient Results, pgs. 22 — 23, CFPB 2016 AES results, see htcp./Aqww.con su me rf mance gov/dataresearch/research -reports/2016-cfpb-a n n ua I-em pl oyee-su rvey-resu Its. 32 CONSUMER FINANCIAL PROTECTION BUREAU INCLUSION QUOTIENT INDICES CFPB 2016 GOV'T WIDE 2016 CFPB 2015 GOV'T WIDE 2015 Open 69.7% 57% 69.9% 56% Cooperative 68.8% 54% 63.3% 52% Supportive 84.3% 75% 85.4% 75% Em powering 66.6% 58% 64.6% 57% The following are some of the specific initiatives that were newly created, or continued, in 2016 in support of the diversity and inclusion priorities: The Bureau launched a five-year diversity and inclusion strategic plan that outlined specific goals and strategies to increase diversity and support inclusion at the Bureau. OMWI facilitated the Executive Advisory Council (EAC), a cross-divisional group of senior leaders working with OMWI to strengthen and integrate diversity and inclusion into the Bureau's functioning by providing strategic guidance, advocacy and support for diversity and inclusion in the Bureau. • OMWI worked with divisions to develop and implement diversity and inclusion objectives in their divisional strategic plans aimed at increasing diversity among their staff and ensuring that the work environment was inclusive for all employees. • OMWI continued to provide mandatory training on diversity and inclusion to managers, and the OCR continued to provide mandatory training on Equal Employment Opportunity (EEO) compliance, provided by the U.S. Equal Employment Opportunity Commission (EEOC) Training Institute. The two sets of training helped supervisors and managers to strengthen their skills in leading and managing a diverse and inclusive workforce, and in attending to equity and fairness issues. • OMWI continued to provide mandatory training for all non-supervisory employees to increase their awareness and understanding of the importance of diversity and inclusion and the ways in which it enhances the overall effectiveness of the Bureau. • OMWI, OHC and OCR collaborated to enhance their supervisory and employee training to ensure that compliance, diversity and inclusion concepts were addressed. Training 33 CONSUMER FINANCIAL PROTECTION BUREAU included the supervisory development seminars, leadership effectiveness seminars, and structured interview training. OMWI presented a seminar to managers on identifying and utilizing effective strategies for mitigating unconscious bias and ensuring compliance with civil rights mandates in performance evaluations, in collaboration with the OCR. • OMWI and OHC established and maintained relationships with, and outreach to, professional organizations that represent Veterans, Disabled Veterans, Hispanics and other minority constituencies. This outreach included attending career fairs and professional association meetings throughout the year to meet and provide information on the CFPB, and on employment opportunities to these groups. Bureau vacancies were also posted on bulletin boards geared to those groups of professionals. • OMWI established the Diversity and Inclusion Council of Employees (DICE) with members from all geographic areas of the Bureau. DICE worked with OMWI to ensure that employees' perspectives were taken into consideration in all aspects of OMWI's work. DICE provided a feedback mechanism for OMWI and the Bureau's Director. DICE members provided thought leadership and work on diversity and inclusion initiatives at the Bureau. The Bureau established a new Employee Resource Group (ERG) Policy to serve as a guide to employees who want to form interest-based groups to assist the Bureau in understanding and considering broad perspectives in providing service to the diverse spectrum of consumers. In 2016, OMWI approved the charter of two ERGs formed by employees. The ERGs served as a vehicle for networking, recruiting and retaining a diverse workforce. OMWI partnered with OHC and used the AES results, including perceptions across demographic groups and the Inclusion Quotient, to analyze employee perceptions and take actions to help all employees feel included in the Bureau. The Bureau continued to organize and host a series of cultural events in recognition of national Heritage Months as part of ongoing efforts to increase awareness of employees' cultural backgrounds and to foster inclusion across the Bureau. A listing of events hosted is included in Appendix B. 34 CONSUMER FINANCIAL PROTECTION BUREAU The following three Bureau-wide groups are part of the ongoing overall approach used to ensure the sustainability of the Bureau's diversity and inclusion strategy. All three groups work to embed diversity and inclusion in the organizational fabric of the Bureau: The Diversity and Inclusion Executive Advisory Council (EAC) The Diversity and Inclusion Council of Employees (DICE) • The Workforce of the Future Committee (WFF) The Diversity and Inclusion Executive Advisory Committee (EAC) The Diversity and Inclusion Executive Advisory Committee (EAC) is a cross-divisional advisory group of senior leaders, including Associate and Deputy Associate Directors and Assistant and Deputy Assistant Directors. The EAC works under the leadership of the OMWI Director to help strengthen and integrate the Bureau's diversity and inclusion strategic plan into the CFPB's functioning and mission-related work. EAC members have a deep commitment to diversity and inclusion and prioritize diversity and inclusion in their work. EAC members serve a two-year term and function in the following broad roles: Advisory: OMWI brings matters to the EAC members for their input based on their knowledge of the Bureau and leadership roles in the organization. In some specific situations, the EAC may be asked to review and recommend a position, policy or initiative presented by OMWI. Informed Champions/Advocates: OMWI presents information to the EAC to update the members on new or ongoing projects and plans; to seek the EAC's assistance in socializing new initiatives throughout the Bureau; or to help socialize a Bureau-endorsed position on a matter. The EAC provides advice and recommendations on the Bureau's diversity and inclusion strategy. Its objectives are focused on policies and processes that support the efforts to: • Recruit and retain a diverse workforce reflecting the best talent; Foster inclusion throughout the Bureau; and Support opportunities for professional development. 35 CONSUMER FINANCIAL PROTECTION BUREAU In the two-year term that ended in 2016, the EAC weighed in on the following matters that helped ensure the sustainability of the Bureau's diversity and inclusion initiatives by providing input on existing policies and procedures including: Provided input on mandatory training for managers to support them in managing diversity and inclusion in their units. • Provided input and perspective to OMWI's recommendations to the 01-1C on incorporating diversity and inclusion in the competency models that serve as the cornerstone for hiring and promotion decisions. Provided input to OMWI on policy proposals for the development of an employee diversity and inclusion council of employees, the DICE, a Mentoring Bank program and a policy for establishing ERGs. Provided input on the Bureau's Transgender Policy developed by the Office of Civil Rights. • Reviewed recruitment and hiring data and made recommendations to ensure attention to diversity at all stages of the recruitment and hiring process. • Participated in diversity-related performance evaluation training and made that training available to managers in their divisions. Studied the Inclusion Quotient results in the Annual Employee Survey and recommended that it be used as a benchmark by divisions to track outcomes on their diversity goals in their strategic plans. • Communicated the Bureau's diversity and inclusion strategy and initiatives throughout the organization, thereby helping to make them a focus in the Bureau's functioning. The Diversity and Inclusion Council of Employees (DICE) In February 2016, the CFPB officially launched DICE. DICE is a volunteer body of employees that provides employee perspectives on the Bureau's diversity and inclusion efforts, works with OMWI on diversity and inclusion initiatives and serves as a peer leadership opportunity for Bureau employees. DICE members are Bureau employees who were selected based on demographics, pay band 36 CONSUMER FINANCIAL PROTECTION BUREAU levels, regions, positions and union/non-union status. A leadership core consisting of two cochairs, a vice chair, and a recording secretary managed DICE's overall operations. DICE formed internal working groups that focused on key issues such as recruitment, retention, promotions and employee engagement. Meetings of the full DICE membership and an OMWI representative were held monthly. The working groups and leadership core met regularly in the weeks between the full body meetings. In 2016, its first year of operation, DICE had 17 members serving a two-year term. Its members had the opportunity to think deeply about diversity and inclusion at the Bureau, hone their leadership skills, and develop key relationships among members and with Bureau senior leadership. Members attended training on both unconscious bias and team-based communications to prepare them to build their skills for promoting diversity and inclusion at the Bureau. DICE is an important source of feedback for OMWI on employees' experiences in the Bureau and has provided a strong sense of engagement for employees serving as members. In 2016, the DICE undertook the following: Developed recommendations to OMWI related to recruitment, retention and promotions. Presented at the annual CFPB "All-Hands" meeting and to their divisions. Shared their perspectives with the Director on ways to improve and sustain diversity and inclusion at the Bureau. Published articles in internal newsletters on the importance of diversity and inclusion. Served as diversity and inclusion advocates by representing the Bureau at diversity and recruitment conferences in several locations across the United States. • Provided input to OHC regarding its recruitment materials helping to make them more relevant to all audiences. • Compiled a list of speakers to be considered for the Bureau's Heritage Month events. Collaborated with numerous stakeholders across the Bureau to enhance inclusive communication to employees by recommending a public loan forgiveness awareness campaign. 37 CONSUMER FINANCIAL PROTECTION BUREAU • Ensured that the Bureau used inclusive language for parental leave policies that included LGBTQ parents. DICE members who are also members of the National Treasury Employees Union provided input to NTEU on items in the Collective Bargaining Agreement and shared their perspectives and recommendations related to diversity and inclusion with the union. Workforce of the Future Committee (WFF) In November 2014, the CFPB launched WFF, an initiative designed to establish a common culture and workforce experience where everyone feels included, valued, and empowered to do their best work for sustainable, long-term impact. One of the first major WFF activities completed was the development of four norms that describe the common behaviors that Bureau employees aspire to practice more consistently and embed into the culture of the Bureau. The four norms are: Value diversity and inclusion Treat each other as partners • Be more disciplined in how we make decisions and set priorities • Hold ourselves and each other accountable for the norms Following the ratification of these norms, senior management was responsible for their implementation, after which the responsibility fell to the management team, and then supervisors. To measure awareness and practice of the norms, the Bureau conducted surveys periodically to determine progress in implementing the norms. The management team was surveyed in January 2016 on senior leadership's progress. In October 2016, survey administration was expanded to all supervisors and management team members to assess awareness and practice of the norms for all levels of management. The key findings on the diversity and inclusion norms from the October 2016 survey were: • Senior leadership made some progress in creating a workforce experience where everyone felt valued, included and empowered. The management team had roughly the same amount of norms' awareness as they did in 38 CONSUMER FINANCIAL PROTECTION BUREAU January (100% of respondents in both surveys were aware of the four norms). The management team's understanding of expectations for practicing and leading teams in practicing the norms increased since January. • Baseline data revealed the majority of supervisors had seen positive behavior changes in the division's management team over the past six months, with slightly more progress inside their own divisions. The majority of front line supervisors had awareness of the norms (88%) The majority of supervisors had some understanding of expectations in practicing the norms (83%) and leading their teams in practicing the norms (81%). 4.1 Training and leadership development The Bureau provided diversity and inclusion training through OMWI to managers and nonsupervisory employees as part of the Bureau's strategy to ensure that the workplace is diverse and inclusive. Managing Diversity and Inclusion for Supervisors and Managers. Beginning in Calendar Year 2015, the Bureau's Director required managers and leaders to attend a workshop entitled, "Leading Diversity and Inclusion at the Bureau." The workshop was made available to managers in small groups to allow for interaction between participants. As of the end of 2016, 247(84.6%) managers completed the training. The Bureau will continue to offer the workshop in 2017 for managers who have not yet completed it, and for new managers. Evaluations of the training indicated that participants had a very high level of satisfaction with the content they learned and with the workshop facilitators. Diversity and Inclusion Awareness Training for Non-Supervisory Employees. Beginning in Fall, 2012, OMWI has been offering a workshop to employees to help increase awareness of diversity and inclusion and to develop a shared understanding of the ways in which the diversity and inclusion strategy contributes to the Bureau's mission. In 2015, the Director required that all non-supervisory employees attend that workshop. As of year-end 2016,1,227 (75.1%) of the 1,633 employees have completed the training and the remaining employees are expected to complete in FY 2017. Evaluations of the training indicated that it was well received and that it was effective in increasing employees' awareness of the importance of diversity and 39 CONSUMER FINANCIAL PROTECTION BUREAU inclusion to the Bureau's overall effectiveness Other Diversity and Inclusion Training. OMWI, in collaboration with OCR, provided training to managers on diversity and inclusion in the performance evaluation process. The training focused on increasing managers' awareness of various types of implicit biases and the ways in which bias can impact the performance evaluation process. This workshop was offered by request to managers in both the headquarters and regional offices. Mandatory 2-Day Manager EEO Training for new managers. This mandatory training, led by the EEOC Training Institute, helped managers to strengthen their skills in addressing EEO and compliance matters in the workplace. A total of 65 supervisors and managers completed a mandatory 2-day EEO Training conducted by the EEOC Training Institute in FY 2016, for a total of over 250 to date. The training is ongoing to cover new managers. Leadership Development. In Calendar year 2016, the OHC provided three broad categories of leadership development: the Leadership Excellence Seminars (LES) series, the Supervisory Development Seminars (SDS) programs, and individual coaching through Executive Coaching. The leadership development training programs are mandatory for all supervisory level individuals at the CFPB (supervisors, managers and senior leaders), and the Executive Coaching offering is optional (available to executives and managers of managers). As of the end of FY2016, over 75% of all managers had completed the first five modules of the LES training, and close to 50% had completed the sixth module. This training program will continue in FY 2017, with the majority of the CFPB managers on track to complete all modules by the end of 2017. The CFPB SDS is a 3-day, mandatory training for all new CFPB supervisors. It covers leading people, making the transition to supervisor, human resources technical knowledge, performance management and addressing performance problems and conduct issues. It also incorporates leadership competencies including diversity and inclusion. As of end the end of FY 2016, 265 (94.6%) of all managers had completed the training, of those 56 supervisors completed the training in FY 2016. 40 CONSUMER FINANCIAL PROTECTION BUREAU 4.2 Performance management Beginning in FY 2014, the CFPB has been operating under a negotiated collective bargaining agreement article for performance management with performance ratings consisting of two levels: "Accomplished Performer" and "Unacceptable". Under this agreement, 100% of employees received a performance rating of "Accomplished Performer" over the past three years. The absence of any "Unacceptable" ratings reflects the Bureau's policy of giving employees who are not performing at acceptable levels the opportunity to improve, prior to receiving their performance rating. Under this agreement, employees whose performance was unacceptable or was approaching an unacceptable level would be notified of being at risk for a poor performance rating. If the employee improved to acceptable performance, then he or she would receive an "Accomplished Performer" rating at the end of the improvement period. For employees who did not improve during that period, appropriate actions could be taken, such as voluntary separation, reassignment, demotion, or involuntary termination of employment. In such cases, the employee would not be given a final performance rating but would be advised of the failure to improve performance and the consequences of that condition. 4.3 Reviews of CFPB programs During Calendar Year 2016, a number of external assessments reported on the Bureau's diversity and inclusion efforts. In the 2016 annual study of Best Places to Work conducted by the nonprofit Partnership for Public Service, the CFPB placed eighth out of 27 for mid-size agencies overall, and ranked fourth out of 26 peer agencies for support for diversity (a category measuring the extent to which employees believe that actions and policies of leadership and management promote and respect diversity).31 Also in 2016, the Professional Diversity Network (PDN) selected the CFPB for its "Diversity 31 41 Best Places to Work Agency Rankings, http://bestplacestoworgorg.BPTW/ran ki ngs/oyeral I/m id. CONSUMER FINANCIAL PROTECTION BUREAU Excellence Award" and named the Bureau one of PDN's "Top 10 Leading Employers in Diversity" from among 2200 employers across the nation. The criteria PDN used to make this award included: Percentage of resources and outreach budget assigned specifically to diversity; • Number of job openings actively promoted to a diverse audience; • Senior leadership statements, policies, and objectives specific to diversity recruitment; • Quality of content in diversity recruitment outreach; A culture of inclusion within H Rand throughout the organization as a whole; and • A systematic, comprehensive and defined diversity recruitment strategy. In addition, in January 2016, disABLED Magazine, a magazine targeted to the recruitment of persons with disabilities, named the CFPB the thirteenth Best Federal Agency Employer for persons with disabilities. On June 21, 2016, the Government Accountability Office (GAO) released a report describing the CFPB's ongoing work to foster a diverse and inclusive workforce and positive organizational culture.32 The report examined a wide variety of diversity and inclusion efforts underway at CFPB, noted progress that the Bureau has made, and identified recommendations on how to further enhance initiatives to promote the Agency's broad diversity and inclusion goals. After its two-year review, GAO reached a number of important conclusions. First, GAO recognized that CFPB has engaged in ongoing improvement efforts in response to challenges that the Bureau first identified in late 2013 and early 2014, including working "to strengthen personnel management practices and enhance its diversity and inclusion efforts." GAO also noted that CFPB has expanded management training, developed new guidance on personnel practices, developed a new performance management system, and "made progress in adopting See Consumer Financial Protection Bureau: Additional Actions Needed to Support a Fair and Inclusive Workplace (pubj une 20, 2016), available at http://etiviv.gao.gov/products/GACs 1,-61). 32 42 CONSUMER FINANCIAL PROTECTION BUREAU leading diversity management practices identified in prior GAO work, such as finalizing a diversity strategic plan, creating employee diversity groups, and expanding diversity training." GAO further noted that the CFPB "launched a new initiative to strengthen its organizational culture that includes obtaining employee input on ideas for improving CFPB's culture and addressing employee concerns. Finally, CFPB has strengthened its employee complaint processes by providing new training and guidance and creating feedback mechanisms to help evaluate progress in some areas." GAO stated that "CFPB's diversity, inclusion, fairness, and culture efforts represent a significant change management initiative." 33 GAO's report recognized that CFPB had undertaken many actions and initiatives on diversity, inclusion and fairness, citing "new policies, guidance, and training; efforts to enhance communication about personnel practices; several enhancements to diversity and inclusion efforts; and the new Workforce of the Future initiative to strengthen the organizational culture, among others." (p.46) The GAO report made only two limited recommendations, none of which was specific to OMWI operations: • CFPB should more "comprehensively report on its implementation goals and progress across these efforts." CFPB has developed feedback mechanisms to evaluate the effectiveness of its EEO complaint process, and should expand those same mechanisms for its non-Part 1614 employee grievance processes (i.e., the negotiated grievance process for bargaining unit members and the administrative grievance process administered by OHC for nonbargaining unit members).34 Bureau leadership immediately began working to implement both of GAO's recommendations. See Consumer Financial Protect/on Bureau: Additional Actions Needed to Support a Fan- and Inclusive Workplace (pubj une 20, 2016), available at hapleiutivio gao Huss/GAO- 6-62 33 See Consumer Financ/a1Protection Bureau: AddMonalAct/ons Needed to Support a Fair and Inclusive Workplace(pubjune 20, 2016), available at tictu://voinv gao ov/pi °duos/640s 6-62. 34 43 CONSUMER FINANCIAL PROTECTION BUREAU In 2016, as part of its oversight responsibility, the EEOC made a technical assistance visit to the Bureau's equal employment opportunity program and gave the program an overall positive report11. 35 For more information on this report, see the Bureau's 2016 MD-715 report at: h(tps //wv..evi consumerfmance govida(a-research/research-reports/equal-employment-opportum(y-eeo-programsiaius-i °port-fiscal-year-I-y-2015/ [to be updated when 2016 report is posted] 44 CONSUMER FINANCIAL PROTECTION BUREAU 5. Supplier Diversity36 Under Section 342 of the Dodd-Frank Act, OMWI is required to "implement standards and procedures to ensure to the maximum extent possible, the fair inclusion and utilization of...minority-owned nd women-owned businesses in all business and activities of the agency at all levels....including In procurement."37 The CFPB recognizes the benefits of doing business with a broad spectrum of businesses across all demographic backgrounds and is committed to supporting the growth and success of businesses owned by women, minorities and marginalized groups. Below are specifics related to the Bureau's procurement activities with minority-owned and women-owned businesses in FY 2016. 5.1 Minority-owned and women-owned businesses In 2016, OMWI continued the process of implementing procedures to comply with the statutory requirement. OMWI will continue to work with the Office of Procurement to raise awareness among current vendors and within the Bureau about Dodd-Frank requirements. Table 14 provides a breakdown of contract dollars obligated with women and minority-owned businesses for the past four years. In FY 2016, the Bureau entered into contract actions totaling $189,880,158, down by $54,284,026 from obligations of $244,164,184 in FY 2015. Of those All Supplier Diversity data are reported for FY 2016, unlike Workforce and Workplace Inclusion data which are for CY 2016. 37 h ttp://vpiAN.c Itc.gov/ La vvReg u lau on/D odd [rail kAct/I n dex.liLm, Section 342, p.166. 36 45 CONSUMER FINANCIAL PROTECTION BUREAU obligations, 26.24% were with women- and minority-owned businesses. This percentage more than doubled the 11% awarded to those businesses in FY 2015 and resumed the upward trend of FY 2013 (19%) and FY2014 (21%). As part of that upward trend, awards to African American owned business showed a small, but continued increase, from 3% in FY 2014 and FY 2015 to 3.36% in FY 2016. Awards to American Indian/Alaskan Native businesses on the other hand, declined from 2% in FY 2013 to 0.03%in FY 2016. TABLE 14: OVERALL MINORITY-OWNED AND WOMEN-OWNED BUSINESS (MWOB) *) CONTRACTS BY OBLIGATION DOLLARS AND ACTION COUNT FOR FISCAL YEARS 2013 - 2016 TYPE OF FY 2016 FY 2015 FY 2014 $189,880,158 $244,164,184 $151,024,453 % of Total 100% 100% 100% 100% MWOB $49,830,656 $26,388,324 $31,713,034 $ 20,920,245 % of Total 26.24% 11.00% 21.00% 19.00% $16,606,582 $12,762,670 $15,376,560 $ 9,830,322 % of Total 8.75% 5.00% 10.00% 9.00% Minority Owned $33,224,074 $21,424,081 $21,646,173 $ 16,972,273 VENDOR Total Obligated Dollars Women Owned (WO) (MO) FY 2013 $ 111,680,021 % of Total 17.50% 9.00% 14.00% 15.00% Asian American39 $21,665,144 $10,215,953 $12,043,603 $ 7,391,732 38 *MWOB: Minority-Owned, Women-Owned or Both also include self-certified small disadvantaged businesses. Note: Contracting Awards represent the total obligation dollars and contract actions during the given year. Federal Procurement Data System (FPDS) combines classification for Asian and Pacific Islander owned businesses. FPDS data was consolidated on 2/2/2015. Some actions may fall into more than one category. Women/Minority includes all women and/or minority-owned businesses, with each action counted once regardless of falling into multiple categories. 39 46 Includes Subcontinent Asian (Indian) and Pacific Islander CONSUMER FINANCIAL PROTECTION BUREAU % of Total 1141% 400% 8.00% 7.00% African American $6,384,444 $6,809,789 $4,711,373 $ 5,202,290 % of Total 3.36% 100% 3.00% 5.00% Hispanic American $2,663,624 $2,281,320 $540,295 $ 1,160,524 % of Total 1.40% IMO% 0.40% 1.00% American Indian/ Alaskan Native $56,623 $518,500 $664,808 $ 896,301 % of Total 0.03 0.20% 0.400/o 1.00% Other Minority $2,454,237 $955,580 $2,570,951 $ 1,968,999 % of Total 1.29% 0.40% 1.70% 2.00% The total number of actions obligated in FY 2016 was 1364, down by 86 from 1450 in FY 2015, as indicated in Table 15. There was a decrease in the total percentage of actions with MWOB (down 6.7%) and with MOB (down 3.5%) even though the total dollar amount awarded to those businesses increased, as indicated in Table 16 below, which would indicate that the average dollar amount of actions with these business was higher in FY 2016 than in FY 2015. For women-owned businesses, the percent of actions increased slightly from 22% in FY 2015 to 22.65% in FY 2016. For African American-owned and American Indian/Alaskan Native-owned businesses, the trend noted above for the dollar amounts obligated were also reflected in the number of actions, namely from 91 actions with African American businesses in FY 2015 to 61 in FY 2016 and from four with American Indian/Native American businesses in FY 2015 to one in FY 2016. TABLE 15. OVERALL MINORITY-OWNED AND WOMAN-OWNED BUSINESS CONTRACTS BY TRANSACTION COUNT FOR FISCAL YEARS 2013 - 2016 TYPE OF FY 2016 FY 2015 FY 2014 FY 2013 Total Actions 1364 1450 1247 922 % of Total 100% 100% 100% 100% MWOB 318 438 355 240 VENDOR 47 CONSUMER FINANCIAL PROTECTION BUREAU % of Actions 23.31% 30.00% 28.00% 26.00% Women Owned (WO) 309 323 253 157 % of Actions 22.65% 22.000/o 20.00% 17.00% Minority Owned (MOB) 198 264 201 157 % of Actions 14.52% 18.00% 16.00% 17.00% Asian American/ Pacific Islander 20 46 25 20 % of Actions 1.47% 3.00% 2.00% 2.00% African American 60 91 76 61 % of Actions 4.40% 6.00% 6.00% 7.00% Hispanic American 57 35 19 19 % of Actions 4.18% 2.00% 1.50% 2.00% American Indian/Alaskan Native 1 4 2 8 % of Actions 0.07% 0.30% 0.20% 1.00% Other Minorities 60 20 21 25 % of Actions 4.4% 1.00% 1.70% 3.00% Table 16 shows the breakdowns of contract dollars awarded for FY 2013 through FY 2016 to small and marginalized businesses; women-owned small businesses; service-disabled, veteranowned small businesses; and HUB Zone businesses. To ensure that small businesses are encouraged to receive a portion of federal procurements, the Federal Acquisition Regulations (FAR) established annual goals that 23% of Federal procurement dollars should be directed toward different socioeconomic categories of small businesses. The CFPB, in its commitment to promoting small businesses, has individually set a higher goal than that required under the FAR, of 28.5% for small business procurement awards. In FY 2016, the CFPB met its goal of awarding 28.5% of all contracts to small businesses. As shown in Table 16 below, the Bureau contracted $50,555,855 to small businesses, a total 48 CONSUMER FINANCIAL PROTECTION BUREAU representing approximately 26.62% of all CFPB contract awards. This was a 10.6% increase from amounts awarded in FY 2015, arising from both an increase in the number of awards to small businesses and a decrease on the overall number of awards. TABLE 16: OVERVIEW OF SMALL BUSINESS AWARDS FOR FISCAL YEARS 2013-2016 CONTRACTING ACTIONS FY2016 FY 2015 FY2014 FY 2013 Small Business Total $50,555,855 $40,051,121 $45,431,232 $34,191,750 % of Total Obligations 26.62% 16.00% 31.00% 32.00% Small Disadvantaged Business $16,630,151 $12,041,674 $14,157,591 $ 9,747,372 % of Total 8.76% 5.00% 10.00% 9.00% Women Owned Small Business $417,492,720 $12,726,829 $15,328,669 $ 9,830,322 % of Total 921% 5.00% 10.00% 9.00% Service Disabled Veteran Owned Small Business $4,087,779 $5,544,318 $5,167,743 $ 1,797,082 % of Total 2.15% 2.000/o 3.000/o 2.000/o HUB Zone Small Business $3,711,700 $2,029,328 $2,889,320 $ 2,561,903 % of Total 1.95% 1.00% 2.000/o 2.000/o In FY 2016, the Bureau's total spend was $259,132970, of which $38,386,242 (14.8%) was spent with minority-owned and women-owned businesses as shown in Table 17 below. Amount of spend with women-owned businesses was $12,774,353 (4.98%) with minority-owned businesses was $32,129,390 (12.53%). 49 CONSUMER FINANCIAL PROTECTION BUREAU TABLE 17: OVERVIEW OF SPEND FOR ALL MINORITY AND WOMEN OWNED BUSINESSES CONTRACTING SPEND FY2016 % Total Spend All Vendors $259,132,970 100% MWOB $38,386,242 14.81% Women Owned Business $12,774,353 4.98% Minority Owned $32,129,390 12.53% Asian/Pacific Islander $20,286,790 7.91% African American $4,877,447 1.90% Hispanic $2,350,737 0.92% $573,698 0.22% $2,856,413 1.11% American Indian Alaska Native Other Minorities TOTAL SPEND As shown in Table 18 below, the money spent with small businesses in FY 2016 was $56,646,358, 22.09% of all spending, of which $18,443,103, or 7.19% was spent with Small Disadvantaged businesses. TABLE 18: OVERVIEW OF SPEND FOR ALL SMALL BUSINESSESS CONTRACTING SPEND FY 2016 %of TOTAL SPEND Small $56,646,358 22.09% Small Disadvantaged $18,443,103 7.19% Women Owned Small $7,496,395 2.92% Service-Disabled Veteran Owned Small $4,894,536 1.9% FIUB Zone 4,002,617 1.56% 50 CONSUMER FINANCIAL PROTECTION BUREAU The following Tables 19 through 22 detail the historical obligations by the North American Industry Classification System ("NAICS") code which identifies products and service categories of purchase for Fiscal Years 2013 - 2016. As shown in Table 19 below, over half of the total obligations made in FY 2016 were in Professional, Scientific & Technical Services. The two largest contracts in this grouping were for approximately $34.6 million for other computer related services and approximately $24.9 million for administrative management and general management consulting services. In FY 2016, Information had the second largest amounts obligated with a total of $23.2 million. FIGURE 1: PERCENTAGE OF TOTAL OBLIGATIONS BY NAICS CODE GROUPING FOR FISCAL YEAR 2016 Professional, Scientific & Technical Services 56.50% Information 17.03% Utilities & Construction 7.80% Finance & Insurance 7.41% Administrative & Support & Waste 4.88% Wholesale Trade, Retail Trade, Transportation 228% Educational Services 1.86% Manufacturing 1.59% Other Services (except Public Administration) 0.56% Health Care, Social Assistance, 0.07% Real Estate & Rental & Leasing 0.01% 51 CONSUMER FINANCIAL PROTECTION BUREAU FIGURE 2: PERCENTAGE OF TOTAL OBLIGATIONS BY NAICS CODE GROUPING FOR FISCAL YEAR 2015 Commercial and institutional building 43% Other computer related services 10% Administrative management and general 8% All other information services 8% Educational support services 5% Advertising agencies 3% Computer systems design services 3% Custom computer programming services 2% Public relations agencies 2% Wired telecommunications carriers 2% Direct health and medical insurance carriers 1% Data processing, hosting, and related services 1% Other 52 CONSUMER FINANCIAL PROTECTION BUREAU 12% FIGURE): PERCENTAGE OF TOTAL OBLIGATIONS BY NAICS CODE GROUPING FOR FISCAL YEAR 2014 Administrative management and general management consulting services 22% All other information services 17% Other computer related services 9% Computer systems design services 8% Custom computer programming services 7% Commercial and institutional building construction 3% Advertising agencies 3% Facilities support services 3% Temporary help services 2% Other 53 CONSUMER FINANCIAL PROTECTION BUREAU 26% TABLE 19: PERCENTAGE OF TOTAL OBLIGATIONS BY NAICS CODE GROUPING FOR FISCAL YEAR 2014 All other information services 17% Administrative management and general.. 13% Computer systems design services 8% Other computer related services 8% Custom computer programming services 70/0 Architectural services 6% Facilities support services 4% Data processing, hosting, and related.. 40/0 Computer and software stores 2% Wireless telecommunications carriers.. 2% Direct health and medical insurance carriers 2% Other accounting services 2% Other 24% 5.2 Interagency collaboration on supplier diversity initiatives The CFPB OMWI is a member of an interagency working group of OMWIs which includes the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Federal Reserve Board of Governors, the Department of the Treasury, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission. This working group meets on a regular basis to explore shared supplier diversity issues and to plan and implement initiatives that foster supplier diversity within the agencies. In Calendar Year 2016, the CFPB and interagency partners participated in a number of procurement events targeted at establishing connections and recruiting diverse suppliers. OMWI has continued to distribute materials developed jointly with partners, including information on OMWI's directives and other financial agency contracting information. OMWI also provided information on Federal contracting processes when meeting with minority-owned 54 CONSUMER FINANCIAL PROTECTION BUREAU and women-owned businesses seeking Federal procurement opportunities. The working group is currently working on developing standardized supplier diversity metrics that will provide data for reports to the public. 5.3 Supplier diversity training and resources One of the strategies proven to be effective in expanding the pool of minority-owned and women-owned businesses interested in procurement opportunities with the Bureau has been to provide potential business partners with information on the process for doing business with the Bureau. Over the past three years, OMWI and the Office of Procurement have increased their outreach and information sessions and have provided training on how to do business with the Bureau. In Calendar Year 2016 this program was put on hold due to personnel shortages. In addition, OMWI has developed and continually updated a number of practical resources for minority-owned and women-owned businesses seeking to do business with the Bureau. These materials included information on historical obligations by products and services categories, a forecast of future procurements, and information on small business set-asides. In Calendar Year 2016, OMWI worked with the Office of Procurement to make these resources available digitally and updated them regularly on the CFPB's website: htt •//vvvvw consumerfinance goy/doingbusiness-with-us/. 5.4 Outreach for supplier diversity One of the key supplier diversity priorities continues to be familiarizing minority-owned, women-owned and other disadvantaged businesses with the Bureau's procurement policies and with information on the opportunities for doing business with the Bureau. To address that priority, OMWI has developed an outreach program to introduce the Bureau to the vendor community, and to begin to build relationships with prospective vendors. The expected outcome is continued growth in the award of contracts. This program which was developed in FY 2013 has continued to evolve over the past three years. Components of the program include: • 55 Establishing and developing relationships with key business stakeholders, industry CONSUMER FINANCIAL PROTECTION BUREAU groups, and trade groups; Participating as speakers on panels, attending supplier diversity events, and co-locating with other federal partners at events when available; • Distributing literature and educational materials aimed at minority-owned and womenowned businesses; Collaborating with the Office of Procurement on a series of outreach events targeted at minority-owned and women-owned businesses; and Establishing recurring Supplier Diversity Procurement Workshops to assist minorityowned and women-owned businesses seeking CFPB opportunities. Over the past two years, OMWI engaged with several organizations to increase the participation by minority-owned and women-owned businesses in procurement activities. To develop and maintain relationships and partnerships with business organizations, OMWI participated in "matchmaking" events, business fairs, and scheduled OMWI Director and other OMWI staff to speak on a number of panels. A comprehensive list of the organizations that OMWI engaged with is included in Appendix C. 56 CONSUMER FINANCIAL PROTECTION BUREAU 6. Regulated entities As mentioned abov ,the CFPB is a regular participant in an interagency working group consisting of OMWI Directors from the Federal Deposit Insurance Corporation, the Federal Housing Finance A ency, the Federal Reserve Board of Governors, the Department of the Treasury, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission. On October 25, 2013, the CFPB, along with the OCC, the Federal Reserve Board, the FDIC, the NCUA, and the SEC, released a proposed policy statement establishing joint standards for assessing the diversity policies and practices of entities regulated by the agencies. These standards were published in the Federal Register for comment, and comments were sent back to the agencies by February 7,2014. These agencies reviewed the comments and developed a final policy statement which was published in the Federal Register on June 10, 2015. In 2016, OMWI continued the planning needed for initiatives related to the new standards.40 This planning work included: • Creating a self-assessment tool that will be offered to entities to assess their diversity and inclusion policies and practices, Identifying key stakeholders, both internal and external to the CFPB, and establishing lines of collaboration so that when the standards are implemented, the process will be smooth and effective; and 40 https://www federalregiscer.crovidocumencs/2015/06/10/2015-14'26/fmal-interagency-policy-statemencestablishing-toinc-standards-for-assessing:the-diversity-policies 57 CONSUMER FINANCIAL PROTECTION BUREAU • Building the Bureau processes for ensuring separation of the implementation of the standards from other Bureau engagements with the regulated entities. In November 2016, the CFPB OMWI hosted an initial roundtable listening session with members of the mortgage industry in order to learn more about their experiences, practices and challenges with diversity and inclusion management practices. The roundtable was attended by 20 variously-sized organizations in the mortgage industry, and OMWI Directors from other financial regulatory agencies. The meeting was designed to provide an opportunity for participants to exchange ideas and to learn about common practices that currently exist in the mortgage industry to further diversity and inclusion among participants in that industry. 58 CONSUMER FINANCIAL PROTECTION BUREAU 7. Summary of Major Accomplishments, Challenges and Next Steps 7.1 Major accomplishments The CFPB has made important strides in diversity and inclusion in 2016. The following are some of the Bureau's key accomplishments: The CFPB earned acknowledgment for its diversity and inclusion initiatives by external organizations, among them: 1) the Partnership for Public Service ranked the CFPB fourth among 26 peer agencies in its "Support for Diversity" category ranking for 2016:2) the Professional Diversity Network (PDN) named the Bureau as one of the "Top 10 Leading Employers in Diversity"; and 3) disABLEDmagazine named the CFPB one of the top thirteen Best Federal Agency Employers for persons with disabilities. On the 2016 Annual Employee Survey (AES) conducted by OPM, the Bureau consistently outperformed the government-wide average on the Inclusion Quotient, which is a measure of the extent to which employees experience the Bureau as inclusive. In Calendar year 2016, the divisions of the Bureau began to develop and implement diversity and inclusion goals and objectives in their divisional strategic plans reporting 59 CONSUMER FINANCIAL PROTECTION BUREAU on their progress to the Bureau Director. The Bureau also developed its first Bureauwide diversity and inclusion strategic plan in 2016.41 OMWI continued training managers on leading practices in diversity and inclusion. By the end of Calendar Year 2016, over 75% of managers had completed the required training. Likewise, over 75% of non-supervisory employees completed a two-hour mandatory introductory training on diversity and inclusion principles. The CFPB implemented a policy for the creation of Employee Resource Groups, (ERG) and two ERGs were created in 2016. The Bureau created a Diversity and Inclusion Council of Employees (DICE) that has been well received by employees and managers. The DICE advises OMWI on diversity and inclusion matters of importance to employees, and assists in the implementation of new initiatives. The Bureau developed a policy to protect transgender employees' rights and to ensure an inclusive and hospitable work environment for all. The Bureau began working to implement thejoint Standards for Assessing the Diversity Policies and Practicesof entities it regulates. 42 7.2 Challenges and next steps While the Bureau has made substantial progress on its strategies for diversity and inclusion in 2016, there is still work ahead. The following are some of the areas the Bureau is working on going forward: 41 haps //s3 amazonders corn/Ides consconerionene gov/f/docurneors/201611_cipb diver say-rind-inclusionsrratc60-plan-2016-2020 pdf 42 https://varrovi federal'. egri scer.frovid ocu men cs/2015/06/10/2015-14 26/fina I-interagency-poll cy-staternenc- esta blishing-roinc-standards-for-3 ssessing-the-divers ity-poll cies 60 CONSUMER FINANCIAL PROTECTION BUREAU The Bureau has reviewed and revised its hiring processes as appropriate to ensure continued access to opportunity for all applicants. Because some mission critical occupations show an underrepresentation of certain demographic groups and a limited pool of qualified professionals from which to draw for certain positions, efforts are ongoing to support recruitment in those occupations. To help in doing so, revisions include training for hiring managers to minimize any unconscious bias in the hiring processes and to level the playing field for all applicants; 43 and the effectiveness of the hiring processes is reviewed on an ongoing basis to ensure that they are effective and relevant in achieving results. • In the fast-paced work environment of the CFPB, the time and effort needed to develop and implement meaningful and sustainable diversity and inclusion strategies could sometimes be seen as a diversion from mission critical work, were it not for the Bureau's work in closely linking diversity and inclusion with mission critical work. Therefore, the Bureau has intentionally developed and discussed the Bureau's business case for diversity and inclusion and the critical connection of diversity and inclusion to creating relevant and innovative solutions for all consumers. • In 2017, the CFPB will continue prioritizing initiatives that strengthen diversity and inclusion in the workplace, which will include: ~~ Continuing to work with divisions on strengthening their diversity and inclusion goals and initiatives into their strategic plans. ~~ Providing training to managers and non-supervisory employees to build their competence for managing and interacting effectively in the Bureau's diverse workplace. 43 For a detailed report on this see the Bureau's MD-715 report at: httoslowww.consumerfinance.govidata- research/research-reporis/equal-employmeni-ooportunity eeo program status repon litical year fy 2 OH/ [to be updated when 2016 report is posted] 61 CONSUMER FINANCIAL PROTECTION BUREAU in Continuing the efforts to better understand and close gaps in hiring individuals from underrepresented groups where barriers to access exist. O Implementing programs to raise awareness among current vendors and within its business units about the good faith requirements of the Dodd-Frank Act. O Promoting supplier diversity by identifying potential minority-owned and womenowned businesses with the capability needed to provide the goods and services being procured by the Bureau, and inviting them into the competitive bidding process for such contracts. u Hosting industry-focused events at the CFPB to connect potential diverse suppliers to the CFPB buyers. in Tracking supplier diversity spending and sharing information broadly with divisions to encourage the use of diverse suppliers as part of the routine business practice. O Continuing to increase opportunities for minority-owned and women-owned businesses at the CFPB by providing tools, resources and technical assistance to such businesses about the processes involved in government contracting. 62 CONSUMER FINANCIAL PROTECTION BUREAU APPENDIX A: Recruitment outreach TABLE 20. UNIVERSITY RECRUITMENT 2016 College, University and Graduate School Recruiting Barnard College University of California — Berkeley California State University — Fullerton University of California — Riverside University of Chicago Columbia University Duke University University of Florida Gallaudet University George Mason University George Washington University Georgetown University Hampton University Harvard University University of Houston Howard University Johns Hopkins University University of Maryland 63 CONSUMER FINANCIAL PROTECTION BUREAU 2016 College, University and Graduate School Recruiting Massachusetts Institute of Technology University of Illinois — Urbana Champaign University of Michigan Michigan State University Morehouse College Morgan State University New York University University of North Carolina — Chapel Hill North Carolina A&T University Northwestern University University of Pennsylvania Greater Philadelphia Area Law Schools Rice University Rutgers University Spelman College Stanford University University of Texas at Austin Texas A&M University Tufts University Utica College University of Virginia College of William & Mary University of Wisconsin Yale University 64 CONSUMER FINANCIAL PROTECTION BUREAU The CFPB also engages in extensive outreach for experienced professionals and experts and utilizes the broad reach of professional organizations to access potential candidates. In 2016 the Bureau attended the following recruiting events: Association of Latino Professionals in Finance & Accounting ("ALPFA") Central Region Student Symposium Career Fair — Houston, TX ALPFA Southeast Region Student Symposium Career Fair — Orlando, FL • ALPFA National Convention — Lake Buena Vista, FL • ALPFA Northeast Region Student Symposium Career Fair — Newark, NJ Congressional Black Caucus ("CBC") Annual Conference — Washington, D.C. East Coast Asian American Student Union ("ECAASU") Conference — Washington, D.C. Equal Opportunity Publications STEM Career Fair - Washington, D.C. • Hispanic National Bar Association ("HNBA") 40th Annual Convention — Boston, MA. Lavender Law Conference & Career Fair (LGBT Bar Association) - New York, NY The League of United Latin American Citizens ("LU LAC") National Conference & Expo — Salt Lake City, UT National Asian Pacific American Bar Association ("NAPABA") Annual Convention — New Orleans, LA • National Association for the Advancement of Colored People ("NAACP") Annual Convention — Philadelphia, PA • National Association of Asian American Professionals ("NAAAP") National Conference & Diversity Career Fair — Anaheim, CA National Association of Black Accountants ("NABA") — Eastern and Southern Conferences National Association of Women MBAs ("NAWMBA") Conference & Career Fair — Houston, TX The National Bar Association Annual Convention — Los Angeles, CA 65 CONSUMER FINANCIAL PROTECTION BUREAU • National Black MBA Association ("NBMBAA") Annual Conference & Expo — Orlando, FL National Council of La Raza ("NCLR") National Expo — Kansas City, MO National Society of Hispanic MBAs ("NSH MBA") Conference & Career Expo — Chicago, IL National Urban League Annual Conference — Ft. Lauderdale, FL • 66 Women of Color (STEM) CONSUMER FINANCIAL PROTECTION BUREAU APPENDIX B: Heritage months diversity events TABLE 21: HERITAGE MONTH AND DIVERSITY EVENTS Heritage Month and Diversity Events National Disability Employment Awareness Month Panel Presentation Black History Month: Lunch and Learn featuring U.S. Representative Keith Ellison, Minnesota's 591 Congressional District Public Service Recognition Week: Presentation from the Hon. Andrew Young, former Ambassador to the United Nations, U.S. Congressman, and Mayor World Day for Cultural Diversity: A day to learn about and celebrate the cultures of CFPB employees The Life and Experiences of a Supreme Court Justice: A Conversation with the Hon. Sonia Sotomayor Date February 10, 2016 February 23, 2016 May 4,2016 May 19, 2016 June 7,2016 LGBTQ+ Pride Month: Presentation on LGBTQ+ Workplace Rights featuring Louis Lopez, Associate Special Counsel, U.S. Office of Special Counsel, and two OCR employees/LGBTQ+ legal experts, and Observance Honoring the Victims of Orlando Hate Crime LGBTQ+ Pride Month: Screening of a film, narrated by Michael lsakoff that explored the U.S. Government's policies related to LGBTO-h employees and the impact of those policies on the lives of those employees. Caribbean American Heritage Month: A cultural celebration to educate about the Caribbean region and its role in American History 10/12/16- e Annual Hispanic Heritage Month Potluck a celebration of culture and contributions from the Hispanic community 67 CONSUMER FINANCIAL PROTECTION BUREAU June 22, 2016 June 29, 2016 June 30, 2016 October 12, 2016 APPENDIX C: Organizations with which OMWI had outreach engagements in 2015-2016 The Congressional Black Caucus Foundation The National Urban League • CFPB Supplier Diversity Workshop The Federal Reserve Board Vendor Outreach Fair 25th Annual Government Procurement Conference • OMWI Interagency Technical Assistance Day The League of United Latin American Citizens The National Council of La Raza National Minority Supplier Development Council Conference & Business Opportunity Fair The Women Business Enterprise National Council (WBENC) 68 • National Contract Management Association World Congress 2016 • National Hispanic Leadership Agenda INHLA1 CONSUMER FINANCIAL PROTECTION BUREAU January 2017 Equal Employment Opportunity (EEO) program status report for fiscal year (FY) 2016 Consumer Financial Protection Bureau 1. Agency identifying information 3 2. Total employment 4 3. Leadership 6 4. List of subordinate components covered in this report 7 5. Executive summary 8 5.1 Essential Element 1: Demonstrated commitment from agency leadership 12 5.2 Essential Element 2: Integration of EEO into agency's strategic mission16 5.3 Essential Element 3: Management and program accountability 33 5.4 Essential Element 4: Proactive prevention 46 5.5 Essential Element 5: Efficiency 53 5.6 Essential Element 6: Responsiveness and legal compliance 58 6. Summary of workforce profiles 60 7. Workplace analysis 61 7.1 Permanent workforce: participation of class grouping 63 7.2 Temporary workforce: participation of class grouping 64 7.3 Analysis of senior pay bands by grouping (permanent employees) 65 7.4 New hires: permanent 66 7.5 New hires: temporary 67 7.6 Mission critical occupations 68 7.7 Non-competitive promotion eligibility 74 7.8 Separations 77 7.9 Awards 81 EEO PROGRAM STATUS REPORT FOR FY 2016 8. Certification of establishment of continuing equal employment opportunity programs 84 9. EEO program self-assessment checklist 86 10. EEO plan for attaining the essential elements of a model EEO program 87 11. EEO plan to eliminate identified barriers 95 12. Special program plan for the recruitment, hiring, and advancement of individuals with targeted disabilities 2 EEO PROGRAM STATUS REPORT FOR FY 2016 110 1. Agency identifying information TABLE 1: AGENCY IDENTIFYING INFORMATION Part A 3 1. Agency Consumer Financial Protection Bureau (CFPB or Bureau) 2. Address 1700 G Street NW 3. City, State, Zip code Washington, D.C. 20552 4. CPDF Code FRFT 5. ANSI codes 11001, 06075, 17031, 36061 EEO PROGRAM STATUS REPORT FOR FY 2016 2. Total employment TABLE 2- TOTAL EMPLOYMENT Part B Permanent full-time and part-time employees Temporary employees Employees paid from nonappropriated funds Total employment 1,494 151 0 1,645 Data as of September 30, 2016. Workforce numbers for FY 2015 included in this FY 2016 Status Report may differ slightly from corresponding data reported in the FY 2015 Status Report. This is due to retroactive processing of personnel actions, late processing of personnel actions, or other changes made in applicable data systems since the data was finalized for the FY 2015 Status Report. 4 EEO PROGRAM STATUS REPORT FOR FY 2016 FIGURE 1: TOTAL EMPLOYMENT Temporary Employees 1 (9%) V Permanent Employees 1,494(91%) 5 EEO PROGRAM STATUS REPORT FOR FY 2016 3. Leadership TABLE 3- LEADERSHIP Part C Head of agency Richard Cordray Director Consumer Financial Protection Bureau Stuart Ishimaro Director Office of Equal Opportunity & Fairness Agency Head Designees M. Stacey Bach Director Office of Civil Rights Richard Cord ray, Director, Consumer Financial Protection Bureau 6 EEO PROGRAM STATUS REPORT FOR FY 2016 4. List of subordinate components covered in this report FIGURE 2: CFPB SUPERVISION REGIONS ‘,L t it tt •Northeast pe I I Southeast t-7 ,0 Regions Northeast • Southeast • Midwest • West EEO PROGRAM STATUS REPORT FOR FY 2016 5. Executive summary Overview This Equal Employment Opportunity (EEO) Program Status Report for Fiscal Year (FY) 2016 is prepared and submitted pursuant to the Equal Employment Opportunity Commission's Management Directive 715 (MD-715), and accompanying instructions and guidance. This report highlights accomplishments by the Consumer Financial Protection Bureau (CFPB or the Bureau or the Agency) in FY 2016 in continuing to establish and solidify its EEO Program. This report also identifies areas where the Bureau will take further actions to enhance its EEO Program. Mission CFPB is the nation's first federal agency focused solely on consumer financial protection. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. No. 111-203) (July 21, 2010) (Dodd-Frank Act) created CFPB to protect consumers and to encourage fair and competitive consumer financial markets. CFPB officially began operations on July 21, 2011. At the end of FY 2016, the Bureau consisted of 1,645 employees (permanent and temporary). CFPB's mission is to make markets for consumer financial products and services work for people in America — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products. CFPB helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their lives. When CFPB achieves its mission, it will have facilitated the development of a consumer finance marketplace where consumers can see prices and risks and can easily make product comparisons. The envisioned consumer finance marketplace will work for consumers in America, responsible providers, and the economy. CFPB is achieving its mission and vision through data-driven analysis, innovative use of technology, and valuing great teamwork and top talent. CFPB is using data purposefully to support informed decision-making in all internal and external functions. CFPB strives to be an a EEO PROGRAM STATUS REPORT FOR FY 2016 innovative, 21st century agency in its approach to technology. Finally, CFPB invests in worldclass training, development, and support to create an environment that encourages employees at all levels to tackle complex challenges. To accomplish these goals, CFPB is divided into six Divisions: • Consumer Education & Engagement (CEE) Supervision, Enforcement, & Fair Lending (SEEL) Research, Markets, & Regulations (RMR) • External Affairs (EA) Legal (LD) Operations (OPS) These Divisions work together to: • Write rules, supervise regulated entities, and enforce federal consumer financial protection laws; • Restrict unfair, deceptive, or abusive acts or practices; Take consumer complaints; Promote financial education; • Research consumer behavior; • Monitor financial markets for new risks to consumers; and Enforce laws that prohibit discrimination and other unfair treatment in consumer finance. EEO Structure The accomplishments and developments highlighted in this report stem from collaboration between the various CFPB offices responsible for aspects of the Agency's EEO program. The Bureau has an Office of Equal Opportunity & Fairness (0E0F), which is housed directly in the Office of the Director of CFPB. OEOF is comprised of the Office of Civil Rights (OCR) and the 9 EEO PROGRAM STATUS REPORT FOR FY 2016 Office of Minority and Women Inclusion (OMWI). The Director of OEOF reports directly to the Director of CFPB. OCR has operated since February 2013. It works to ensure that CFPB complies with all federal EEO laws and related civil rights protections; provides a neutral forum for the discussion, investigation, and resolution of certain EEO matters; and strives to integrate EEO into CFPB's everyday work. OCR also works to empower individuals to participate constructively to their fullest potential in support of CFPB's mission. OCR endeavors to ensure that CFPB reflects the rich diversity of the nation and provides a full and fair opportunity for all employees and applicants, and that CFPB employees have the working environment that will support them in their efforts to protect consumers. Among other services, OCR provides policy and technical advice on EEO and civil rights to the CFPB Director and senior leadership, and manages the Bureau's EEO complaint process pursuant to 29 C.F.R. Part 1614. The Bureau's EEO Program works to ensure the EEOC's six essential elements of a model EEO Program are incorporated into the fabric of the Bureau, thus supporting the goal of maintaining a discrimination-free workplace for all. The Director of OCR (like the Director of OEOF) reports directly to the Director of CFPB.I OCR emphasizes and maintains its neutrality and impartiality, which is critical to having an efficient and fair EEO complaint resolution process. This ensures that employees and managers know that the pre-complaint and investigation stages of the Part 1614 process are not adversarial, that OCR will provide a neutral and impartial factual record, and that, when requested, OCR will issue a final decision assessing the facts and law to determine whether or not one or more of the applicable employment discrimination laws have been violated. The OCR Director exercises full authority to carry out the Part 1614 functions of OCR without Legal Division (i.e., General Counsel) involvement, thus ensuring impartiality and removing any possible conflict of interest. Legal resources within OCR make this possible. OCR staff, sometimes with the assistance of contractors, conducts legal sufficiency reviews of EEO matters, 1 The OCR Director is a CFPB Assistant Director. For purposes of this report, the term "OCR Director" will be used. 10 EEO PROGRAM STATUS REPORT FOR FY 2016 which includes issuing accept/dismiss decisions addressing jurisdiction over and scope of claims set forth in formal complaints, Reports of Investigations (ROIs), and Final Agency Decisions (FADs). The Legal Division, which defends the Bureau in these matters, is firewalled from all activities within OCR and only participates during adversarial portions of the EEO process (hearings and appeals), and during settlement negotiations, or to provide appropriate legal advice or assistance when a manager or supervisor requests it during the course of an EEO investigation. All other Bureau offices are similarly firewalled and kept separate as necessary and appropriate to avoid conflicting or competing interests. At the same time, while OCR maintains primary responsibility for the Agency's overall FE0 program, it collaborates extensively with both OMWI and the Bureau's Office of Human Capital (OHC) to ensure fairness and equality under the law for all employees and applicants for employment. Pursuant to Section 342 of the Dodd-Frank Act, OMWI develops standards for equal employment opportunity and diversity, which OHC incorporates into CFPB Human Capital Management. OCR, OMWI, and OHC monitor the impacts and results of these standards, cultivate successful policies and practices to reinforce them, and develop enhancement strategies to strengthen all EEO and diversity and inclusion programs Bureauwide. OCR cooperates with OHC, in particular, related to the reasonable accommodation and harassment prevention programs OHC administers. OCR maximizes appropriate partnerships with Bureau leadership, management, diversity committees (such as the Agency's Executive Advisory Council (FAC) and Diversity and Inclusion Council of Employees (DICE)), Employee Resource Groups, other employees, and with the National Treasury Employees Union (NTEU) to achieve OCR's and the Bureau's mission and vision. EEO self-assessment and action items Throughout FY 2016, CFPB made significant strides in developing a model FE0 Program by conducting self-assessments pursuant to MD-715. CFPB also implemented various action items delineated in its FY 2015 Program Status Report. The Bureau incorporated each of the Six Essential Elements for a model EEO program outlined in MD-715: Demonstrated commitment from Agency leadership; • Integration of EEO into the Agency's strategic mission; Management and program accountability; 11 EEO PROGRAM STATUS REPORT FOR FY 2016 • Proactive prevention of unlawful discrimination; Efficiency; and • Responsiveness and legal compliance. 5.1 Essential Element 1: Demonstrated commitment from agency leadership Management Directive 715 requires agency heads and other senior management officials to demonstrate a firm commitment to equality of opportunity for all employees and applicants for employment. According to MD-715: Agencies must translate equal opportunity into every day practice and make those principles a fundamental part of agency culture. This commitment to equal opportunity must be embraced by agency leadership and communicated through the ranks from the top down. It is the responsibility of each agency head to take such measures as may be necessary to incorporate the principles of equal employment opportunity into the agency's organizational structure. To this end, agency heads must issue a written policy statement expressing their commitment to equal employment opportunity (EEO) and a workplace free of discriminatory harassment.2 During FY 2016, CFPB demonstrated its commitment to ensuring that talented and diverse staff have equal employment opportunities and are treated fairly and with respect, and that Bureau leadership enforces the standards of fairness that it expects of the companies and industries it regulates. The Bureau is dedicated to maintaining a workplace that promotes professionalism and productivity, respects the dignity of all, and embraces education of employees about their 2 See Management Directive 715 (Oct. 2003) (MD-715), Model Agency Title Mu and Rehabilitation Act Programs, at Section ILA., available at li aps://vssysteroc.&ov/feder a lid i redives/m UT 5.cfrn . 12 EEO PROGRAM STATUS REPORT FOR FY 2016 EEO rights and responsibilities. Further demonstrating commitment from CFPB leadership, the Bureau ensures that all EEO policy statements are timely and current. Every year, the Agency reissues EEO policy/antiharassment and No FEAR Act statements. CFPB's Director, Richard Cordray, issued the most recent EEO policy/anti-harassment statement in September 2016, reaffirming the Bureau's zero tolerance for workplace discrimination, harassment, or retaliation. Director Cordray also issued a No FEAR Act statement in September 2016, which is available to all CFPB employees, former employees, and applicants on CFPB's external website (as well as on the Bureau's intranet). CFPB provides all new employees with the No FEAR Act statement, the EEO policy/antiharassment statement, and other relevant policies during orientation through a live presentation and a take-away "Guide to the Office of Civil Rights," and provides them again to all employees promoted to supervisory ranks. These policy statements affirm that the CFPB Director, the OCR Director, CFPB managers, and front-line supervisors will uphold and enforce EEO and merit system principles. The policy statements make it clear that equal employment opportunities exist for all employees and applicants for employment, regardless of their race, color, religion, sex (including pregnancy, sexual orientation, transgender status, gender identity or expression, gender non-conformity, or sex stereotyping of any kind), national origin, age, disability, genetic information, prior protected EEO-related activity, and/or whistleblower activity. Further, Director Cordray and senior leadership have publically demonstrated commitment to the EEO program in additional ways. In FY 2016, Director Cordray elevated the position of OCR Director to Executive, reflecting his recognition of the importance of this role to the Bureau's diversity and inclusion and EEO compliance efforts. He also meets monthly with the OCR Director to stay apprised of important EEO-related developments and trends. Similarly, Director Cordray meets monthly with leadership from OMWI to stay informed about diversityfocused initiatives. In FY 2016, Director Cordray also led quarterly diversity and inclusion discussions with leadership of each of the Bureau's various Divisions. Director Cordray also participates — often in a key role — in the Bureau's special observance celebrations. For instance, during the Bureau's National Disability Employment Awareness Month celebration in the fall of 20151 the Director engaged in a robust discussion with CFPB staff about the experiences of Bureau employees with disabilities. In May 2016, Director Cordray participated in an event for Public Service Recognition Week featuring remarks by Ambassador Andrew Young, who shared about his personal story, his work with Dr. Martin Luther King_Jr., 13 EEO PROGRAM STATUS REPORT FOR FY 2016 and his service to the country as U.S. Ambassador to the United Nations and as the mayor of Atlanta. In June 2016, Director Cordray gave opening remarks at CFPB's LGBTQ+ Pride Month celebration, as well. In addition, every week the Director sends out a "Weekly Message" to all employees highlighting the important work the Bureau has recently accomplished. These communications often include messages regarding EEO and diversity and inclusion, and how these principles relate in practice to the mission and operations of the Bureau. Relevant examples are included in the table below. TABLE 4- EEO TOPICS IN DIRECTOR'S WEEKLY MESSAGE DURING FY 2016 EEO Topics in Director's Weekly Message Highlighted National Disability Employment Awareness Month & Helpful Disability Etiquette Tips Announced Solicitor General Donald Verrilli's upcoming CFPB presentation to discuss LGBTO+ rights Referenced Dr. Martin Luther King Jr.'s Letter from a Birmingham Jail Announced CFPB NDEAM Event: "My Disability Is One Part of Who I Am" Reflected on Veterans' Day Discussed implementation of Bureau cultural norms, including diversity and inclusion, into day-to-day activities Referenced unfortunate general discourse in the public arena based on race, ethnicity, and religion Noted Ambassador Andrew Young's remarks about the later stages of Dr. Martin Luther King's work Announced the launch of the Bureau's Diversity and Inclusion Council of Employees (DICE) Mentioned Lilly Ledbeller Fair Pay Act Anniversary Announced Black History Month event featuring U.S. Representative Keith Ellison from Minnesota's 5th Congressional District Noted Office of Civil Rights employee Melissa Brand has been honored by the John Jay College of Criminal Justice for her efforts to help transgender employees and federal agencies navigate the gender transition process Discussed CFPB participation at the winter board meeting of the National Hispanic Leadership Agenda 14 EEO PROGRAM STATUS REPORT FOR FY 2016 Date of Weekly Message October 5,2015 October 19, 2015 October 26, 2015 November 2,2015 November 9, 2015 November 23, 2015 December 14, 2015 January 19, 2016 February 1, 2016 February 1, 2016 February 22, 2016 February 22, 2016 March 7,2016 EEO Topics in Director's Weekly Message Date of Weekly Message Discussed African American Community Leadership roundtable March 21, 2016 Mentioned Perspective on Civil Rights and Economic Rights Presentation from Ambassador Andrew Young May 2, 2016 Announced World Day for Cultural Diversity Celebration May 16, 2016 Addressed Bureau efforts to engage with Spanish-speaking consumers using Twitter and Facebook May 16, 2016 Discussed Older Americans Month campaign to combat consumer scams May 16, 2016 Noted Office of Civil Rights employee Daniel Vail Received the EEOC Pride Chai Feldblum Award for LGBTQ+ rights work May 23, 2016 Noted LGBTat Pride Month and announced release of new Bureau Transgender Non-Discrimination and Inclusion Policy June 6,2016 Addressed Orlando shooting impact on LGBTQ+ community, Latino community, and communities of color Announced upcoming LGBTQ+ Pride Month Lunch and Learn events June 20, 2016 June 20. 2016 Acknowledged the importance of Ramadan June 20, 2016 Recapped screening of documentary, "Uniquely Nasty: The U.S. Government's War on Gays for LGBTQ+ Pride Month June 27. 2016 Addressed discriminatory practices in mortgage lending that harmed African Americans and other minorities July 5,2016 Mentioned Twitter chat in Spanish hosted by the National Council of La Raza in honor of National Homeownership Month July 5,2016 Discussed participation in meeting of Federal Interagency Reentry Council on issues relating to how the nation can be more successful in integrating justice-involved individuals back into our society so that they are able to lead productive lives July 11, 2016 Recapped presentation of keynote remarks at the NAACP's 107th annual convention and discussed economic justice July 25, 2016 Noted consumer advocates representing national civil rights organizations spoke at CFPB All Hands Meeting August 8,2016 Discussed Director's meeting with the Bureau's Diversity and Inclusion Council of Employees (DICE) August 15, 2016 Announced response to Services and Advocacy for LGBT Elders (SAGE) inquiry regarding coverage of sexual orientationand gender-identity-related discrimination under laws Bureau enforces Announced the Professional Diversity Network bestowed its Diversity Excellence Award on Bureau, naming it as one of its 15 EEO PROGRAM STATUS REPORT FOR FY 2016 September 6,2016 September 19, 2016 EEO Topics in Director's Weekly Message Top 10 Leading Employers in Diversity from 2,200 employers across the nation Discussed roundtable on how student debt affects communities of color Highlighted release of Director's Annual EEO and Workplace Harassment Statement and No Fear Act Notice Date of Weekly Message September 19, 2016 September 19, 2016 These are just a few examples of the many actions senior leaders have taken to demonstrate their strong personal commitment to guaranteeing equal employment opportunities for all employees. Director Cordray is a champion of the Bureau's EEO program. 5.2 Essential Element 2: Integration of EEO into agency's strategic mission Management Directive 715 notes that equality of opportunity is essential to attracting, developing, and retaining the most qualified workforce to support an agency's achievement of its strategic mission. To this end, under MD-715 (and in addition to the regulatory requirements found at 29 C.F.R. § 1614.102(6)(4), as interpreted in Management Directive 110) the Bureau must: Maintain a reporting structure that provides the Agency's EEO Director with regular access to the Agency head and other senior management officials for reporting on the effectiveness, efficiency, and legal compliance of the Agency's Title VII and Rehabilitation Act programs. To emphasize the importance of the position, the Agency head should be involved in the selection and performance review of the EEO Director. Ensure EEO professionals are involved with, and consulted on, the management and deployment of human resources. The EEO Director should be a regular participant in senior staff meetings and regularly consulted on human resources issues. Allocate sufficient resources to create and/or maintain Title VII and Rehabilitation Act programs that (1) identify and eliminate barriers that impair the ability of individuals to compete in the workplace because of race, national origin, sex, or disability; (2) establish and maintain training and education programs designed to provide maximum 16 EEO PROGRAM STATUS REPORT FOR FY 2016 opportunity for all employees to advance; and (3) ensure that unlawful discrimination in the workplace is promptly corrected and addressed. Attract, develop, and retain EEO staff with the strategic competencies necessary to accomplish the Agency's EEO mission, and interface with Agency officials, managers and employees. • Recruit, hire, develop, and retain supervisors and managers who have effective managerial, communications, and interpersonal skills. Provide managers and supervisors with appropriate training and other resources to understand and successfully discharge their duties and responsibilities. Involve managers and employees in the implementation of the Agency's Title VII and Rehabilitation Act programs. Use various media to distribute EEO information concerning federal EEO laws, regulations and requirements, rights, duties, and responsibilities and to promote best workplace practices.3 These aspects of integrating EEO into the Bureau's strategic mission are discussed in greater detail below. Reporting structure CFPB's reporting structure allows the OCR Director to have direct and regular access to CFPB's Director and other senior level management officials. OCR is located within OEOF, which is a part of the CFPB Director's Executive Office. The OCR Director reports directly to the CFPB Director on EEO matters and to the OEOF Director on all administrative matters. This reporting structure allows the EEO program to be run efficiently and effectively. Critically, this reporting structure provides the OCR Director with the autonomy and authority needed to carry out a successful EEO Program while also leveraging synergies between the work of OCR and OMWI. 3 See MD-715, Model Agency Title VII and Rehabilitation Act Programs, at Section JIB., available at liaps://vvvolviecc.8ovfiederal/direcLives/mLITS.cfrn. 17 EEO PROGRAM STATUS REPORT FOR FY 2016 The major duties and responsibilities of the OCR Director are clearly defined and include developing, implementing, and managing comprehensive, broad-scope CFPB EEO policies, programs, and services. The OCR Director also serves as the principal technical advisor to the CFPB Director and to the Bureau's leadership on EEO and civil rights issues and policies, and is readily available for consultation purposes. Further, the OCR Director has access to other senior management officials for reporting on the effectiveness, efficiency, and legal compliance of the Bureau's EEO program. The OCR Director meets monthly with CFPB's Director and the CFPB Chief of Staff, and meets with senior leadership, including the CFPB Director, the CFPB Deputy Director, the OMWI Director, and all CFPB Associate Directors to provide updates on the EEO Program. For example, following the submission of the Bureau's FY 2015 EEO Program Status Report, the OCR Director presented to the CFPB's Director and other senior officials the "State of the Agency" briefing, which covered all components of the Bureau's EEO Program Status Report. During other senior leadership meetings, the OCR Director provided additional EEO-related updates to management and supervisory officials. In FY 2016, the Bureau's Quarterly Performance Review (QPR) process also allowed a guided dialogue between 0E0F, individual divisions, and the Office of the Director where compliance, diversity, and inclusion metrics are assessed. Collaboration To ensure integration of EEO into the Bureau's strategic mission, the OCR Director collaborates closely with OHC and OMWI, as well as other stakeholders across CFPB. Positive working relationships have been established that support information-sharing and best practices among the offices. The Chief Human Capital Officer (CHCO) and OCR Director meet to discuss whether personnel programs, policies, and procedures are in conformity with instructions contained in EEOC regulations, Management Directives, and other guidance. Further, OHC confers with OMWI and OCR for advice and consultation for guidance on diversity outreach strategy and approach, training curriculum and goals, and operational improvements that support compliance and diversity before making decisions. For instance, OCR has: Continued to participate in the Bureau's efforts to implement the agency's Diversity and Inclusion (D&I) Strategic Plan, first adopted in 2015. This plan outlines CFPB's affirmative employment and diversity and inclusion goals and priorities, and the specific actions that will support them. • 18 Continued to collaborate with OHC to enhance supervisory and employee training EEO PROGRAM STATUS REPORT FOR FY 2016 offered by OHC, to ensure that EEO compliance and diversity and inclusion concepts are addressed in New Employee Orientation, supervisory development and leadership excellence seminars, performance management training, etc. • Continued to work with OHC to encourage and maintain relationships with, and outreach to, professional organizations that represent Veterans, Disabled Veterans, Hispanics, and other minority constituencies. This includes attending career fairs and professional association meetings throughout the year to meet and provide information on CFPB, and on employment opportunities, including posting vacancies on bulletin boards geared to these groups of professionals. (See more information on the Bureau's overall recruiting efforts below.) • Partnered with OHC to analyze the results of the Annual Employee Survey (AES) to examine employee perceptions of the Bureau across demographic groups, and to use the Inclusion Quotient index, included in the AES, in planning to help all employees feel a greater sense of inclusion. • Helped assemble a cross-agency workgroup comprised of senior leaders in OCR, OWMI, OHC, the Executive Advisory Council (EAC), and the Bureau's Office of Strategy to recommend improvements to CFPB's hiring processes to minimize the potential for barriers to employment by various demographic groups. Participated on the Working Committee for the Bureau's "Workforce of the Future" (WFF) initiative. WFF was established to focus the Bureau's efforts in building a great organization with the overarching goal of making CEPB a sustainable organization and a great place to work. WFF adopted four "norms" for Bureau culture: (1) We will value diversity and inclusion; (2)We will treat each other as partners, not adversaries; (3) We will be disciplined in how we make decisions and set priorities; and (4) We will hold ourselves and each other accountable for these norms. Advised on the development and implementation of the Bureau's new Awards and Recognition program, established to recognize and reward employees for exceptional achievements above and beyond the scope of their normal duties and responsibilities, and to promote the Bureau's core values to Serve, Lead, and Innovate, and the Agency's WFF cultural and behavioral norms. Provided technical assistance to the Bureau's Legal Division, OHC Employee and Labor Relations Team, and NTEU in the negotiation of EEO-related articles in the Bureau's 19 EEO PROGRAM STATUS REPORT FOR FY 2016 collective bargaining agreement. Consulted and collaborated with OHC to analyze and encourage OHC to implement recommendations contained in the Report of Co-Chairs Commissioner Chai Feldblum and Victoria Lipnic of the EEOC's Select Task Force on the Study of Harassment in the Workplace related to effective anti-harassment programs.4 OHC, OCR, and OMWI also have continued discussions to better define roles and responsibilities among the offices, and then to acquire and assign additional personnel resources, as necessary, to support the EEO Program. Resources for the EEO program During FY 2016, the Bureau allocated additional resources OCR requested to ensure that the EEO Program remains successful and operates in an effective manner. This has proved vital to ensuring integration of EEO into the Agency's strategic mission. During FY 2016, OCR secured approval to onboard additional full-time and shared resources. OCR hired an individual formerly from the EEOC's Office of Federal Operations (0F0) — with extensive experience as an Appellate Review Attorney and as an Administrative Judge — to serve as the Bureau's EEO Complaints Program Manager. This new program manager focuses on maintaining and enhancing the quality and timeliness of all aspects of the Part 1614 complaint process. OCR also now has a data analyst (sited within OHC and shared with OMWI) to perform trend and other data analyses, such as identifying triggers and barriers to EEO throughout the Bureau.5 In addition, OCR procured approval to hire a Conflict Prevention Program Manager to focus on enhancements to EEO and non-EEO alternative dispute resolution (ADR) options. This 4 This report can be found at https://volvw.ceoc.govieeoc/task_force/Harassmentheportifm. 5 The EEOC defines a "trigger" to mean merely a data point "which alerts the agency to the possible existence of a harrier to equal opportunity." See Frequently Asked Questions About Management Directive 715, at Question 7 (emphasis added), available at https://vowekeoc.gov/lederal/directiveskianda_md715.cfm . A "barrier" is a specific agency policy, procedure, or practice that limits employment opportunities for members of a particular EEO group. The presence of a "trigger" does not necessarily suggest that a barrier to equal employment opportunity exists, much less that any possible barrier is unlawful. 20 EEO PROGRAM STATUS REPORT FOR FY 2016 individual onboarded early in FY 2017, and has brought extensive expertise from prior positions with the EEOC, the Employment Litigation Section in the Civil Rights Division of the U.S. Department of justice, and (most recently) the Office of Compliance in Congress, where he led the nationwide ADR program for Congress (30,000+ employees). In an attempt to leverage expertise from within the Bureau, OCR also has detailed a Senior Attorney and leader from another CFPB division for a four-month period to assist OCR in evaluating ADR efforts. These newer resources add to the existing permanent, full-time OCR staff, which includes the OCR Director, a Senior Counsel, a General Attorney, an EEO Specialist, a Paralegal Specialist, and a Senior Administrative Officer. OCR also shares an Administrative Assistant with OMWI. The Bureau does not yet have a Disability Program Manager and intends to hire one as soon as feasible. OCR will continue to leverage existing resources and to work with partners in OHC and OMWI to facilitate disability-related programming and affirmative employment efforts, including enhancing efforts as feasible given competing demands — consistent with MD-715 and the EEOC's new Section 501 affirmative action regulations€— regarding the hiring, promotion, and retention of individuals with disabilities and targeted disabilities at all CFPB pay bands. In addition, resources (through CFPB staff in OEOF and OHC, contractors, and detailees) are available to identify and work to eliminate barriers to employment for all protected groups. Personnel work together to gather and analyze relevant data (e.g., workforce statistics, complaints data, surveys, focus groups, exit interviews, anecdotal accounts), identify triggers and barriers, devise action plans, and then follow-up to determine the success of the action plans. OCR also has resources available through staff and contractors to ensure that allegations of unlawful discrimination in the workplace are processed in accordance with 29 C.F.R. Part 1614 requirements. Finally, CFPB has allocated financial resources to create and/or maintain necessary Title VII and Rehabilitation Act programs. 6 See 82 Fed. Reg. 654 (Jan. 3,2317). 21 EEO PROGRAM STATUS REPORT FOR FY 2016 Attracting, developing, and retaining EEO staff One vital element to ensuring that EEO is integrated into the mission of the Bureau is to attract, train, and keep well-qualified staff within OCR. As mentioned above, during FY 2016, OCR hired an EEO Complaints Program Manager who previously worked at the EEOC (for approximately 9 years) as both an Administrative Judge and an Appellate Review Attorney within the EEOC's OFO. As also mentioned above, in FY 2016 OCR was allocated additional personnel resources to address critical programmatic needs, such as ADR. During FY 2016, OCR retained all of its permanent, full-time staff members, many of whom were first hired soon after OCR was established in FY 2013. (In FY 2016 an administrative assistant in OEOF did depart to join another federal agency, and OEOF has subsequently onboarded this person's replacement. In early FY 2017, an OCR EEO Specialist retired.) OCR staff has also received training to maintain the competencies necessary to accomplish the Bureau's EEO functions and mission. OCR management has provided or authorized various types of training (including webinars and presentations on significant EEOC cases) and procured helpful resources (such as current-awareness periodicals, treatises, and advanced research tools) to equip EEO staff with the knowledge and skills essential for a successful EEO program. Many of these trainings involve personnel from other Bureau divisions, such as OHC, presenting excellent opportunities for knowledge-sharing and collaboration across the Agency. Formal trainings attended by EEOC staff are included in the table below. TABLE 5: RECENT EEO STAFF TRAINING Training Date Privacy/PI Training October 20, 2015 iComplaints Basics December 2.2015 Encrypted Email Procedures April 12, 2016 Employees with Psychiatric Disabilities April 19. 2016 Pregnancy in the Workplace April 20, 2016 7 Habits of Highly Effective People April 25-27. 2016 Email Management for Lawyers May 10, 2016 7 Common Mistakes Agencies Make in the EEO Process May 18, 2016 22 EEO PROGRAM STATUS REPORT FOR FY 2016 Training EEO Counselor Refresher Training Date May 26, 2016 Deterring and Responding to Harassment June 8,2016 Westlaw Training June 14, 2016 Crucial Conversations (Team-based Communications Training) June 20-21, 2016 Leveraging Disability-Inclusive Outreach June 30, 2016 Hiring, Promotions, and Internal Placement Actions July 12, 2016 EXCEL July 19-21, 2016 Federal Dispute Resolution August 1-4, 2016 Executive Leadership Training September 19-20, 2016 EEO Trends in LGBT & Pregnancy Discrimination September 21, 2016 Pay Equity Demystified: Practical Legal, Data, and Statistical Considerations October 31, 2016 Recruiting, hiring, developing, and retaining supervisors and managers To ensure the Bureau integrates FF0 into its daily mission, CFPB works to hire, develop, and retain supervisors and managers who have effective managerial, communication, and interpersonal skills to supervise most effectively in a workplace with diverse employees and to avoid disputes arising from ineffective communications. One of the Bureau's top diversity and inclusion goals is to recruit talent from a diverse group of potential applicants to develop a highperforming workforce drawn from all segments of American society. Each year, OHC's Talent Acquisition (TA) Team and OMWI, in consultation with OCR, collaborate to develop and execute a comprehensive recruiting program. The Bureau focuses on cultivating relationships with core universities and organizations that best align with the Bureau's hiring needs; conducting targeted diversity outreach through student-based programs and affinity affiliated industry events (e.g., Women in Technology, Hispanics in Law); and making special efforts to enhance the Bureau's visibility with organizations representing diverse populations. This outreach allows the Bureau to market CFPB as an employer of choice and to inform 23 EEO PROGRAM STATUS REPORT FOR FY 2016 potential candidates of upcoming job openings. CFPB's recruitment activity serves as a key part of the Bureau's overall strategy to promote opportunities to a diverse range of candidates from all segments of society. CFPB's goals include: Recruit students and recent graduates. Changing societal demographics and an increase in federal government retirement create an opportunity to hire, promote, and retain new talent at the entry level. Recruit experienced professionals. The Bureau values the experience and expertise of seasoned professionals and alumni whom CFPB encounters at affinity events. These events provide access to mid-level and senior-level talent from the private and public sectors who add to the Bureau's expertise and are potential candidates for management and executive positions (should internal executive selections not be made from the internal management pools). Exposure. Recruiting events provide the Bureau with access to diverse talent pools designed to facilitate connections among parties and build visibility and credibility. • Awareness. Recruiting events enable the Bureau to promote its work and job opportunities to external populations unfamiliar with CFPB. A sampling of recruitment events originally planned for FY 2016 is included in the table below. TABLE 6 2016 RECRUITMENT EVENT SPONSORS 2016 Recruitment Event Sponsors Recruitmilitary Peace Corps Equal Opportunity Publications National Association of Black Accountants Association for Latin Professionals in Finance and Accounting (ALP FA) The League of United Latin American Citizens (LULAC) Public Policy & International Affairs Program (PPIA) National Association for the Advancement of Colored People (NAACP) 24 EEO PROGRAM STATUS REPORT FOR FY 2016 2016 Recruitment Event Sponsors National Bar Association (NBA) National Council of La Raza (NCLR) Ascend Pan-Asian Leaders National Urban League (NUL) National LGBT Bar Foundation Hispanic National Bar Association (HNBA) National Association of Asian MBAs (NAAMBA) Congressional Black Caucus Gallaudet University National Black MBA Association National Asian Pacific American Bar Association (NAPABA) Howard University Atlanta University Consortium (Spelman, Morehouse, Clark Atlanta) The Bureau also uses the Professional Diversity Network (PDN) to advertise opportunities for employment at CFPB. PDN connects the Bureau to eight affinity career sites that provide access to three million registered users. Websites included in this network include ihispano.com , BlackCareerNetwork.com, WomensCareerChannel.com, Military2Career.com, ProAble.net, Acareers.net, OutProNet.com, Black Data Processing Associates, and disABLEDperson.com. To develop and retain managers and supervisors, the Bureau provides appropriate and critical training. This helps ensure CFPB managers and supervisors have — and feel properly equipped with — the skills and competencies needed to fulfill their responsibilities and duties under the Bureau's EEO program, as well as the ability to properly supervise a diverse staff of employees. Relevant training provided includes a mandatory 2-day EEO training through the EEOC Training Institute, a mandatory 2-day diversity and inclusion training, a mandatory 3-day Supervisory Development Seminar (SDS), 8 days of mandatory Leadership Excellence Seminars (LES), and a mandatory training on structured interviewing techniques for all "lead 25 EEO PROGRAM STATUS REPORT FOR FY 2016 interviewers" (as well as annual mandatory No FEAR Act and harassment prevention training required of all Bureau employees). A number of these trainings are sequenced over a multi-year period. For instance, beginning in 2015, the Bureau has required all supervisors and managers to attend a two-day workshop entitled, "Leading Diversity and Inclusion at the Bureau." This workshop focuses on providing managers the awareness, knowledge, and skills needed to give due consideration to differences in culture, backgrounds, and experiences of staff and managers in managerial/supervisory processes, decisions and actions. The training content includes: the business case for managing diversity; the subtle behaviors that signal unconscious bias; the manager's role in creating an inclusive workplace; equitable and bias-free approaches for managing diverse teams; giving effective feedback to diverse teams; managing disagreements across cultural differences; and action planning. Evaluations of the training indicated that participants had a very high level of satisfaction with the content and with the workshop facilitators. OMWI, in collaboration with OCR, also provided training to managers on legal compliance and diversity and inclusion in the performance evaluation process. This training focused on increasing awareness of legal compliance requirements and the types of biases and the ways in which bias can impact the performance evaluation process. TABLE 7- SAMPLE OF TRAININGS FOR MANAGERS AND SUPERVISORS IN FY 2016 Training Diversity and Inclusion in the Performance Evaluation Process Diversity and Inclusion Leaders Training Leadership Excellence Seminars (LES) Supervisory Development Seminars (SDS) EFOC Training Institute 2-Day Manager Training Structured Interview Training (including DiEd and EEO modules) 26 Audience Date All Managers and Supervisors Various Dates All Managers and Supervisors Various dates All Managers and Supervisors Various dates All Managers and Supervisors Various dates All Managers and Supervisors Various dates All Managers and Supervisors who serve as lead interviewers Various dates EEO PROGRAM STATUS REPORT FOR FY 2016 Manager and employee engagement To ensure integration of EEO into its strategic mission, the Bureau also must engage managers and all employees in the Bureau's EEO Program and overall diversity and inclusion efforts. In part to enhance employee engagement, CFPB in 2015 implemented a Diversity and Inclusion (D&I) Strategic Plan. The plan outlines the Agency's affirmative employment and diversity and inclusion goals and priorities, and the specific actions that will support them. From 2016 until 2020, the D&I Strategic Plan will govern diversity and inclusion in the Bureau's workforce, its supplier diversity efforts, and its work to promote diversity among regulated entities. The Bureau engages Division leadership to advance diversity and inclusion initiatives through assignment of a D&I goal in each Divisional Strategic Plan (developed in collaboration with OMWI and the Bureau's Office of Strategy) aimed at increasing the diversity among Division staff, and ensuring that the work environment is inclusive for all employees. The Bureau also facilitates engagement of senior leaders via the Quarterly Performance Review (QPR) process for all Divisions managed by the Office of Strategy. (In FY 2017, the QPR process has changed to a Triannual (three times per year) Performance Review (TPR) process.) The following are some additional specific initiatives currently in place at the Bureau to engage supervisors and managers, as well as the overall workforce, in advancing diversity and inclusion Agency-wide: • Executive Advisory (Divershy and Inclusion) Council (EA C) This cross-divisional group of 12 senior leaders works to strengthen and integrate diversity and inclusion at CFPB by providing strategic guidance, advocacy, and support. • Diversity and Inclusion Council of Employees (DICE). In FY 2016, the Bureau launched the inaugural term for this cross-agency group of employees. DICE is a group of 17 employees from various demographics, pay band levels, positions, and geographic locations. DICE and the EAC both advocate for and provide critical perspectives. DICE is providing a platform for employees to give feedback to OCR and OMWI regarding EEO and diversity and inclusion efforts at CFPB, and will support affirmative employment and special emphasis programming efforts. (For instance, OCR received approval to leverage members of DICE to potentially serve as collateral duty special emphasis program managers.) • Employee Resource Group Policy In FY 2016, the Bureau finalized and adopted an official Employee Resource Group (ERG) policy to facilitate employee efforts to form 27 EEO PROGRAM STATUS REPORT FOR FY 2016 interest-based groups. ERGs at the Bureau will serve as advocates for equality and diversity and inclusion, and provide a means for employees to be active in supporting programs aligned with the Bureau's mission, such as the EEO Program. ERGs will foster employee engagement throughout CFPB by strengthening inclusion and understanding of cultural differences. ERGs also will contribute in ways that help the Bureau hire, retain, and develop its diverse workforce. Recently, the Bureau's first official ERGs — CFPB Pride (for LGBTQ+ employees and allies) and CFPB Adelante! (for Hispanic/Latino employees and allies) formed. Additional ERGs are being planned and will be created soon. • Union Outreach. OCR has engaged in outreach to the leadership of the NTEU chapter representing (as of the end of FY 2016) approximately 1,115 Bureau employees. OCR leadership met with the NTEU local board to understand how OCR could better educate bargaining unit members, and subsequently presented a one-hour training for bargaining unit members titled "Everything You Ever Wanted to Know About the Bureau's Office of Civil Rights and the 'EEO Process' (But May Have Been Afraid to Ask!)." Further, OCR, in collaboration with OHC, OMWI, External Affairs, and CFPB's Culture Team, has been successful in getting employees and managers involved in Heritage Month/Special Observances and other diversity-related events. For example, in FY 2016, various employees and managers helped plan and present the widely attended events listed in the table below. TABLE 8: HERITAGE MONTH AND DIVERSITY EVENTS Heritage Month and Diversity Events National Disability Employment Awareness Month: "My Disability Is One Part of Who I Am — A Conversation with Bureau Colleagues" moderated by OCR Director and featuring an OCR employee National Native American Heritage Month: Lunch and Learn featuring Ann Marie Bledsoe Downes, the Deputy Assistant Secretary, Indian Affairs for Policy and Economic Development, Department of the Interior Black History Month: Lunch and Learn featuring U.S. Representative Keith Ellison, Minnesota's 5111 Congressional District Public Service Recognition Week: Presentation from the 28 EEO PROGRAM STATUS REPORT FOR FY 2016 Date November 3, 2015 November 19, 2015 February 23, 2016 May 4, 2016 Hon. Andrew Young, former Ambassador to the United Nations, U.S. Congressman, and Mayor World Day for Cultural Diversity: A day to learn about and celebrate the cultures of CFPB employees The Life and Experiences of a Supreme Court Justice: A Conversation with Hon. Sonia Sotomayor LGBTQ+ Pride Month: Presentation on LGBTQ+ Workplace Rights featuring Louis Lopez, Associate Special Counsel, U.S. Office of Special Counsel, and two OCR employees/LGBTOt legal experts, and Observance Honoring the Victims of Orlando Hate Crime LGBTQ+ Pride Month: Screening of "Uniquely Nasty: A History of the U.S. Government's War on Gay Employees" featuring narrator and reporter Michael Isikoff May 19, 2016 June 7, 2016 June 22, 2016 June 29. 2016 Caribbean American Heritage Month: A cultural celebration to educate about the Caribbean region and its June 30, 2016 role in American History Distributing EEO information The Bureau uses various media and other innovative means to distribute EEO information. These efforts assist in ensuring that EEO is integrated into the Agency's strategic mission and crucial EEO-related information is readily accessible at all times. The Bureau makes use of virtually all of the ideas suggested by the EEOC in its September 2014 publication entitled "Preserving Access to the Legal System: A Practical Guide to Providing Employees with Adequate Information about Their Rights under Federal Equal Employment Opportunity (EEO) Laws and Regulations."7 The various means used to distribute information is described in the table below. 7 This guidance is available at Is ttp Ityv 29 eget gov/federal/preserving access crag EEO PROGRAM STATUS REPORT FOR FY 2016 TABLE 9: MEDIA USED TO DISTRIBUTE EEO INFORMATION Media Used To Distribute EEO Information Regular email notifications via "Ops Digest" and "Manager Minute" publications Regular email messages from the CFPB Director and OCR Director Annual statements from the CFPB Director on the No FEAR Mt and on the Bureau's EEO Policy and Anti-Harassment Policy, provided in email and printed formats, and posted on the Bureau's intranet Posters placed throughout all Agency facilities in break rooms and work rooms A tri-fold brochure on EEO rights and responsibilities Display Stands with relevant hard-copy information placed near every elevator bank, in ONC, and in OCR office space Digital Display Boards (i.e., large monitors) in elevator banks in CFPB headquarters featuring rotating slides including brief messages on EEO and diversity and inclusion-related topics Guide to the Office of Civil Rights (distributed immediately to all new employees) EEO Resource Manual for Managers and Supervisors (provided to all new supervisors and during mandatory 2-day EEO training) Intranet and Internet content, including all relevant policies and Frequently Asked Questions about OCR and discrimination-related topics, and periodic All-Employee "Announcements" on the homepage of the Bureau's intranet EEO-related notices on employee paystubs (containing a new notice each pay period) Formal training including: New Employee Orientation (NE0); mandatory annual No FEAR Act and harassment prevention trainings; mandatory Supervisory Development Seminar (SDS); and mandatory 2-day manager EEO training led by the EEOC Training Institute; mandatory two-day diversity and inclusion training for new supervisors; mandatory diversity and inclusion training for all employees In-person dissemination of information is perceived by many as the most effective means to distribute EEO information. To that end, a member of OCR staff distributes a hard copy "Guide to the Office of Civil Rights" to every new Bureau employee, in person, on or near his or her very first day of employment. This guide contains detailed information on discrimination, harassment, and retaliation, and the EEO process — including the Part 1614 process and the 45calendar day timeframe for initiating EEO counseling. In addition, OCR created and distributes an "EEO Resource Manual for Managers and Supervisors" providing practical guidance on EEO compliance. Further, OHC sends each new manager a "CFPB New Manager Onboarding Information" guide that also contains critical EEO and diversity and inclusion information. 30 EEO PROGRAM STATUS REPORT FOR FY 2016 OCR also conducts, collaborates in presenting, and/or sponsors numerous in-person trainings, as well. In his FY 2016 EEO Policy/Anti-Harassment Statement, Director Cordray conveyed his expectation that all Bureau employees prioritize diversity and inclusion and EEO training and put what they learn into practice every day. For example: • All 246 new hires at the Bureau (100%) completed mandatory New Employee Orientation Training during FY 2016, during which OCR staff provides an overview of EEO rights and responsibilities (including explaining the Part 1614 process and emphasizing the 45 calendar day timeframe for contacting an EEO counselor). A total of 234 employees completed mandatory diversity training in FY 2016. CFPB began offering this two-hour awareness raising workshop to non-managerial employees to help develop a shared understanding of diversity and inclusion at the Bureau. The workshop focuses on the importance of diversity and inclusion in strengthening individual competence for interacting effectively in a diverse workplace and the ways in which an understanding of diversity and inclusion contributes to the effectiveness of the Bureau's work in serving consumers. As of the end of FY 2016, 1,099 CFPB employees had completed this training, with the remainder scheduled to complete it by the end of calendar year 2016. Evaluations of the training indicated that it was well received and effective in increasing employees' awareness of the importance of diversity and inclusion to the Bureau's overall effectiveness. A total of 65 supervisors and managers completed a mandatory 2-day EEO Training conducted by the EEOC Training Institute in FY 2016, for a total of over 250 to date. • A total of 47 supervisors and managers completed mandatory Leadership Excellence Seminars (LES) in FY 2016, and over 200 total supervisors and managers have completed these seminars to date. • A total of 56 supervisors and managers completed the mandatory Supervisory Development Seminar (SDS) in FY 2016, and approximately 265 total supervisors and managers have completed this seminar to date — almost 95 percent. A total of 112 supervisors and managers completed the mandatory supervisor 2-day diversity training in FY 2016, and approximately 230 total supervisors and managers have completed this training to date — approximately 83 percent. 31 EEO PROGRAM STATUS REPORT FOR FY 2016 • A total of 44 employees completed structured interview training mandatory for all "lead interviews" in FY 2016, and approximately 294 total employees have completed this training to date. • A total of 1132 employees (69 percent) and 236 supervisors and managers (82 percent) completed mandatory performance management training containing EEO and diversity and inclusion components in FY 2016. In addition, each year all Bureau employees must take a one-hour web-based training on the No FEAR Act, and a separate one-hour, web-based training on harassment prevention. Approximately 85 percent of employees completed this mandatory No FEAR Act training in FY 2016, and over 95 percent of employees completed the mandatory harassment prevention training in FY 2016. By FY 2018, OCR hopes, depending on resource availability, to begin offering live annual mandatory No FEAR Act and harassment and retaliation training for employees, and to develop and rollout an EEO "refresher training curriculum for experienced supervisors and managers. In FY 2016, OCR also launched a new "Top 10 EEO Tips" series of optional webinars for all Bureau employees. This series of virtual brownbag presentations by OCR is designed for all CFPB personnel (managers/supervisors and non-supervisory employees), and provides "bite size" —30 minutes maximum — training in the form of practical tips on EEO rights and responsibilities. The first installment of the series was for Mental Health Awareness Month in May 2016, and offered tips on "Mental Health Awareness and You." OCR will continue to offer new webinars as part of this series in FY 2017, with upcoming installments likely addressing topics such as Top 10 EEO Pitfalls, reasonable accommodations (including for pregnancyrelated limitations and religion), and retaliation. In FY 2017, OCR also hopes to develop and launch web-based training on compliance with Sections 504 and 508 of the Rehabilitation Act of 1973. Further, the OCR intranet page is an excellent resource for individuals wanting information about the EEO process. The OCR Intranet page clearly describes the Part 1614 process, contains links to all pertinent policies and procedures, and offers a section of plain-language Frequently Asked Questions (FAQs) that is updated and augmented routinely. (This section of the intranet also welcomes and solicits ideas for additional FAQs, encouraging those visiting the site to email OCR with suggestions for topics about which additional guidance or clarification could be helpful.) The OCR Intranet page also contains contact and location information for OCR, 32 EEO PROGRAM STATUS REPORT FOR FY 2016 including contact information for all OCR staff, to ensure that employees can easily seek OCR's assistance in person or virtually. 5.3 Essential Element 3: Management and program accountability Management Directive 715 explains that a model Title VII and Rehabilitation Act program will hold managers, supervisors, EEO officials, and personnel officers accountable for the effective implementation and management of an agency's program. Per MD-715, in ensuring such accountability, the Bureau must: • Conduct regular internal audits, on at least an annual basis, to assess the effectiveness and efficiency of the Title VII and Rehabilitation Act programs and to ascertain whether the Agency has made a good faith effort to identify and remove barriers to equality of opportunity in the workplace. Establish procedures to prevent all forms of discrimination, including harassment, retaliation, and failure to provide reasonable accommodation to qualified individuals with disabilities. • Evaluate managers and supervisors on efforts to ensure equality of opportunity for all employees. Maintain clearly defined, well-communicated, consistently applied, and fairly implemented personnel policies, selection and promotion procedures, evaluation procedures, rules of conduct, and training systems. Implement effective reasonable accommodation procedures that comply with applicable executive orders, EEOC guidance, the Architectural and Transportation Barriers Compliance Board's Uniform Federal Accessibility Standards and Electronic, and Information Technology Accessibility Standards (and ensure that EEOC has reviewed those procedures when initially developed and if procedures are later significantly modified). Be mindful of the Agency's disability program obligations, including the provision of reasonable accommodations, when negotiating collective bargaining agreements with 33 EEO PROGRAM STATUS REPORT FOR FY 2016 recognized labor organization(s) representing Agency employees. Ensure effective coordination between the Agency's EEO programs and related human resource programs, including the Federal Equal Opportunity Recruitment Program (FEORP), the Selective Placement Programs, and the Disabled Veterans Affirmative Action Program (DVAAP). • Review each finding of discrimination to determine the appropriateness of taking disciplinary action against Agency officials involved in the matter. Track these decisions and report trends, issues, and problems to Agency leadership for appropriate action. • Ensure compliance with settlement agreements and orders issued by the Agency. EEOC, and EEO-related cases from the Merit Systems Protection Board, labor arbitrators, and the Federal Labor Relations Authority.8 Audits and Reviews of CFPB programs The Bureau uses internal audits and assessments (among other methods) to ensure management and program accountability. In FY 2016, CFPB conducted or was involved in various audits and reviews of its EEO program to ascertain whether the Bureau has made a good faith effort to identify and remove barriers to equal opportunities in the workplace and promote diversity and inclusion Agency-wide. Most notably, as part of the EEOC's oversight responsibility for federal agency EEO programs and per the EEOC's Federal Sector Complement Plan (FCP), the EEOC's OFO conducts technical assistance visits to various federal agencies each year. For FY 2016, EEOC selected 74 agencies, including CFPB, for technical assistance visits. On January 11, 2016, OFO staff met with personnel from OCR, OHC, and OMWI to review the status of CFPB's EEO program with respect to its: (1) Schedule A conversions; (2) anti-harassment program; (3) reasonable accommodation program; (4) barrier analysis focused on access to executive level positions; and 8 See MD-715, Model Agency Title VII and Rehabilitation Act Programs, at Section TIC., available at htips:/Avvpiv.peoc.pyfic‘dc‘ra I /LI ir ectives/indr 5.cfrn. 34 EEO PROGRAM STATUS REPORT FOR FY 2016 (5) compliance with EEOC's Management Directives. In a letter to the OCR Director dated June 24, 2016, the EEOC stated (among other things): "We are pleased to note that CFPB stated in its response to our RFI that the agency regularly converts its Schedule A appointees to competitive status after two years of satisfactory performance. We urge CFPB to continue to ensure that its Schedule A employees are timely converted to the competitive service." "We are pleased to note that in FY 2015, CFPB implemented a recruitment and outreach plan for individuals with targeted disability and it has established a goal of 2% to hire and retain individuals with [a] targeted disability. Although CFPB did not specifically set aside positions for Schedule A appointments in FY 2015, the Office of Human Capital, Office of Civil Rights (OCR), and Office of Minority and Women Inclusion (OMWI) urge hiring officials to consider the use of the Schedule A hiring authority to fill vacancies. Further, the agency explained that its recruitment officials are trained on all federal hiring rules, including special hiring authorities such as Schedule A. We would also like to highlight that CFPB's Director announced its plans to partner with another federal agency to increase its hiring of individuals with intellectual disabilities. We look forward to reviewing CFPB's progress in this area in its next MD-715 report." "Further, we commend CFPB for providing 'Disability and Reasonable Accommodation Training' to managers and supervisors and disability etiquette tips to all employees. In addition, we are pleased to note that CFPB has established a tracking system to ensure that the agency responds to accommodation requests in a timely manner. We urge the agency to continue its strong support of the reasonable accommodation program." "We thank CFPB for submitting its anti-harassment policy, entitled CEPS Procedures Related to Reporting Harassment and Inappropriate Conduct After reviewing the policy, we determined that the document cover[s] all types of harassment and addresses all six elements [essential for an effective anti-harassment program and procedures]. However, the policy does not specifically require periodic training to all managers and supervisors. We expect CFPB to establish a plan to update its policy statement to reflect the periodic training on harassment that is currently provided to all supervisor[s] and managers." "[T]he Office of Human Capital, which is responsible for the anti-harassment program at the CFPB, completes management inquiries in an average of 2 to 4 months, depending 35 EEO PROGRAM STATUS REPORT FOR FY 2016 on the circumstances. With regard to prompt investigations, CFPB should be aware that management inquiries must commence within ten (10) days of receiving notice of harassment of allegation. See Complainant v Dept of Veterans Affairs, EEOC Appeal No. 0120123232 (May 21, 2015). We note that at the time of our meeting in January 2016, CFPB did not yet track the number of days that have elapsed between receiving a complaint and commencing the investigation; however, the agency now monitors the timeliness of its management inquiries. We applaud CFPB for implementing a centralized tracking system to monitor the status of its management inquiries, and look forward to reviewing the agency's continued progress on this front in the Executive Summary of its next MD-715 report." "We note that with the exception of Men overall, Hispanic males, and Asian males, all other EEO groups had lower-than-expected participation rates in CFPB's senior level positions (SLP) in FY 2015, when compared to their rate in [A]gency's permanent workforce. In Part I of its FY 2015 MD-715 report, CFPB identified triggers involving Black males and females, but has not yet found a policy, procedure, or practice that is causing a barrier. The agency stated that its preliminary analysis did not reveal any discriminatory policies, practices, or procedures that have created a barrier. CFPB established plans in Part Ito continue to examine the promotion practices and address any problematic practices, and review surveys to assess whether any information contained in results could help explain the cause of low participation among certain groups in higher banded positions." • "We commend CFPB for its barrier analysis efforts and hope this letter will assist the agency in identifying whether a barrier exists in its SLPs.... [W]e suggest that CFPB focus on [possible] barriers for Black males and females. Ultimately, CFPB should look for possible connections between the triggers in its workforce statistics and any policies, procedures, or practices that might be causing those discrepancies. In particular, we suggest that CFPB implement the following planned activities: (1) identify the typical background and experience of individuals selected to the SLP and other senior pay positions; (2) review the qualifications of Black males and females seeking career advancement; (3) examine the recruitment of Black males and females into the senior grade levels and management positions; (4) investigate every phase of the merit promotion process for the senior grade positions; (5) interview employees from the human resources office about their screening process; (6) meet with members of the interview panel about their process of identifying best-qualified applicants and their 36 EEO PROGRAM STATUS REPORT FOR FY 2016 interview questions; (7) compare the qualifications of Black male and female applicants to the selectees' qualifications; (8) review the various voting stages for disapproval of Black males and female candidates; (9) conduct a longitudinal review of applicant flow statistics found in tables A7, A9, and All; (10) review the participation of Black males and females by grade level in the occupations with upward mobility; and (11) meet with selecting officials to examine their experiences in the hiring process and to discuss their perception of Black candidates. We look forward to reviewing CFPB's continued progress on this front in Part I of its next MD-715 report. In addition, we request that CFPB provide an update on its use of a blind selection process for SLS vacancies, which EEOC considers a best practice." "CFPB does not yet collect all of the workforce data, including all applicant flow data, which is necessary in order to conduct barrier analysis. In Part H of its next MD-715 report, we expect CFPB to show meaningful progress toward capturing all the required workforce data. We look forward to reviewing CFPB's progress in this area in future MD715 reports." Notably, the EEOC did not infer or conclude that CFPB had engaged in any unlawful employment practice, and did not identify any specific barrier to equal employment opportunity for any demographic group. As feasible given competing demands and limited resources, the Bureau is focusing on incorporating all of the best practices identified as part of the EEOC's technical assistance. OCR is currently working with various stakeholders, including OHC, OMWI and the Executive Advisory Committee (EAC), to ensure EEOC's suggestions are incorporated into the Bureau's EEO program. For instance, OCR has consulted with OHC on a process to update its antiharassment policy to reflect that periodic training is required for all managers and supervisors. OHC is also working diligently to reduce the average number of days to complete antiharassment inquiries in line with EEOC guidance and case law.9 With respect to disability 9 The length of the inquiries varies widely depending on the number of allegations made, the complexity of the allegations, the nurnber of witnesses interviewed, and whether or not an outside investigator was procured to 37 EEO PROGRAM STATUS REPORT FOR FY 2016 recruitment and hiring, the Bureau in FY 2016 drafted (and in FY 2017 will finalize) an official Schedule A policy to encourage continued and greater use of this hiring flexibility. (In FY 2017, OHC will also work on finalizing a set of Standard Operating Procedures to assist applicant seeking reasonable accommodations.) Further, the Bureau's Chief Human Capital Officer has reached out to the Federal Communications Commission to leverage lessons learned and explore partnerships to increase the employment of individuals with intellectual disabilities. The Bureau's efforts to implement the EFOC's recommendations regarding lower-than-expected participation rates in CFPB's senior level positions of certain demographic groups are addressed in greater detail in Part 1-4 of this report. During FY 2016, other external reviews or assessments shed light on the Bureau's EEO and diversity and inclusion efforts. An annual comparison by the nonprofit Partnership for Public Service found that in 2016, CFPB ranked 4th out of 26 peer agencies for support for diversity (a category measuring the extent to which employees believe that actions and policies of leadership and management promote and respect diversity). Overall, CFPB placed 8 out of 27 mid-size agencies in the Partnership for Public Service's ranking of Best Places to Work. In addition during 2016, the Professional Diversity Network selected CFPB for its "Diversity Excellence Award" and named the Bureau one of PDN's "TOP 10 Leading Employers in Diversity" from among 2200 employers across the nation. The criteria PDN used to make this award include: • Percentage of resources and outreach budget assigned specifically to diversity; • Number of job openings actively promoted to a diverse audience; Senior leadership statements, policies, and objectives specific to diversity recruitment; • Quality of content in diversity recruitment outreach; • A culture of inclusion within HR and throughout the organization as a whole; and conduct the investigation. In the majority of cases, inquiries took between 2-4 months. A true "average" number would be inaccurate due to outlying cases that took significantly longer due to the particular circumstances, but in FY 2316! the shortest anti-harassment inquiry was corn pleted in 14 days. 38 EEO PROGRAM STATUS REPORT FOR FY 2016 • A systematic, comprehensive and defined diversity recruitment strategy. The Bureau also was featured as a "Company to Watch" in Universum's Top 100 Employers publication. Universum is a global branding and consulting firm which annually surveys over 75,000 college students at over 300 institutions about the companies they admire most and would most want to work for. CFPB's feature includes a profile of Monica Romero, an Examiner from the Bureau's Western region. Further, in January 2016, Careers & the MSABLED, a magazine targeted to the recruitment of persons with disabilities, named CFPB the 13th Best Federal Agency Employer for persons with disabilities. In FY 2015, the Office of the Inspector General (OIG) of the Board of Governors of the Federal Reserve released its results of its audit to assess the efficiency and effectiveness of the Bureau's EEO diversity and inclusion efforts and its EEO complaint processing program. The report, CEPS Can Enhance Its Diversity anc/ Inclusion Efforts, issued on March 9,2015, states that regarding the 29 C.F.R. Part 1614 complaint process: • "CFPB has policies and procedures for each of its employee complaint processes [e.g., EEO complaints]." These "processes give employees the opportunity to have their complaints heard, investigated, and redressed in a fair and equitable manner." "CFPB adheres to several laws and regulations related to its OHO [Office of Equal Employment Opportunity — OCR] and the processing of EEO complaints."10 During FY 2016, CFPB made substantial progress on or completed OIG recommendations including, for example, obtaining commercial software to support EEO complaint tracking and reporting requirements, mandating diversity training, creating a D&I Strategic Plan, and creating a Succession Planning and Career Pathing Guide. On September 30, 2016, the OIG 10 This report is available at It ttps //og fed era Ireserve govh oports/cfpb-divc‘rsity-inclusiori-mar 2015 Lm. 39 EEO PROGRAM STATUS REPORT FOR FY 2016 wrote to the Bureau closing out an additional recommendation and confirming that only six,' of the original 17 recommendations remain open. In November 2015, the minority staff of the U.S. House of Representatives Committee on Financial Services issued a report titled The Dodd-Frank Act Five Years Later: Diversity in the Financial Services Agencies: 2 This report reviewed audits of seven financial regulatory agencies including the OIG audit of CFPB discussed above. The various OIGs for financial regulatory agencies had been asked to review the agencies' internal operations to determine whether any personnel practices have created a discriminatory workplace or have otherwise systematically disadvantaged minorities and women employees, particularly from obtaining senior management level positions. The report highlighted the number of changes CFPB has instituted to its workforce practices designed to remedy perceived past shortcomings and proactively prevent discrimination. The report commended CFPB for evaluating its Performance Management Review (PMR) program, and determined that CFPB's willingness to hold itself accountable for achieving a non-discriminatory work environment was an "agency best practice." On June 21, 2016, the Government Accountability Office (GAO) released a report describing the CFPB's ongoing work to foster a diverse and inclusive workforce and positive organizational culture),The report examined a wide variety of diversity and inclusion efforts underway at CFPB, noted progress that the Bureau has made, and identified recommendations on how to further enhance initiatives to promote the Agency's broad diversity and inclusion goals. After its two-year review, GAO reached a number of important conclusions. First, GAO expressly recognized that CFPB has engaged in ongoing improvement efforts in response to challenges 11 To date, only three recommendations related to OEOF remain open and the Bureau has met with the TG to discuss officially closing them out. 12 This report is available at hLip //dertioci financialsen/Ices house gov/nesos/docursiso is aspx2 Docurnso LID —399441. 13 See Consumer Financonl Protection Bureau: Additional Actions Needed to Support a Fair and Inclusive Workplace (pubj une 23, 2016), available at hitpl/vAnny.gao.viv/products/GAOT 6-62. 40 EEO PROGRAM STATUS REPORT FOR FY 2016 that the Agency first identified in late 2013 and early 2014, including working "to strengthen personnel management practices and enhance its diversity and inclusion efforts." GAO also specifically noted that CFPB has expanded management training, developed new guidance on personnel practices, developed a new performance management system, and "made progress in adopting leading diversity management practices identified in prior GAO work, such as finalizing a diversity strategic plan, creating employee diversity groups, and expanding diversity training." GAO further noted that the CFPB "launched a new initiative to strengthen its organizational culture that includes obtaining employee input on ideas for improving CFPB's culture and addressing employee concerns. Finally, CFPB has strengthened its employee complaint processes by providing new training and guidance and creating feedback mechanisms to help evaluate progress in some areas." All of this, GAO found, showed that "CFPB's diversity, inclusion, fairness, and culture efforts represent a significant change management initiative." The GAO report made only two limited recommendations, none of which was specific to OCR operations: • CFPB should more "comprehensively report on its implementation goals and progress across these efforts." CFPB has developed feedback mechanisms to evaluate the effectiveness of its EEO complaint process, and should expand those same mechanisms for its non-Part 1614 employee grievance processes (i.e., the negotiated grievance process for bargaining unit members and the administrative grievance process administered by OHC for nonbargaining unit members). Bureau leadership immediately began working to implement both of GAO's recommendations. With respect to the first recommendation, OEOF, OHC, and the Office of Strategy, along with other Bureau stakeholders, have implemented a detailed D&I project tracking initiative. Regarding the second recommendation, OCR shared its current comprehensive program surveys with OHC as potential models for grievance-process feedback. The Bureau has also worked with NTEU to develop a means of collecting feedback on the current negotiated grievance process. Diversity and inclusion form an especially critical component of an effective organizational culture. GAO's perspective provides valuable insight and points to opportunities for continuous improvement. GAO's report recognizes that CFPB has taken many steps considered best 41 EEO PROGRAM STATUS REPORT FOR FY 2016 practices, citing "new policies, guidance, and training; efforts to enhance communication about personnel practices; several enhancements to diversity and inclusion efforts; and the new Workforce of the Future initiative to strengthen the organizational culture, among others." CFPB also carefully monitors and incorporates employee feedback on its EEO program and overall diversity and inclusion efforts. For instance, during FY 2016 OCR drafted a new survey specifically soliciting feedback from relevant stakeholders about all stages of the EEO process, including the counseling and investigation stages, in addition to the use of ADR, and improved the design of the survey instrument to include a five-level rating scale instead of yes/no questions. The OCR survey includes questions about (1) whether the parties involved in alternative dispute resolution acted in good faith; (2) confidence that confidentiality was maintained during the informal process; (3) fairness of the counseling and investigative processes; and (4) the fairness and impartiality of EEO counselors and investigators (among many other items). The Bureau conducted its most recent comprehensive employee viewpoint survey — what CFPB calls the Annual Employee Survey (AES) — in August 2016. AES measures employee engagement and satisfaction throughout the Bureau, and provides crucial insight on employee perceptions about fairness and equality at CFPB. In FY 2016, the Bureau's survey response rate was 87.6 percent — an increase over the response rate from FY 2015. In FY 2016, CFPB again used portions of the AES results to calculate what the Office of Personnel Management (OPM) has defined as the "Inclusion Quotient." The Inclusion Quotient measures workplace practices or habits related to inclusiveness, which research confirms contributes to employee engagement and organizational performance. This "IQ" metric is separated into several factors or indices: Fair, Open, Cooperative, Supportive, and Empowering. Goals and progress in this IQ measure are reported annually in CFPB's Strategic Plan, Budget and Performance Plan and Report. In FY 2016, the Bureau's Inclusion Quotient was 67.5 percent — an improvement upon the IQ of 65.8 percent from FY 2015, and significantly higher than the FY 2016 government-wide IQ of 58 percent. On the metric of Open, specifically — questions dealing with whether diversity and inclusion are promoted by the Agency and/or managers — CFPB's favorability score of 69.7 percent is higher than the government-wide score of 57 percent. Bureau respondents to the FY 2016 AES across demographic groups indicated deep trust in their immediate supervisors, with 90.8 percent responding that their supervisor treats them with 42 EEO PROGRAM STATUS REPORT FOR FY 2016 respect and 87.8 percent indicating that their supervisor supports the need to balance work and other life issues. Overall, FY 2016 AES results revealed 50 "Strengths,' 14 three "Challengesrs seven "Issues to Watch,"I6 six "Improvements," and 0 "Declines." Many survey items displayed no significant demographic differences, and 42 of the items represented strengths for every demographic group. Shared strengths are concentrated around the topics involving my work experience, my work unit, my supervisor, management, and overall satisfaction. These include feeling that my work is important, people in my work unit share knowledge and help each other, my supervisor treats me with respect, and Jam satisfied with my job overall. At the same time, there are some areas of difference in responses between demographic groups that present opportunities for further enhancements, and which will be monitored by OEOF, OHC, and the Bureau's Office of Strategy. Bureau partners in OEOF, OHC, and the Office of Strategy are continuing to analyze these results to determine if there are any triggers creating barriers for equal opportunities.17 Additionally, since July 2011, CFPB has taken quarterly surveys of new employees. These surveys provide an innovative approach to engage in ongoing barrier analysis. The surveys are given to employees every quarter during the first year of their employment (four times in the first year), and ask questions about the employees' satisfaction with various areas of employment, including the recruitment experience, the application and hiring process, new employee orientation and training, supervision, and engagement. The surveys are then analyzed 14 Items that are 65 percent or more positive (percent favorable) are strengths. Percent favorable (positive ratings) is the sum of two categories (e.g., Strongly Agree/Agree or Very Satisfied/Satisfied). 15 Items that are 35 percent or more negative (percent unfavorable) are areas of challenge. Percent unfavorable is the sum of two categories (e.g., Strongly Disagree/Disagree or Very Dissatisfied/Dissatisfied), 16 Items that are 25 percent or more negative (percent unfavora ble) are issues to watch. Percent unfavorable is the sum of two categories (e.g., Strongly Disagree/Disagree or Very Dissatisfied/Dissatisfied), 17 For more information on CEP B's FY 2 016 APS survey results, see http //vIvp.,? comsumerfmanc, yovidataresearchhesearch oports/2016-cfpb-annuaRmplorc-survc‘y-r,sults. 43 EEO PROGRAM STATUS REPORT FOR FY 2016 by data experts who brief OCR, OMWI, and OHC on a quarterly basis on the results. These results are analyzed to assess the experiences of different demographic groups of employees. At the end of the year, these results are presented in the aggregate, and allow the Bureau to monitor for any potential triggers. Similarly, exit surveys are provided to each individual who leaves the Agency for any reason, to help identify any trends and triggers related to reasons for departure. OPM provides the survey results to CFPB, and the aggregate data is compared by race, ethnicity, and gender to again facilitate the Bureau's understanding of whether (and how) the experience of different demographic groups of employees is similar or different. The aggregate data is analyzed on a quarterly and annual basis, and is compared to results from previous fiscal years, to determine whether triggers exist and further analysis is necessary to identify any potential barriers to equal employment opportunities. If any of the individual, anonymized responses indicate potential discrimination, the OCR Director is notified. As a follow-up to survey results, various audits, and the EEOC's technical assistance visit, and in line with MD-715 guidance, in FY 2015 and continuing during FY 2016, the Bureau began conducting an analysis of historical applicant data to determine whether there were any triggers that could be creating barriers for demographic groups in the Bureau's hiring process. The preliminary data review indicated that CFPB was consistent with government-wide trends and there may be opportunities for improvement. OCR, OMWI, and OHC are currently working together to better understand and appropriately address the data results, and will apprise EEOC of progress. This progress is addressed in greater detail in Part I-1 of this report. Evaluating Managers and Supervisors The Bureau has taken measures to ensure that managers and supervisors are evaluated on their efforts to ensure equal opportunity for all employees. These measures are included in managers' and supervisors' performance plans. Specifically, executives' performance plans evaluate their ability to "leverage diversity," and whether they foster and develop an inclusive workplace where a diverse set of talents and perspectives are valued in accomplishing the vision and mission of the Bureau. Additionally, all non-executive supervisors are evaluated on whether they are able to grow and retain a diverse staff, support diversity and inclusion initiatives, and cooperate with EEO inquiries. The Bureau has also added a D&I competency, along with a list identifying specific behavioral indicators to evaluate, to its Leadership Competency model, and to the Non- 44 EEO PROGRAM STATUS REPORT FOR FY 2016 Supervisory Employee Competency Model that addresses the importance of D&I competency for all. The Bureau's Associate Directors — top-level Division leaders — are also held directly accountable for fostering diversity and inclusion within their Divisions. During FY 2016, Associate Directors met with Director Cordray four times and reported on D&I progress, as part of the Quarterly Performance Review (QPR) process. These regular reviews ensure awareness at the highest leadership levels, support prompt and immediate action when issues arise, and incentivize Associate Directors to hold their management teams accountable for successful implementation of diversity, inclusion, and EEO principles and goals. In addition, the Bureau's robust Part 1614 complaints process, which is administered by OCR, safeguards employee civil rights and provides appropriate relief for statutory violations. OCR issued a Final Agency Decision in FY 2016 finding violations of both the Rehabilitation Act and Title VII of the Civil Rights Act with respect to one individual. This was the first finding of discrimination against the Bureau to date; no other findings have been issued against the Bureau (e.g., from the Bureau itself, the EEOC, the Merit Systems Protection Board, the Office of Special Counsel, labor arbitrators, the Federal Labor Relations Authority, the Department of Labor, or a federal court). In its Final Agency Decision, OCR ordered appropriate remedies, including consideration of disciplinary action against the responsible Agency officials, appropriate training, a posting notice, and other make-whole relief for the individual victim. This finding and accompanying relief order underscore the Bureau's ability to ensure effective compliance with applicable EEO laws. In addition, the Bureau also holds managers and supervisors accountable for compliance with the terms of settlement agreements, and OHC similarly holds managers and supervisors responsible under the Bureau's Anti-Harassment Policy. For example, in FY 2016, three employees were counseled or disciplined related to a potential or actual violation of federal antidiscrimination and retaliation laws, including whistleblower protections. Finally, in all trainings related to any EEO topics, managers and supervisors are reminded that equal employment opportunity — including, critically, freedom from retaliation — is essential to attracting, developing, and retaining the most qualified workforce, and that a diverse workforce and a fair workplace are essential to ensuring that the Bureau achieves its mission. This emphasizes to managers that they are responsible for the success of the FE0 Program, and relatedly, to the success of the employees they supervise. 45 EEO PROGRAM STATUS REPORT FOR FY 2016 5.4 Essential Element 4: Proactive prevention According to Management Directive 715: Agencies have an ongoing obligation to prevent discrimination on the bases of race, color, national origin, religion, sex, age, reprisal and disability, and eliminate barriers that impede free and open competition in the workplace. As part of this ongoing obligation, agencies must conduct a self-assessment on at least an annual basis to monitor progress, identify areas where barriers may operate to exclude certain groups and develop strategic plans to eliminate identified barriers.I8 Self-assessments As discussed above, CFPB has conducted or participated in various self-assessments, audits, and reviews that began or continued during FY 2016. Proactively, and in response to specific recommendations made by outside stakeholders, the Bureau has invested substantial resources in building a workplace that fosters collaboration, leverages diverse viewpoints, and offers development and advancement opportunities to all employees. Creating a positive organizational culture at a new agency is a complex task. The Bureau has been deeply committed to getting this critical task right and has taken key steps to create such a culture in the first years of its existence. To date, these efforts have included: Providing interactive diversity and inclusion awareness training to employees. Requiring managers to attend external management trainings while developing an internal training curriculum that the Bureau launched in 2014. 18 See MD-715, Model Agency Title VII and Rehabilitation Act Programs, at Section II.D., available at liaps://vvvolviecc.8ovfiederal/direcLives/mLITS.cfrn. 46 EEO PROGRAM STATUS REPORT FOR FY 2016 • Initiating a 2.5-year Bureau-wide research effort to develop robust competency models describing the skills and expertise expected for all Bureau positions. Building a recruitment outreach function focused on identifying diverse talent pools, including recruitment through professional organizations and online communities focused on diversity. • Developing data-driven pay-setting processes that use objective measures without regard to race, gender, ethnicity, sexual orientation, and other protected categories in determining salary offers. • Introducing structured interview training to guard against bias in the interview process and improve the quality of personnel selections. • Using the Inclusion Quotient developed by OPM to monitor AES responses related to the Bureau's inclusiveness. Over the past two years in particular, the Bureau has continued to build its organizational culture and enhance its personnel management through development of new initiatives. Additional steps taken during this time period included: • Creating the Office of Equal Opportunity & Fairness, thus elevating OMWI and OCR to the Office of the Director. Through OMWI, conducting 48 listening sessions with more than 300 employees to better understand on-the-ground employee experiences and developing and implementing recommendations based on that feedback. Creating the Executive Advisory Council (EAC), a cross-divisional advisory group that integrates diversity and inclusion into the Bureau's operations through strategic guidance to the Bureau's Director and senior leaders. • Establishing the Diversity and Inclusion Council of Employees (DICE), a staff-level analogue to the EAC that provides critical input on staff experience in regular meetings with Bureau leadership. • Working with NTEU to establish a joint Career Pathing Working Group to develop career planning strategies and provide recommendations on opportunities for employee advancement. 47 EEO PROGRAM STATUS REPORT FOR FY 2016 • Launching a detail opportunities page on the Bureau's intranet to increase transparency and encourage more employees to apply for these valuable opportunities. Creating a dedicated team within the Operations Division to improve communications to staff regarding Bureau events, policies, procedures, and other issues involving Bureau culture and work life. Validating and launching a new Leadership Competency Model that defines expectations and requirements for leaders at all levels of the organization, as well as a new competency model for non-supervisory staff — all of which emphasize diversity and inclusion principles. Through the OCR, commencing a 2-day mandatory manager and supervisor training workshop led by the EEOC Training Institute and developing an Alternative Dispute Resolution training module, among other training and learning opportunities made available by OCR. • Mandating employee participation in a Diversity and Inclusion Awareness Workshop, which over 80% of all employees have already completed. • Mandating a 2-day training workshop for managers on effective managing diversity and inclusion, which over 80% of managers have now completed. Developing a comprehensive policy for the establishment of employee-led Employee Resource Groups (ERGs). Launching a pilot of a Mentoring Bank program that had a very positive response. (As a result, discussions are underway to expand it.) Offering "Crucial Conversations," a team-based communications course, Bureau-wide. Overall, the Bureau has made steady progress in building an infrastructure that supports a vibrant organizational culture. The Bureau recognizes that diversity and inclusion form an especially critical component of its organizational culture, and that, as stated in our Business Case for Diversity and Inclusion, "a diverse and inclusive workforce is essential to building an agency that can do its very best work." The Bureau has taken many steps considered best practices to build and maintain such a workplace, including those highlighted above. It has also taken steps to weave diversity and inclusion efforts into the fabric of work life at the Bureau and to preserve their importance by requiring each division of the Bureau to adopt diversity and 48 EEO PROGRAM STATUS REPORT FOR FY 2016 inclusion goals and objectives, which are reviewed and discussed at regular Division-level Performance Review meetings that include both the Bureau's Director and the OMWI Director. The Bureau has embedded diversity and inclusion principles and goals into its Agency-wide strategic plan, as well, and published a Diversity and Inclusion Strategic plan aligned to OPM's Government-Wide Diversity and Inclusion Strategic Plan. The commitment demonstrated by these many efforts comes from the very top of the organization. Senior Bureau leaders have made a sustained, substantial, and visible commitment to fostering a positive organizational culture and to integrating fairness, diversity, and inclusion into agency actions and decisions. This commitment, evidenced by initiatives outlined above, is the motivation behind the Bureau's "Workforce of the Future" program. Workforce of the Future brings together leaders from the Office of the Director, OHC, OMWI, OCR, and other Bureau divisions and offices in a focused effort to sustain a culture where everyone is empowered to do their best work. For example, as discussed above, Workforce of the Future developed norms, including a norm about valuing diversity and inclusion, to guide interactions between individual employees and between units within the Agency, and these norms are displayed throughout Bureau meeting spaces. Workforce of the Future has called on leaders at all levels — from the Bureau Director to first-line supervisors — to model these norms and to hold themselves and their colleagues accountable for upholding them. Furthermore, Workforce of the Future will hold periodic employee outreach sessions so that employees can provide feedback on the program's progress and make recommendations for improvement. The intention is that, through regular solicitation of employee feedback, the Bureau's culture will consistently represent the voices of its diverse pool of employees. The Bureau's EEO Program Status Report for FY2017 will provide information about continued progress on these and other relevant Bureau initiatives. Policies and procedures To help proactively prevent discrimination, the Bureau has promulgated and enforces clear and concise EEO and anti-discrimination policies and procedures. These policies detail employee rights and responsibilities under EEO laws. Managers and supervisors share the responsibility for successful implementation of these policies, and as a result, the EEO Program. The OCR Director, along with OHC, regularly reviews these policies and procedures to ensure they are upto-date, legally sufficient, well communicated, applied consistently, and implemented fairly. 49 EEO PROGRAM STATUS REPORT FOR FY 2016 For instance, the Bureau has in place an Equal Employment Opportunity (EEO) and NonDiscrimination Policy which is easily accessible on the Bureau's intranet and is physically given to all new employees during New Employee Orientation (NEO) training (as part of an overall "Guide to the Office of Civil Rights"), and during employee and supervisor refresher trainings. This policy clearly explains the EEO process, including how to begin the process, pertinent regulatory timeframes, and the roles and responsibilities of various offices. This policy also makes clear that discrimination, harassment, and retaliation will not be tolerated at the Bureau. In FY 2016, the Bureau also adopted a new Non-Discrimination and Inclusion Po/icy for Transgender Applicants and Employees affirming the Bureau's commitment to protect the rights of transgender and gender-non-conforming employees. The policy emphasizes the importance of creating and maintaining a welcoming environment for transgender employees and explains how the Bureau will support gender transitions in the workplace. The Bureau also has in place Procedures Related to Harassment and Inappropriate Conduct, which sets forth the Bureau's anti-harassment program pursuant to the Faragher-Ellerth line of Supreme Court cases and the EEOC's "Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors."I9 These Bureau procedures clearly define harassment and inappropriate conduct, and make clear that harassment and/or inappropriate conduct will not be tolerated at CFPB. To ensure as inclusive a workplace as possible, this policy is purposefully broad and states, "Even inappropriate conduct that is not of sufficient severity to constitute harassment as a matter of law is considered misconduct." This policy identifies a Bureau point-of-contact that should be used if an employee is subjected to or witnesses harassment. This policy provides multiple avenues of redress for claims of harassment, and does not limit employees to the EEO process. It also makes clear that retaliation is not tolerated. As already discussed above, the EEOC, in its _June 24, 2016, technical assistance letter, determined that this policy covers all types of harassment and addresses all six elements the EEOC has deemed essential for an effective anti-harassment program and procedures. The Bureau also has in place a Reasonable Accommodation Policy- approved by the EEOC — to 19 This guidance is available at http://wegTegoc.gov/policy/doss/harassrneuhhunl 50 EEO PROGRAM STATUS REPORT FOR FY 2016 ensure that applicants and employees know of their right under the Rehabilitation Act to receive a reasonable accommodation for disability-related limitations if needed to apply for a Bureau job, perform the essential functions of a job, or enjoy equal benefits and privileges of employment at the Bureau. This policy also explains management's responsibilities when a supervisor or manager is put on notice that an employee requires a reasonable accommodation. Accompanying Standard Operating Procedures Related to Reasonable Accommodation Requests lay out the interactive process used when an employee requests a reasonable accommodation for a disability. OHC reviews disability accommodation decisions and actions to ensure that discrimination is not occurring, to confirm compliance with its written procedures, and to analyze the information tracked for trends and problems. CFPB recently revised this reasonable accommodation policy and accompanying standard operating procedures in light of lessons learned from the Agency's first Final Agency Decision finding discrimination (issued during FY 2016). The Bureau has sent its revisions to the EEOC for comment, consistent with Executive Order 13164. In FY 2017, CFPB anticipates making additional minor revisions to these procedures to comply with the EEOC's new Section 501 affirmative action regulations requiring the provision of Personal Assistance Services to individuals with targeted disabilities. OHC has designated two people to carry out the responsibilities of the Bureau's Reasonable Accommodation program — a Reasonable Accommodation Coordinator (RAC) and a Reasonable Accommodation Deciding Official (DO). The Reasonable Accommodation program also receives legal support from the Legal Division's Office of General Law and Ethics to ensure it is complying with all legal obligations; support from the Bureau's Section 508 Program Manager for technology issues; technical assistance from OCR staff as needed; support from the Department of Treasury's Bureau of the Fiscal Services (BFS) for applicants seeking reasonable accommodations; and contractor medical professional advice when needed. Accommodations are also centrally funded and have been since CFPB opened. In FY 2016, the Bureau received 39 reasonable accommodation requests. The Bureau took an average of 18 days to decide whether to provide reasonable accommodations, and closed all reasonable accommodations in an average of 43 days. The Bureau spent $25,430.59 in reasonable accommodation-related purchases. The Bureau provides a wide range of information and resources through both training and communications to managers and employees about disability-related employment topics, including providing reasonable accommodations and about the Bureau's Reasonable 51 EEO PROGRAM STATUS REPORT FOR FY 2016 Accommodation policy and procedures, specifically. From the first day employees begin their tenure at the Bureau, they are informed about their rights and obligations with respect to disability-related reasonable accommodations. As part of CFPB's New Employee Orientation (NEO) and onboarding sessions, OCR provides a briefing to all newly appointed employees about EEO at the Bureau. At these sessions, employees are specifically told about their right to disability-related reasonable accommodations, and about the Bureau's policy and procedures on reasonable accommodations. OCR staff gives employees the name and contact information for the RAC. Employees are also given a binder of EEO materials that describes the reasonable accommodation process. They also are told that all of this information is readily available on the intranet. All CFPB managers and supervisors are also required to attend the various training sessions (described above), which provide information about the reasonable accommodation process and legal obligations (including a 2-day EEO training led by the EEOC Training Institute). Relatedly, OCR's intranet page has detailed information, including plain-language FAQs, about disability-related reasonable accommodations. OCR also provides supervisors and managers with an EEO Resource Manual containing information about compliance obligations, including information about complying with disability obligations and a copy of the Bureau's reasonable accommodation policies and procedures. In FY 2017, OF-IC will identify avenues where the Reasonable Accommodations program staff can present information on the Reasonable Accommodations program directly to employees and supervisors. CFPB has put in place various other personnel-related policies and procedures that aid in the proactive prevention of discrimination and increase management and program accountability. Having clear and concise policies and procedures minimizes subjectivity, prevents misunderstandings about what CFPB expects from its employees and management officials, clarifies the roles and responsibilities of the various offices within the Bureau, and creates an environment and expectation of consistency in personnel decision-making Bureau-wide. Management officials follow the policies and procedures listed in the table below. TABLE 10 BUREAU POLICIES GOVERNING MAJOR PERSONNEL ISSUES AND PROGRAMS Bureau Policies Governing Major Personnel Issues and Programs Procedures Related to Harassment and Inappropriate Conduct Hiring, Promotion, and Internal Personnel Movements Policy Attorney Hiring and Promotion Policy 52 EEO PROGRAM STATUS REPORT FOR FY 2016 Bureau Policies Governing Major Personnel Issues and Programs Performance Management Program Policy Disciplinary and Adverse Action Policy Alternative Dispute Resolution Policy Administrative Grievance Policy In addition to formal policies, several other tools exist to assist with evenhanded implementation of personnel-related matters including, for example, a Hiring Manager's Guide, recruitment-related resources, career planning resources, and procedures for documenting declining performance. 5.5 Essential Element 5: Efficiency Management Directive 715 explains that agencies must • Have an efficient and fair dispute resolution process and effective systems for evaluating the impact and effectiveness of their EEO programs. Maintain an efficient, fair, and impartial complaint resolution process. Agencies should benchmark against EEOC regulations at 29 C.F.R. Part 1614 and other federal agencies of similar size highly ranked in EEOC's Annual Report on the federal sector complaints process. • Ensure that the investigation and adjudication function of the Agency's complaint resolution process are kept separate from the legal defense arm of the agency or other agency offices with conflicting or competing interests. Establish and encourage the widespread use of a fair alternative dispute resolution (ADR) program that facilitates the early, effective, and efficient informal resolution of disputes. Appoint a senior official as the dispute resolution specialist of the agency charged with implementing a program to provide significant opportunities for ADR for the full range of employment-related disputes. Whenever ADR is offered in a particular workplace matter, ensure that managers at all appropriate levels will participate in the ADR process. 53 EEO PROGRAM STATUS REPORT FOR FY 2016 • Use a complaint tracking and monitoring system that permits the Agency to identify the location, status, and length of time elapsed at each stage of the Agency's complaint resolution process, the issues and the bases of the complaints, the aggrieved individuals/complainants, the involved management officials, and other information necessary to analyze complaint activity and identify trends. • Identify, monitor, and report significant trends reflected in complaint processing activity. Analysis of data relating to the nature and disposition of EEO complaints can provide useful insight into the extent to which an agency is meeting its obligations under Title VII and the Rehabilitation Act. Ensure timely and complete compliance with EEOC orders and the provisions of settlement/resolution agreements. Maintain a system that collects and maintains accurate information on the race, national origin, sex, and disability status of agency employees. • Maintain a system that tracks applicant flow data, which identifies applicants by race, national origin, sex, and disability status and the disposition of all applications. • Maintain a tracking system of recruitment activities to permit analyses of these efforts in any examination of potential barriers to equality of opportunity. Identify and disseminate best workplace practices.20 To these ends, CFPB continuously evaluates its EEO complaint resolution process to ensure it is efficient, fair, and impartial. Neutrality As noted above, the Director of OCR (like the Director of OEOF) reports directly to the Director 20 See MD-715, Model Agency Title VII and Rehabilitation Act Programs, at Section II.E., available at htips:/Avvpiv.peoc.pyfic‘dc‘ra I /LI ir ectives/indr 5.cfrn. 54 EEO PROGRAM STATUS REPORT FOR FY 2016 of CFPB. OCR emphasizes and maintains its neutrality and impartiality, which is critical to having an efficient and fair EEO complaint resolution process. This ensures that employees and managers know that the pre-complaint and investigation stages of the Part 1614 process are not adversarial, that OCR will provide a neutral and impartial factual record, and that, when requested, OCR will issue a final decision assessing the facts and law to determine whether or not one or more of the applicable employment discrimination laws have been violated. The OCR Director exercises full authority to carry out the Part 1614 functions of OCR without Legal Division (i.e., General Counsel) involvement, thus ensuring impartiality and removing any possible conflict of interest. Legal resources within OCR make this possible. OCR staff, sometimes with the assistance of contractors, conducts legal sufficiency reviews of EEO matters, which includes issuing accept/dismiss decisions related to formal complaints, Reports of Investigations (ROIs), and Final Agency Decisions (FADs). The Legal Division, which defends the Bureau in these matters, is firewalled from all activities within OCR and only participates during adversarial portions of the EEO process (hearings and appeals), and during settlement negotiations, or to provide appropriate legal advice or assistance when a manager or supervisor requests it during the course of an EEO investigation. All other Bureau offices are similarly firewalled and kept separate as necessary and appropriate to avoid conflicting or competing interests. EEO Counselings and investigations OCR works to ensure that its counselings and investigations are done within the regulatory timeframes, and that all EEO counselor reports and ROIs are created with a high standard of quality and fairness to both parties. In FY 2016, OCR completed all counselings and related mediations within the prescribed regulatory timeframes. During FY 2016, investigations completed were completed within an average of 267 days. Final agency decisions were completed in an average of 61 days. OCR has also now hired a new Complaints Program Manager who is working to enhance standardization, efficiency, timeliness, and quality of OCR's complaint investigation approach. By conducting EEO counseling, mediation, and investigation services through qualified thirdparty contractors from the GSA Schedule, CFPB provides a fair and effective dispute resolution system in accordance with 29 C.F.R. Part 1614. All contractors meet the 32 hours of training and eight hours of refresher training requirements set by the EEOC's Management Directive 110, and OCR seeks to hold contactors accountable for counseling and investigation processing 55 EEO PROGRAM STATUS REPORT FOR FY 2016 timeframes In FY 2016, CFPB also solicited bids for a Blanket Purchase Agreement with the goal of ensuring consistent timely and high-quality counseling-related services. This contract was awarded at the beginning of FY 2017. OCR also intends to increase the percentage of EEO counselings using OCR employees. Further, the Bureau intends to award and enter into a Blanket Purchase Agreement for investigative services, using an innovative model that will require a limited number of non-rotating contractors to conduct work onsite with OCR staff with the goal of enhancing efficiencies and quality of investigations and ROIs. Alternative Dispute Resolution (ADR) program The Bureau has an ADR Policy, and OCR provides additional information about the benefits of ADR on the Bureau's intranet. These materials explain the ADR process, why employees should consider ADR, the different types of ADR, and how an employee can request ADR. The Bureau's ADR Policy makes clear that although ADR is voluntary for EEO filers, supervisors and managers must participate in good faith if a filer elects ADR. The goals in having this strong ADR policy include resolving conflicts at an early stage, improving workplace communication and morale, and creating a more efficient EEO Program. OCR offers ADR during the pre-complaint and formal complaint stages of the EEO process, including while cases are pending before the EEOC for hearing or on appeal. The Bureau also offers mediation on an ad hoc basis for non-EEO workplace disputes through OHC, under its Administrative Grievance policy, and through its negotiated grievance process. During FY 2016, OCR scheduled approximately 12 mediations. OCR is in the process of updating, to the extent needed, its ADR Policy to ensure that it complies with the clarified standards in the revised Management Directive 110 (effective August 5,2015). Consistent with the revised MD-110, the Legal Division — not the responsible management official directly involved in the dispute — has settlement authority for EEO cases at the administrative level, including during EEO counseling. OCR continues to assess internal data related to the success of the ADR program, including resolution rates, and is collecting information about best practices and benchmarks related to a recommendation for protocols to create a structure that may help better support openness and willingness to employ creative and early resolution options. The Agency has authorized ample funding for OCR and OHC to use contract ADR professionals to resolve workplace disputes. 56 EEO PROGRAM STATUS REPORT FOR FY 2016 In addition, and as already described above, OCR procured approval to hire a Conflict Prevention Program Manager to enhance EEO and non-EEO ADR initiatives. This individual onboarded early in FY 2017, and previously led the nationwide ADR program for Congress (30,000+ employees). OCR also detailed a Senior Attorney from another CFPB division for a four-month period to assist OCR in improving its ADR efforts. Complaint and workforce tracking and monitoring systems During FY 2016, OCR staff spent a significant amount of time and resources related to change management for implementing and using the Micropact iComplaints platform. This is a webbased EEO case management solution that provides a broad range of capabilities for reporting (including No FEAR Act and Form 462), processing, tracking, and managing the overall effectiveness of the CFPB's EEO Program. Throughout the first two quarters of FY 2016, OCR staff migrated case-related data (including legacy data from the Bureau and the Department of Treasury) into the iComplaints system. OCR also provided all staff with training directly from Micropact (the software vendor), and created and disseminated detailed protocols and SOPs for using the new system to ensure consistency in system inputs and data integrity. In light of these extensive change-management initiatives, the software has proven immensely helpful in enhancing case-related processing efficiencies and easing the administrative burden associated with program reporting obligations. The software already has allowed OCR to more efficiently comply with EEOC regulations and reporting obligations, identify and monitor internal EEO trends, and redirect staff time away from manual tracking and reviewing complaints data and towards work on other mission-critical projects. During FY 2017, OCR intends to procure a related complaints "executive dashboard" solution that will enable OCR, along with its new data analyst, to conduct more granular and systematic analysis of case processing (e.g., basis, issue, timeframes, etc.) trends. The Bureau also has in place various data systems that allow for periodic examinations of the CFPB's workforce profiles by demographic characteristics. These systems maintain accurate information on the race, national origin, sex, and disability status of Bureau employees. Further, these systems allow OHC and OEOF to monitor the data to determine whether triggers may exist that could lead to barriers for equal employment opportunities. Finally, OMWI and OHC track the Bureau's recruitment efforts to facilitate data analysis on whether recruitment programs are creating barriers to equal opportunity. CFPB also uses information it obtains from OPM's USAJobs.gov to obtain applicant flow data. For instance, 57 EEO PROGRAM STATUS REPORT FOR FY 2016 CFPB has been collecting applicant data for executive positions. 5.6 Essential Element 6: Responsiveness and legal compliance According to Management Directive 715, Federal agencies must: • Ensure that they are in full compliance with the law, including EEOC regulations, orders, and other written instructions. • Report Agency program efforts and accomplishments to EEOC and respond to EEOC directives and orders in accordance with EEOC instructions and time frames. • Ensure that management fully and timely complies with final EEOC orders for corrective action and relief in EEO matters.21 CEPB is committed to ensuring full compliance with the law and incorporating EEO best practices into its everyday business. OCR staff is tasked with monitoring and complying with all orders and directives by EEOC Administrative Judges and the EEOC's Office of Federal Operations. The OCR Director's performance standards require compliance with EEOC orders. OCR staff is also responsible for compliance with EEOC orders, and has received formal training in EEO compliance. OCR issued a Final Agency Decision in FY 2016 finding violations of both the Rehabilitation Act and Title VII of the Civil Rights Act with respect to one individual (discussed above). This finding and accompanying relief order underscore the Bureau's ability to ensure effective compliance with applicable EEO laws. 21 See MD-715, Model Agency Title VII and Rehabilitation Act Programs, at Section II.F., available at haps://vistorygeoc.8o yfiederal/directiyes/mdr 5.cfm. 58 EEO PROGRAM STATUS REPORT FOR FY 2016 The Bureau has also complied with regulatory requirements to submit an annual Form 462 Report, EEOC MD-715 Report, the Federal Equal Opportunity Recruitment Program (FEORP) Report, the Disabled Veterans Affirmative Action Program (DVAAP) Report, and quarterly and annual No FEAR Act reports. 59 EEO PROGRAM STATUS REPORT FOR FY 2016 6. Summary of workforce profiles The workforce profile data represents the demographics of the CFPB workforce by race, sex, national origin, and disability and was retrieved from CFPB database systems. The data is based on information as of September 30, 2016. As of the end of FY 2016, the total CFPB workforce was 1,645 employees, including 1,494 permanent employees and 151 temporary employees. The total workforce grew by 112 employees during FY 2016, representing a rate of change of 7.31 percent. During FY 2016, all EEO group populations experienced net growth with the exception of males and females of two or more races and American Indian/Alaska Native males and females. Compared to the U.S. Census Civilian National Labor Force (CLF), overall CFPB demographics have not changed significantly since FY 2015.22 White men, followed by White women, comprise the largest racial groups in CFPB, followed by Black women and Black men, respectively. There was a growth of 11 new employees with reportable disabilities from the beginning of FY 2016 to the close of FY 2016, representing a net change of 8.27 percent, which exceeds the rate of change for the total workforce. 22 The CLF is derived from the 200E-2010 American Community Survey (ACS) Equal Employment Opportunity Tabulation (EEO Tabulation). The EEO Tabulation was originally released by the U.S. Census Bureau on November 29, 2012. It provides external benchmarks to assist federal agencies in monitoring employment practices and enforcing workforce civil rights laws. Federal agencies are required to use the EEO Tabulation in preparing their annual MD-715 EEO Program Status reports. See https://i726701 teoc.gov//f oder al/direcLives/Lech_assistance_06" PEO_tabulation.cfm. 60 EEO PROGRAM STATUS REPORT FOR FY 2016 7. Workplace analysis TABLE 11: ALL TOTAL WORKFORCE - FY 201523 Two or ALL Hispanic White Black Asian NH/OPI Al/AN 1,533 95 983 289 141 2 12 11 6.20% 64.12% 18.85% 920% 0.13% 0.78% 0/2% 9.96% 72.36% 12.02% 3.90% 0.14% 1.08% 0.54% CLF More Male 805 50 560 110 72 0 8 5 Female 728 45 423 179 69 2 4 6 TABLE 12: ALL 7/0 23 In TOTAL WORKFORCE - FY 2016 ALL Hispanic White Black Asian NH/OPI Al/AN 1,645 99 1,038 328 156 3 10 Two or More24 11 6.02% 63.10% 19.94% 948% 0.18% 0.61% 0.67% the data tables in this report, total percentages across rows may not always equal 100% due to rounding. Race-related employee data (including data on employees who identify as two or more races) in this report is tabulated using methodologies prescribed by the Office of Management and Budget for civil rights monitoring and enforcement. See Revisions to the Standards for Classification of Federal Data on Race and Ethnicity (Oct. 30, 1997); OMB Bulletin No. 2, Guidance on Aggregation and Allocation of Data on Race for Use in Civil Rights Monitoring and Enforcement (March 9,2000). Depending upon its purpose, race data (including data on employees who identify as two or more races) prepared and included in other CEP B reports may not use the same methodology. 24 61 EEO PROGRAM STATUS REPORT FOR FY 2016 ALL CLF Two or Hispanic White Black Asian NH/OPI Al/AN 996% 72.36% 12.02% 390% 0.14% 108% 054% Moren Male 844 54 577 121 80 1 7 4 Female 801 45 461 207 76 2 3 7 Data as of September 30, 2016. Workforce numbers for FY 2015 included in this FY 2016 Status Report may differ slightly from corresponding data reported in the FY 2015 Status Report. This is due to retroactive processing of personnel actions, late processing of personnel actions, or other changes made in applicable data systems since the data was finalized for the FY 2015 Status Report. TABLE 13: TOTAL WORKFORCE - FY 2015 COMPARED TO FY 2016 ALL Hispanic White Black Asian NH/OPI Al/AN Two or More Difference +112 +4 +55 +39 .15 +1 -2 0 Male +39 +4 +17 +11 +8 +1 -1 -1 Female +73 0 +38 +28 .7 +0 -1 +1 Male -1.20% 0.02% -1.45% 0.180/o 0.17% 0.06% -0.10% -0.08% Female 1.20% -0.20% 043% 0.91% 0.12% -0.01% -0.08% 0.03% Net Change 7.31% Male 4.84% 8.00% 3.04% 10.00% 11.11% 100.00% -1250% -20.00% Female 10.03% 0.00% 8.98% 15.64% 10.14% 0.00% -25.00% 16.67% Ratio Change At the close of FY 2016, CFPB employed a total of 1,645 employees - 1494 permanent employees and 151 temporary employees. This was an increase in temporary employees from 141 to 151; however, temporary employees slightly decreased as a percentage of the total workforce. In FY 2015, temporary employees made up 9.20% of the workforce and in FY 2016, temporary employees made up 9.18% of the workforce. The number of permanent employees increased by 102(90.82% of the total workforce in FY 2016). Males totaled 767 or 51.34% of the permanent workforce - a decrease from 52.56% in FY 2015 and slightly lower when compared to the CLF availability of 51.86%. Females totaled 727 or 48.66% of the permanent workforce, an increase from 47.44% in FY 2015, and slightly higher as compared to the CLF availability of 48.14%. 62 EEO PROGRAM STATUS REPORT FOR FY 2016 7.1 Permanent workforce: participation of class grouping TABLE 14. PERMANENT WORKFORCE Total Total Group number FY 2016 Percentage number FY 2015 Percentage Net change CLF White Male 519 34.74% 501 35.99% 3.59% 38.33% While Female 413 27.64% 379 27.23% 8.97% 34.03% Black Male 116 7.76% 105 7.54% 10.48% 5.49% Black Female 195 13.05% 169 12.14% 15.38% 6.53% Hispanic Male 47 3.15% 44 3.16% 6.82% 5.17% Hispanic Female 41 2.74% 40 2.87% 2.50% 4.79% Asian Male 74 4.95% 67 4.81% 10.45% 1.97% Asian Female 67 4.48% 63 4.53% 6.35% 1.93% NH/P1 Male 1 0.07% 0 0.00% 100.00% 0.07% NH/P1 Female 2 0.13% 2 0.14% 0.00% 0.07% Al/AN Male 7 0.47% 8 0.57% -12.50% 0.55% Al/AN Female 3 0.20% 3 0.22% 0.00% 0.53% 2 or More Male 3 0.20% 5 036% -40.00% 026% 2 or More Female 6 0.40% 6 0.43% 0.00% 0.28% For the permanent workforce, White females are employed at CFPB at a rate of 27.64% (413), which is below the CLF of 34.03%. The percentage of White females slightly increased from the FY 2015 rate of 27.23% (379). Hispanic males are employed at a rate of 3.15% (47) and Hispanic females at 2.74% (41), which remain below the CLF of 5.17% and 4.79%, respectively. American Indian/Alaska Native males are employed at 0.47% (7), which is a net change of -12.50% compared with FY 2015 when American Indian/Alaska Native males were employed at 0.57% (8). Males who are two or more races were reported at 0.20% (3), slightly below the CLF of 0.26%; this is a net change of -40% compared with FY 2015 when males of two or more races 63 EEO PROGRAM STATUS REPORT FOR FY 2016 were employed at 0.36% (5) Asian males are employed at a rate of 4.95% (74) and Asian females are employed at a rate of 4.48% (67), which are above the CLF of 1.97% and 1.93%, respectively. CFPB employed Black males at a rate of 7.76% (116) and Black females at 13.05% (195), which were above the CLF of 5.49% and 6.53%, respectively. 7.2 Temporary workforce: participation of class grouping TABLE 15: TEMPORARY WORKFORCE Group Total number FY 2016 Percentage Total number FY 2015 Percentage Net change CLF White Male 58 3841% 59 41.84% -1.69% 38.33% White Female 48 31.79% 44 31.21% 9.09% 34.03% Black Male 5 3.31% 5 3.55% 0.00% 5.49% Black Female 12 7.95% 10 7.09% 20.00% 6.53% Hispanic Male 7 4.64% 6 426% 16.67% 5.17% Hispanic Female 4 2.65% 5 3.55% -20.00% 4.79% Asian Male 6 3.97% 5 3.55% 20.00% 1.97% Asian Female 9 5.96% 6 4.26% 0.00% 1.93% NH/P1 Male 0 0.00% 0 0.00% 0.00% 0.07% NH/P1 Female 0 0.00% 0 0.00% 0.00% 0.07% Al/AN Male 0 0.00% 0 0.00% 0.00% 0.55% Al/AN Female 0 0.00% 1 0/1% -100.00% 0.53% 2 or More Male 1 0.66% 0 0.00% 100.00% 0.26% 2 or More Female 1 0.66% 0 0.00% 100.00% 0.28% 64 EEO PROGRAM STATUS REPORT FOR FY 2016 The temporary workforce grew by 7.09% when compared with FY 2015 from 141 in FY 2015 to 151 employees in FY 2016. At the end of FY 2016, there were no Native Hawaiian/Pacific Islander males or females and no American Indian/Alaska Native males or females in the temporary workforce. There is one male and one female of two or more races in the temporary workforce, a net change of 100% (both at 0 employees in FY 2015). Hispanic females experienced a net change of -20.00% from 5 to 4 employees between FY 2015 to FY 2016. White females, Black females, and Asian males and females experienced an increase in representation in the temporary workforce, and their respective representations are all higher than the CLF. 7.3 Analysis of senior pay bands by grouping (permanent employees) In the permanent workforce, White males and females, Black males and females, Hispanic males and females, and Asian males and females are represented in all senior bands CN-53 to CN-81/92/90. Native Hawaiian/Pacific Islander males are not represented in any senior bands between CN-53 to CN-81/82/90 and Native Hawaiian/Pacific Islander females are represented only in senior band CN-60. American Indian/Alaska Native males are represented in senior band CN-53 and CN-60. American Indian/Alaska Native females are represented in senior bands CN-60 and CN-71 Females of two or more races are represented at senior bands CN-60 and CN-71, while males of two or more races are only represented at senior band CN-60. TABLE 16: SENIOR PAY BANDS BY GENDER (PERMANENT WORKFORCE) GS-13/CN-53 GS-14/CN-60 65 Male Female 165 140 54.10% 45.90% 185 191 49.20% 50.80% EEO PROGRAM STATUS REPORT FOR FY 2016 GS-15/CN-71 CN-81/82/90 126 124 50.40% 49.60% 30 24 55.56% 44.44% TABLE 17 SENIOR PAY BANDS BY GROUPING (PERMANENT WORKFORCE) GS13/ ON-53 % GS14/ ON-GO GS15/ ON-71 CN81/82/ 90 WM WF BM BF HM HF AM AF NH/ PI M NH/ PI F Al/A N M Al/A N F 2+M 2+F 108 77 28 39 12 7 14 17 0 0 3 0 0 0 35.41 25.25 9.18 % 12.79 % 3.93 °/. 2.30 % 4.59 % 5.57 % 0.00 c/c, 0.00 c/c, 0.98 % 0.00 °/. 0.00 % 0.00 c/c, 137 124 19 36 9 10 17 17 0 1 1 I 2 2 36.44 °/. 32.98 5.05 % 9.57 % 2.39 °/. 2.66 % 4.52 % 4.52 % 0.00 c/c, 0.27 c/c, 0.27 % 0.27 °/. 0.53 % 0.53 c/c, 102 87 11 16 6 5 7 13 0 0 0 I o 2 40.80 °/. 34.80 4.40 % 6.40 % 2.40 °/. 2.00 % 2.80 % 5.20 % 0.00 `/. 0.00 `/. 0.00 % 0.40 °/. 0.00 % 0.80 `/. 18 18 3 3 3 1 6 2 0 0 0 0 0 0 33.33 33.33 5.56 % 5.56 % 5.56 % 1.85 % 11.11 % 3.70 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 7.4 New hires: permanent Permanent new hires for FY 2016 consisted of 104 females (56.52%), which is higher than the CLF availability of 48.14%. However, White females were 27.17% (50) of the new hires, which is lower than the 34.03% CLF availability and consistent with FY 2015. Black females were 21.20% (39) of the new hires, which is above the 6.53% CLF availability. Black males were 6.52% (12) of the new hires, which is also above the 5.49% CLF availability and which is consistent with FY 2015. Hispanic females and Hispanic males were 3.26% (6) and 2.72% (5), respectively, of the new hires, which is lower than the respective 4.79% and 5.17% CLF availability. However, the percentage of new hire Hispanic females is an improvement over FY 2015. Asian females and 66 EEO PROGRAM STATUS REPORT FOR FY 2016 Asian males were 4.35% (8) and 5.43% (10), respectively, of the new hires, which are above the respective 1.93% and 1.97% CLF availability and an improvement for Asian new hire representation over FY 2015. Native Hawaiian/Pacific Islander females and males were 0.00% (0) and 0.54% (1), respectively, which is below the 0.07% CLF availability for females, but above the 0.07% CLF availability for males and also an improvement from FY 2015. American Indian/Alaska Native females and males were 0.00% (0) of the new hires, which is lower than the respective 0.53% and 0.55% CLF availability. Females of two or more races were 0.54% (1) of the new hires, which is higher than the CLF availability of 0.28%. Males who are two or more races were not among the permanent new hires for FY 2016. TABLE 18 NEW PERMANENT HIRES BY GENDER Male Female Number 80 104 Percent 43.48% 56.52% CLF 51.86% 48.14% TABLE 19: NEW PERMANENT HIRES BY GROUPING NH/ NH/ Al/A Al/A WM WF BM BF HM HF AM AF PI PI N N 2+M 2+F 52 50 12 39 5 6 10 8 1 0 0 0 0 28.26 27.17 6.52 21.20 2.72 3.26 5.43 4.35 0.54 0.00 0.00 0.00 0.00 0.54 % % % % % % % % % % % % CLF 38.33 34.03 5.49 6.53 5.17 4.79 1.97 1.93 0.07 0.07 0.55 0.53 0.26 0.28 % % % % % % % % % 7.5 New hires: temporary Temporary hires for FY 2016 consisted of 59(49.17%) females, which is higher than the CLF availability of 48.14%. White females consisted of 31.67% (38) of the temporary hires, which is lower than the CLF availability of 34.03%. Black males consisted of 5.00% (6) of the temporary hires, which is slightly lower than the CLF availability of 5.49%. Hispanic males made up 4.17% (5) of the temporary hires and Hispanic females consisted of 0.83% (1), which are both lower 67 EEO PROGRAM STATUS REPORT FOR FY 2016 than the CLF availability of 5.17% and 4.79%, respectively. Asian males made up 5.00% (6) and Asian females comprised 7.50% (9) of the temporary hires, which both significantly exceed the CLF availability of 1.97% and 1.93%, respectively. Native Hawaiian/Pacific Islander males and females and American Indian/Alaska Native males and females were not among the temporary hires for FY 2016. Males and females who were two or more races made up 0.83% (1) each, which exceeded the respective CLF availability of 0.26% and 0.28%. TABLE 20: NEW TEMPORARY HIRES BY GENDER Male Female Number 61 59 Percent 50.83% 49.17% CLF 51.86% 48.14% TABLE 21. NEW TEMPORARY HIRES BY GROUPING c/0 CLF WM WF BM BF HM HF AM AF NH/ NH/ PI PI MF Al/A Al/A N N MF 2+M 2+F 43 38 6 10 5 1 6 9 0 0 0 0 1 1 35.83 07, 31.67 5.00 % 8.33 % 4.17 % 0.83 % 5.00 % 7.50 % 0.00 % 0.00 % 0.00 % 0.00 % 0.83 % 0.83 % 38.33 34.03 5.49 °A, 6.53 °AL 5.17 °A, 4.79 °AL 1.97 °A, 1.93 0.07 % 0.07 °A, 0.55 °AL 0.53 °A, 0.26 °AL 0.28 % 7.6 Mission critical occupations CFPB has four key occupational groups that are instrumental and deemed "mission critical" to 68 EEO PROGRAM STATUS REPORT FOR FY 2016 performing the Bureau's mandates: Examiner (0570), General Attorney (0905), Economist (0110), and Miscellaneous Administration and Program (0301). Each of the mission critical occupations is mapped to a relevant U.S. Census occupation code. The EEO tabulation tool then outputs the relevant occupational CLF based on the cross-walk of codes for citizens in the nation-wide database.25 7.6.1 Examiner (0570) During FY 2016, CFPB employed 428 examiners (0570 series) — 283 (66.12%) males and 145 (33.88%) females. The demographic breakdown was as follows: • White males: 172 (40.19%) White females: 83(19.39%) Black males: 61(14.25%) Black females: 36(8.41%) Hispanic males: 19(4.44%) Hispanic females: 9(2.10%) • Asian males: 25(5.84%) Asian females:13 (3.04%) Native Hawaiian/Pacific Islander males:1 (0.23%) • Native Hawaiian/Pacific Islander females: 1(0.23%) • American Indian/Alaska Native males: 5(1.17%) American Indian/Alaska Native females:1 (0.23%) 25 See hitps://,opp 69 , oc.gov/Ieder lidirectives/00-09opmcod c‘.cf rn. EEO PROGRAM STATUS REPORT FOR FY 2016 • Females of two or more races: 2(0.47%) Males of two or more races: 0(0.00%) TABLE 22: EXAMINERS BY GENDER Male Female Number 283 145 Percent 66.12% 33.88% Occ CLF 54.70% 45.30% 51.31% 48.69%. Total Workforce Participation (TWP) TABLE 23 Occ CLF TWP EXAMINERS BY GROUPING WM WF BM BF HM HF AM AF NH/ NH/ PI PI MF Al/A Al/A N N MF 2+M 2+F 172 83 61 36 19 9 25 13 1 1 5 1 0 2 40.19 19.39 14.25 8.41 4.44 0/0 0/0 0/0 04 2.10 % 584 0/0 % 3.04 % 0.23 % 023 % 1.17 % 023 % 0.00 % 0.47 % 44.10 28.30 3.60 8.70 3.10 % 3.70 % 3.70 % 4.00 % 0.00 % 0.00 % 0.10 % 0.30 % 0.20 % 0.30 % 3.28 %/0 2.74 4.86 4.62 0.06 0.12 0.43 0.18 0.24 0.43 % % 0/0 % 35.08 28.02 7.36 12.58 0/. 00/ 00/0 7.6.2 General attorney (0905) During FY 2016, CFPB employed 316 employees in the General Attorney (0905 series) occupational series - 44.94% (142) males and 55.06% (174) females. The demographic breakdown was as follows: • White males (114) comprised 36.08% White females (128) comprised 40.51% Black males (9) comprised 2.85% 70 EEO PROGRAM STATUS REPORT FOR FY 2016 Black females (16) comprised 5.06% Hispanic males (7) comprised 2.22% • Hispanic females (7) comprised 2.22% • Asian males (9) comprised 2.85% Asian females (19) comprised 6.01% American Indian or Alaska Native males (1) comprised 0.32% • American Indian or Alaska Native females (1) comprised 0.32% • Males of two or more races (2) comprised 0.63% Females of two or more races (3) comprised 0.95% TABLE 24: GENERAL ATTORNEYS BY GENDER Male Female Number 142 174 Percent 44.94% 55.06% Occ CLF 66.70% 33.30% 51.31% 48.69% Total Workforce Participation (TWP) TABLE 25 Occ CLF TWP 71 GENERAL ATTORNEYS BY GROUPING WM WF BM BF HM HF AM AF NH/ NH/ PI PI MF Al/A Al/A N N MF 2+M 2+F 114 128 9 16 7 7 9 19 0 0 1 1 2 3 36.08 40.51 °A 2.85 % 5.06 2.22 % 2.22 2.85 % 6.01 °A 0.00 % 0.00 0.32 % 0.32 % 0.63 % 0.95 % 59.70 % 26.70 °A 2.10 % 2.60 % 2.50 % 1.80 % 1.80 % 1.80 % 0.00 % 0.00 % 0.30 % 0.20 % 0.20 % 0.20 % 35.08 28.02 7.36 % 12.58 °A 3.28 % 2.74 °A 4.86 % 4.62 % 0.06 % 0.12 0.43 AA ° 0.18 % 0.24 0.43 °A) °/ EEO PROGRAM STATUS REPORT FOR FY 2016 7.6.3 Economist (0110) During FY 2016, CFPB employed 44 employees in the Economists (0110 series) occupational series — 61.36% (27) males and 38.64% (17) females. The demographic breakdown was as follows: • White males (22) comprised 50% • White females (8) comprised 18.18% Black males (2) comprised 4.55% Black females (2) comprised 4.55% • Hispanic males (2) comprised 4.55% • Asian males (1) comprised 2.27% Asian females (7) comprised 15.91% TABLE 26: ECONOMISTS BY GENDER Male Female Number 27 17 Percent 61.36% 38.64% Occ CLF 67.10% 32.90% 51.31% 48.69% Total Workforce Participation (TWP) TABLE 27. ECONOMIST BY GROUPING NH/ NH/ Al/A Al/A WM WF BM BF HM HF AM AF PI PI N N 2+M 2+F MF MF 72 22 8 2 2 2 0 1 7 0 0 0 0 0 0 50.00 18.18 4.55 4.55 4.55 % 0.00 % 2.27 % 15.9 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % EEO PROGRAM STATUS REPORT FOR FY 2016 Occ CLF NH/ NH/ PI PI MF Al/A Al/A N N MF 2+M 2+F 4.50 3.10 0.00 0.10 0.50 0.10 0.20 0.00 % 's/0 c/o 's/0 % % % c/o 214 4.86 4.62 0.06 0.12 043 0.18 0.24 0.43 % % % % % % % % % WF BM BF HM HF AM 55.80 25.20 2.80 2.70 3.30 1.80 c/o % % % 7.36 12.58 328 % % TWP AF WM 35.08 28.02 7.6.4 Miscellaneous administration and program (0301) During FY 2016, CFPB employed 321 employees in the Miscellaneous Administration and Program (0301 series) occupational series — 46.11% (148) males and 53.89% (173) females. The demographic breakdown was as follows: White males (100) comprised 31.15% White females (83) comprised 25.86% Black males (23) comprised 7.17% Black females (60) comprised 18.69% Hispanic males (8) comprised 2.49% • Hispanic females (12) comprised 3.74% • Asian males (16) comprised 4.98% Asian females (15) comprised 4.67% Native Hawaiian or Pacific Islander females (1) comprised 0.31% • American Indian or Alaska Native males (1) comprised 0.31% American Indian or Alaska Native females (1) comprised 0.31% Females of two or more races (1) comprised 0.31% • 73 Males of two or more races (0) comprised 0.00% EEO PROGRAM STATUS REPORT FOR FY 2016 TABLE 28. MISC. ADMINISTRATION BY GENDER Male Female Number 148 173 Percent 46.11% 53.89% Occ CLF 36.70% 63.300/o Total Workforce Participation (TWP) 51.31% 48.69% TABLE 29: Occ CLF TWP MISC. ADMINISTRATION BY GROUPING WM WF BM BF HM HF AM AF NH/ NH/ PI PI MF Al/A Al/A N N MF 2+M 2+F 100 83 23 60 8 12 16 15 0 1 1 1 0 1 31.15 5/0 25.86 7.17 % 18.69 % 2.49 % 3.74 % 4.98 % 4.67 % 0.00 % 0.31 % 0.31 % 0.31 % 0.00 % 0.31 % 27.10 % 43.80 0/. 3.60 0/6 8.90 % 2.80 0/6 5.80 % 2.60 0/6 3.60 % 0.00 0.10 °/. 0.20 `A, 0.50 % 0.20 0.30 35.08 28.02 7.36 % 12.58 % 3.28 % 2.74 % 4.86 % 4.62 % 0.06 % 0.12 % 0.43 % 0.18 % 0.24 % 0.43 % 7.7 Non-competitive promotion eligibility Throughout FY 2016, 341 employees were eligible for career ladder promotions, 196 of which were males and 145 of which were females. Of the 341 who were eligible for career ladder promotions, 301 received the promotion within 1 to 12 months' time in band, 4 received the promotion within 12-24 months, and 9 received the promotion in 25+ months. Of those who were eligible for promotion in FY 2016: • 122(35.78%) were White males 64(18.77%) were White females • 74 33(9.68%) were Black males EEO PROGRAM STATUS REPORT FOR FY 2016 • 56(16.42%) were Black females 18(5.28%) were Hispanic males • 11(3.23%) were Hispanic females • 21(6.16%) were Asian males • 13(3.81%) were Asian females 1(0.29%) was a Native Hawaiian or Pacific Islander male • 1 (0.29%) was a male of two or more races • 1 (0.29%) was a female of two or more races Of the 341 employees eligible to receive a career ladder promotion, 27 did not receive a career ladder promotion: • 10(37.04%) were White males 6(22.22%) were White females • 3(11.11%) were Black males • 3(11.11%) were Black females • 2(7.41%) were Hispanic males • 2 (7.41%) were Hispanic females • 1(3.70%) was an Asian female TABLE 30 . NON-COMPETITIVE PROMOTIONS BY GENDER Male Female Eligible for Promotions 196 145 Percent (of those eligible) 57.48% 42.52% Did Not Receive 15 12 75 EEO PROGRAM STATUS REPORT FOR FY 2016 Percent (of those not receiving) TABLE 31. # 1-12 mos (#) 1-12 mos (%) 13-24 mos (#) 13-24 mos (%) 25+ mos (#) 25+ mos (%) Did not receive (F) Did not receive (%)26 Male Female 55.56% 44.44% ELIGIBLES FOR NON-COMPETITIVE PROMOTIONS BY GROUPING WM WF BM BF HM HF AM AF NH/ PI M NH/ PI F Al/A N M Al/A N F 2+M 2+F 122 64 33 56 18 11 21 13 1 0 0 0 1 1 35.78 18.77 9.68 16.42 5.28 % 3.23 °A 6.16 % 3.81 °A 0.29 % 0.00 °A 0.00 °A 0.00 % 0.29 °A 0.29 % 110 58 27 45 16 9 21 12 1 0 0 0 1 1 36.54 19.27 8.97 14.95 5.32 % 2.99 % 6.98 % 3.99 % 0.33 % 0.00 % 0.00 % 0.00 % 0.33 % 0.33 % 1 0 0 3 0 0 0 0 0 0 0 0 0 0 25.00 0.00 0.00 75.00 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 1 0 3 5 0 0 0 0 0 0 0 0 0 0 11.11 0.00 33.33 55.5 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 10 6 3 3 2 2 0 1 0 0 0 0 0 0 37.04 yin 22.22 °A 11.11 % 11.11 % 7.41 % 7.41 % 0.00 % 3.70 °A 0.00 % 0.00 °A 0.00 % 0.00 °A 0.00 % 0.00 % 26 Under the Examiner Commission Program (ECP), it may take longer than 12 months for an examiner to be noncompetitively promoted since commissioning is required to meet the minimum qualifications for non-competitive promotion to the CN-52. Examiners will still have the ability to non-competitively be promoted to the CN-52 once they fulfill the promotion requirements. 76 EEO PROGRAM STATUS REPORT FOR FY 2016 7.8 Separations 7.8.1 Total separations A total of 96 permanent employees were separated during FY 2016 — 55 (or 57.29%) males and 41 (or 42.71%) females. Separations include resignations, terminations, transfers, and retirements. White males, at 41 (or 42.71%), were the largest group separated. Other rates of separation include: White females — 17 or 17.71% Black males —4 or 4.17% Black females —13 or 13.54% Hispanic males —4 or 4.17% Hispanic females —4 or 4.17% • Asian males —3 or 3.13% Asian females —6 or 6.25% American Indian or Alaska Native — 1 or 1.04% • Males of two or more races —2 or 2.08% • Females of two or more races — 1 or 1.04% TABLE 32 . TOTAL SEPARATIONS BY GENDER Male Female Number 55 41 Percent 57.29% 42.71% 77 EEO PROGRAM STATUS REPORT FOR FY 2016 TABLE 33: TOTAL SEPARATIONS BY GROUPING NH/ NH/ Al/A Al/A WM WF BM BF HM HF AM AF PI PI N N 2+M 2+F MF MF 41 17 42.71 17.71 4 13 4 4 3 6 0 0 1 0 2 1 4.17 13.54 % 6/6 4.17 4.17 % 6/6 3.13 6.25 % 0.00 % 0.00 % 1.04 % 0.00 % 2.08 % 1.04 % 6/6 7.8.2 Resignations Of the 96 separations, 59 were resignations, the largest group of whom was White males (27) at 45.76%. Other resignation rates include: 9 or 15.25% White females 3 or 5.08% Black males • 5 or 847% Black females • 3 or 5.08% Hispanic males 3 or 5.08% Hispanic females • 1 or 1.69% Asian males • 6 or 10.17% Asian females 1 or 1.69% American Indian or Alaska native males TABLE 34: RESIGNATIONS BY GENDER Male Female Number 35 24 Percent 59.32% 40.68% 78 EEO PROGRAM STATUS REPORT FOR FY 2016 TABLE 35: RESIGNATIONS BY GROUPING NH/ NH/ Al/A Al/A WM WF BM BF HM HF AM AF PI PI N N 2+M 2+F MF MF 27 9 3 5 3 3 1 6 0 0 1 0 0 1 45.76 15.25 5.08 0/0 8.47 T. 5.08 T. 5.08 0/0 1.59 % 10.17 % 0.00 % 0.00 % 1.69 T. 0 0.00 /0 0.00 T. 1.59 T. 7.8.3 Terminations There were 0 terminations in FY 2016. TABLE 36: TERMINATIONS BY GENDER Male Female 0.00% 0.00% Number Percent TABLE 37. TERMINATIONS BY GROUPING NH/ NH/ Al/A Al/A WM WF BM BF HM HF AM AF PI PI N N 2+M 2+F MF MF 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 /0 % % % % % % % % % % % % 0 7.8.4 Transfers to another federal agency In FY 2016 there were 23 transfers -13 (or 56.52%) males and 10 (or 4348%) females. Other transfer rates include: 79 • 7 White males (30.43%) • 3 White females (13.04%) • 1 Black male (4.35%) EEO PROGRAM STATUS REPORT FOR FY 2016 • 6 Black females (26.09%) • 1 Hispanic male (4.35%) • 1 Hispanic female (4.35%) • 2 Asian males (8.70%) 2 males of two or more races (8.70%) TABLE 38: TRANSFERS BY GENDER Male Female Number 13 10 Percent 56.52% 43.48% TABLE 39: TRANSFERS BY GROUPING NH/ NH/ Al/A Al/A WM WF BM BF HM HF AM AF PI PI N N 2+M 2+F MF MF 7 3 1 6 1 1 2 0 0 0 0 0 2 0 30.43 13.04 4.35 % 26.09 % 4.35 % 4.35 % 8.70 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 8.70 % 0.00 % 7.8.5 Retirements During FY 2016, there were 12 retirements: 7 males (or 58.33%) and 5 females (or 41.67%). Of the 12 retirements,] were White males (58.33%), 4 were White females (33.33%) and 1 was a Black female (8.33%). TABLE 40. RETIREMENTS BY GENDER Male Female Number 7 5 Percent 58.33% 41.67% 80 EEO PROGRAM STATUS REPORT FOR FY 2016 TABLE 41: RETIREMENTS BY GROUPING NH/ NH/ Al/A Al/A WM WF BM BF HM HF AM AF PI PI N N 2+M 2+F MF MF 7 4 0 1 0 0 0 0 0 0 0 0 0 0 58.33 33.33 0.00 °/. 8.33 % 0.00 °/. 0.00 % 0.00 °/. 0.00 % 0.00 % 0.00 % 0.00 % 0.00 °/. 0.00 % 0.00 % 7.9 Awards A new Awards and Recognition Article to the Bureau's Collective Bargaining Agreement was negotiated, adopted, and implemented in FY 2016 for FY 2016. During FY 2016, time off awards (NOA 846) and individual spot awards (NOA 887) were processed. Additional awards including Superior Achievement awards (also NOA 887) and Team Achievement awards (NOA 889) were not processed during FY 2016 and will be reported on in the FY 2017 status report. CFPB's Awards program year will always span two fiscal years, so a full program year analysis will be conducted using a more complete data set than shown here (which reflects only a partial first year program implementation). For the awards paid out in FY 2016, the different award breakdown averages were as follows: • Cash awards, average $428.26 • Time off awards (9 hours of less), average 8 hours • Time off awards (over 9 hours), average 20.66 hours TABLE 42: CASH AWARDS BY GENDER Male Female Cash Award (J) 149 158 Cash Award (%) 48.53% 51.47% Average Award $432.55 $424.21 81 EEO PROGRAM STATUS REPORT FOR FY 2016 TABLE 43: CASH AWARDS BY GROUPING NH/ NH/ Al/A Al/A WM WF BM BF HM HF AM AF PI PI N N 2+M 2+F MF MF 106 87 15 47 16 8 10 15 0 0 0 0 2 1 34.53 28.34 4.89 % 15.31 % 5.21 % 2.61 % 3.26 % 4.89 % 0.00 % 0.00 % 0.00 % 0.00 % 0.65 % 0.33 % TABLE 44: TIME OFF AWARDS (9 HOURS OR LESS) BY GENDER Male Female Time Off, 9 hours or less (4) 27 24 Time Off, 9 hours or less (%) 52.94% 47.06% Average Award 8 hours 8 hours TABLE 45: TIME OFF AWARDS (9 HOURS OR LESS) BY GROUPING NH/ NH/ Al/A Al/A WM WF BM BF HM HF AM AF PI PI N N 2+M 2+F M F 20 18 4 2 0 1 2 2 0 0 1 0 0 1 39.22 35.29 7.84 % 3.92 % 0.00 % 1.96 % 3.92 % 3.92 0.00 % 0.00 1.96 % 0.00 % 0.00 % 1.96 % TABLE 46: TIME OFF AWARDS (OVER 9 HOURS) BY GENDER Male Female Time Off, over 9 hours (it) 54 73 Time Off, over 9 hours (%) 42.52% 57.48% Average Award 19.85 hours 21.26 hours 82 EEO PROGRAM STATUS REPORT FOR FY 2016 TABLE 47. TIME OFF AWARDS (OVER 9 HOURS) BY GROUPING WM WF BM BF HM HF AM AF NH/ NH/ PI PI MF Al/A Al/A N N MF 2+M 2+F 39 37 2 26 2 6 10 3 0 0 1 0 0 1 3071 29.13 °A 157 % 2047 157 % 472 % 7.87 % 2.36 °A BOO % 0.00 °A 0.79 % OBO % 0.00 % 079 % Summary of EEO plan objectives to eliminate barriers or correct deficiencies For its FY 2016 Plan update, CFPB has developed action plans to eliminate possible barriers in hiring as summarized below and set forth fully in Part I. CFPB will continue to analyze hiring processes to reveal and eliminate impediments to certain minority applicants proceeding further in the application process. Recruiting, hiring, and retaining diverse employees should also help to improve the participation of minorities. (See also Part I-1 for more detail.) 83 EEO PROGRAM STATUS REPORT FOR FY 2016 8. Certification of establishment of continuing equal employment opportunity programs Stuart Ishimaru, Director, Office of Equal Opportunity and Fairness, along with M. Stacey Bach, Director of the Office of Civil Rights, are Principal EEO Officials for the Consumer Financial Protection Bureau. The Agency has conducted an annual self-assessment of Section 717 and Section 501 programs against the essential elements as prescribed by EEO MD-715. If an essential element was not fully compliant with the standards of EEO MD-715, a further evaluation was conducted and, as appropriate, EEO Plans for Attaining the Essential Elements of a Model E150 Program are included with this Federal Agency Annual EEO Program Status Report. The Agency has also analyzed its workforce profiles and conducted barrier analyses aimed at detecting whether any management or personnel policy, procedure, or practice is operating to disadvantage any group based on race, national origin, gender, or disability. EEO Plans to Eliminate Identified Barriers, as appropriate, are included with this Federal Agency Annual EEO Program Status Report. We certify that proper documentation of this assessment is in place and is being maintained for EEOC review upon request. Stuart Ishimaru Stuart Ishimaru Director of OEOF M. Stacey Bach M. Stacey Bach Director of OCR 84 EEO PROGRAM STATUS REPORT FOR FY 2016 Digitally signed by Stuart Mil/rani Date 2017.01.2? 16 5/ 48 -05O0 Date Digitally signed by M. Stacey Bach Date: 2017.01.2715:03:21 -0500' Date certify that this Federal Agency Annual EEO Program Status Report is in compliance with EEO MD-715. 12A-I40 Richard Cordray Director of CFPB 85 EEO PROGRAM STATUS REPORT FOR FY 2015 1/2617 Date 9. EEO program self-assessment checklist CFPB conducted the mandatory self-assessment of its EEO Program by completing the SelfAssessment Checklist. CFPB will retain the checklist and supporting documentation and data, and make it available upon request by the EEOC. 86 EEO PROGRAM STATUS REPORT FOR FY 2016 10. EEO plan for attaining the essential elements of a model EEO program TABLE 48. EEOC PART H-1 EEOC Form 715-01 Part H-1 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report Consumer Financial Protection Bureau FY 2016 Statement of model program essential element deficiency CFPB no longer views this as a deficiency. When this issue was first reported CFPB had not yet established official Special Emphasis Programs (SEP) (e.g., Federal Women's Program, Hispanic Employment Program, People with Disabilities Program Manager) or a Selective Placement Program (SPP). Objective Establish Special Emphasis Programs Responsible official OCR Director, OMWI Director, Chief Human Capital Officer Date objective initiated April 30, 2013 Target date for completion of objective N/A Planned activities toward completion of objective 87 The Bureau no longer views this as a deficiency. The Bureau included SEPs as a top action item in its agency-wide Diversity and Inclusion Strategic Plan adopted in FY 2016. Stakeholders will continue to implement this action item, in part by following up with the individuals who perform these functions within OHC, OMWI, OCR, and diversity councils to ensure that they fulfill these functions as envisioned in the EFOC's regulations. OCR also has onboarded a new FTE in FY 2017 who will assist with related duties. EEO PROGRAM STATUS REPORT FOR FY 2016 Report of accomplishments and modifications to objective The Bureau included "Supporting Special Emphasis Programs" as a top action item in its Diversity and Inclusion Strategic Plan developed in FY 2016 and finalized in early FY 2017. This Strategic Plan action time requires the Bureau to: "Support 5peth/ Emphasis Programs (SEPs)th rough resources such as Employee Resource Groups (ERGs), Diversity Council of Employees (DICE), and Culture Team (CT) and the Office of Civil Rights. Appoint collateral dutySEP Managers as advisors on hiring; retaining, and promoting a diverse workforce" by le]xplor[ing] innovative models for programs that can provide advice on hiring, retaining, and promoting a diverse workforce for specific groups." The Bureau currently has staff — primarily in OEOF and OHC, but also in other Bureau Divisions, including External Affairs and the Bureau's Director's Office of Strategy — that collectively serve the functions of Special Emphasis Program Managers, without that official title. These staff members serve as staff advisors, fact finders, and subject matter experts, and exist to identify the barriers that people in various communities (such as women, historically underrepresented groups, people with disabilities, and the LGBTQ+ community) may encounter when seeking employment and being hired or promoted in the Federal government. Together these individuals collaborate to educate leadership by developing programs, forums, recruitment, and retention and succession plans and by developing training programs. They further evaluate the effectiveness of programs, plans, and activities toward achieving the objectives of the EEO program. The following are some of the specific initiatives currently in place at the Bureau to advance the goals of Special Emphasis Programs. The Bureau has: • created a three-year diversity and inclusion strategic plan that outlined specific goals and strategies to increase diversity and support inclusion at the Bureau; • continued to use the Executive Advisory (Diversity and Inclusion) Council, a crossdivisional group of senior leaders working to strengthen and integrate diversity and inclusion into the Bureau's functioning by providing strategic guidance, advocacy and support for diversity and inclusion in the Bureau; • worked with each Division to develop and implement diversity and inclusion objectives in their Divisional strategic plans aimed at increasing the diversity among their staff, and 88 EEO PROGRAM STATUS REPORT FOR FY 2016 ensuring that the work environment is inclusive for all employees; provided a mandatory two-day training workshop on diversity and inclusion and a twoday training working on EEO compliance for all supervisors and managers to help them strengthen their skills in leading and managing a diverse and inclusive workforce; provided mandatory training for all non-supervisory employees to increase their awareness and understanding of the importance of diversity and inclusion and how it enhances the overall effectiveness of the Bureau; collaborated across Divisions to enhance supervisory and employee training offered to ensure that compliance, diversity and inclusion concepts are addressed, such as in the supervisory development sessions, leadership effectiveness seminars, and structured interview training; presented a seminar to managers on identifying and utilizing effective strategies for mitigating unconscious bias and ensuring compliance with civil rights mandates in performance evaluations; • worked to establish and maintain relationships with, and outreach to, professional organizations that represent Veterans, Disabled Veterans, individuals with disabilities generally, Hispanics, LGBTQ+ individuals, and other minority constituencies (including by attending career fairs and professional association meetings throughout the year to meet and provide information on CFPB, and on employment opportunities to these groups, including posting vacancies on bulletin boards geared to these groups of professionals); established, and launched, the inaugural term of Diversity and Inclusion Council of Employees (DICE), whose members represent employees from throughout the Bureau, from both the Headquarters and the Regional offices; adopted and began to implement an Employee Resource Group policy to serve as a guide to employees who want to form interest-based groups to assist the Bureau in understanding and considering various perspectives in our service to the diverse spectrum of consumers, and to serve as a vehicle to assist in networking, recruiting and retaining a diverse workforce; • 89 analyzed the Annual Employee Survey (AES) results to assess employee perceptions of EEO PROGRAM STATUS REPORT FOR FY 2016 the Bureau across demographic groups and to use the Inclusion Quotient, included in the AES in planning to help all employees feel included in the Bureau. developed and delivered programs and activities for the various special observance months throughout the year, which have been very well-received. The Bureau will continue to monitor this issue to ensure that the functions of the Special Emphasis Program are being fulfilled, and will re-analyze the efficiency of this collaborative effort on a continuing basis to determine whether there are more effective alternatives that should be explored, including using or dedicating existing or new personnel to SEP efforts. TABLE 49: EEOC PART H-2 EEOC Form 715-01 Part H-2 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report Consumer Financial Protection Bureau FY 2016 Statement of model program essential element deficiency CFPB no longer views this as a deficiency. When this issue was first reported, CFPB had not yet established timetables or schedules to review its Employee Awards and Recognition Program and Procedures for systemic barriers that may be impeding full participation in the program by all groups. Objective CFPB will implement its Employee Awards and Recognition Program and Procedures. Responsible official OHC Director Date objective initiated FY 2014 Target date for completion of objective N/A A new Awards and Recognition Article to the Bureau's Collective Bargaining Agreement was negotiated and adopted in FY 2016 for FY 2016. The Article was implemented in FY 2016. Rollout of the program included training on recognizing Planned activities toward completion of objective the potential for and preventing unconscious bias to affect awards. A variety of analyses were performed as described below. No barriers were identified. NTEU and Bureau management will negotiate the Awards and Recognition program for 2017 and beyond as part of current 90 EEO PROGRAM STATUS REPORT FOR FY 2016 EEOC Form 715-01 Part H-2 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report term contract negotiations. CFPB will continue to conduct annual statistical analysis for each subsequent program year and will work with Division and Office leaders to identify potential award distribution inequities and identify corrective action as needed. Report of accomplishments and modifications to objectives CFPB has been working since FY 2014 on implementation of an official Awards and Recognition policy. In FY 2016, NTEU and the Bureau negotiated and reached agreement on an Awards and Recognition Program for the remainder of 2016. The Article was implemented in FY 2016. Before implementation, the Bureau ensured appropriate efforts were in place to assess the potential effect of the awards by demographic group and protected status. During the program rollout for FY 2016, OHC trained all Bureau officials responsible for implementing the program on how to recognize and prevent unconscious bias in awards. The information found in Tables 42-47 of this Report reflects only a subset of program data. The program year for CFPB's awards program spans fiscal years. The tables reflect only two (2) out of five (5) award types, as these were the only awards paid by CFPB by September 30, 2016. These tables do not reflect insights into the effects of combining time-off awards with monetary awards; an important program feature. Therefore this data set alone does not constitute a whole or sufficient basis for meaningful analysis. However, as of December 2016, CFPB had conducted a thorough statistical analysis of the full implementation of 4 out of 5 award types — Spot Awards, Time-Off Awards, Team Achievement Awards, and Superior Achievement Awards. (The 5th award type is currently being designed and planned for implementation in calendar year 2017.) The statistical analysis considered monetary award distribution by race/ethnicity; gender; age; supervisor status; bargaining unit status; grade; and veteran status. CFPB examined this data for triggers by reviewing participation comparisons for groups that were of sufficient sample size; male/female; white/all other races and national origin; and under 40 years of age/40 years of age and over. CFPB considered both the quantity of awards and the monetary value of awards and found no triggers requiring additional analysis. That said, in a desire for comprehensive review, the Bureau 91 EEO PROGRAM STATUS REPORT FOR FY 2016 examined other program elements, compared to benchmarks, and also conducted "lessons learned" meetings with key program stakeholders. CFPB concluded that oversight procedures put in place for the program (including training) represent strenuous safeguards against bias or unfairness in program implementation. The Bureau has found no barriers to participation in the Awards program. These findings were shared with senior leaders of each Division and the OCR and OMWI office leaders. OHC has shared appropriate award analysis data with Division and Office leaders. A briefing of NTEU is pending scheduling in early calendar 2017. NTEU and Bureau management will negotiate the Awards and Recognition program for 2017 and beyond as part of current term contract negotiations. Adjustments to the program will be made if/as any potential disparities by demographic group or other protected status is identified. OHC will conduct similar analysis after the conclusion of each program year (each of which will span two fiscal years) and revisit its review of policy, procedure, and practices. OHC will continue to work with Division and Office leaders to ensure fair award distributions and identify and implement corrective action as needed. CFPB will strive to conduct a triennial program evaluation, looking back across 2016, 2017, and 2018, programs (ending in 2019), including measures of customer satisfaction and program compliance, pending budget and resources in 2020. TABLE 50: EEOC PART H-3 EEOC Form 715-01 Part H-3 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report Consumer Financial Protection Bureau FY 2016 Statement of model program essential element deficiency Data for certain required workforce profile tables (specifically Tables All and Al2) needs to be collected, analyzed, and integrated into barrier analyses and submissions for annual MD-715 reporting. Objective CFPB will take all steps necessary to gather relevant data for barrier analysis and reporting purposes. Responsible official OCR Director, OHC Director Date objective initiative FY 2016 92 EEO PROGRAM STATUS REPORT FOR FY 2016 EEOC Form 715-01 Part H-3 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report Target date for completion of objective September 30, 2017 Planned activities toward completion of objective CFPB has worked with the Departmental the Treasury/Bureau of the Fiscal Service to ensure that all required data is collected. CFPB will be analyzing all relevant data to identify triggers and potential barriers. Report of accomplishments and modifications to objectives The EEOC in a technical assistance letter dated June 24, 2016, noted that CFPB had not yet begun collecting all data necessary for performing certain trigger and barrier analysis. The EEOC noted that CFPB did not collect data tables All and Al2, which contain applicant flow data for senior level position (SLP) promotions and the SLP career development program because CFPB was not yet using USAJobs.gov for hiring executive-level positions. The EEOC also stated that data for tables All and Al2 would have shown the recruitment and selection of Black males and females for promotions and career development opportunities in the senior grade levels. Further, EEOC stated: Given that CFPB is a new agency that opened in July 2011 and its Office of Civil Rights opened in February 2013, we recognize that the agency will encounter some EEO program deficiencies during the development of its workforce and infrastructure. Accordingly, we will continue to provide assistance to CFPB during its efforts to correct any identified deficiencies. However, as we noted ... CFPB does not yet collect all of the workforce data, including all applicant flow data, which is necessary in order to conduct barrier analysis. In Part H of its next MD-715 report, we expect CFPB to show meaningful progress toward capturing all the required workforce data. We look forward to reviewing CFPB's progress in this area in future MD-715 reports. During FY 2016, the Bureau's Office of Human Capital (OHC) was able to produce most of the required MD-715 reports on applicants and existing employees. However, a notable amount of time was spent manually compiling data required to produce some of the MD-715 tables, specifically those representing applicant data. Pre-configured reports are available in the systems of record that house the Bureau's applicant data and employee data. The Department of the Treasury (Bureau of the Fiscal Service), CFPB's 93 EEO PROGRAM STATUS REPORT FOR FY 2016 shared service provider, offers the MD-715 reports through Workforce Analytics and Monster Analytics for employee and applicant data, respectively. There were five sets of MD-715 FY 2015 reports representing applicant data and one MD-715 FY 2015 report representing workforce data that were either not available or required manual adjustments. 87, A11/1311, Al2/612, and A10. The All & B11 (Internal Selections for Senior Level Positions — GS-13, 14,15 & SES) reports were not provided for FY 2015 as internal selections could not be tracked through Monster Analytics. As a follow-up, OHC worked with Treasury to have an indicator turned on at the USAJobs level to designate merit promotions for CFPB-only positions. This will identify those announcements from March 2016— September 2016. OHC also manually identified CFPB-only announcements from October 2015— March 2016 for FY 2016 reporting. This helped ensure that OHC could provide these reports for FY 2016. FY 2017 reporting will be available through the pre-configured reports in Monster Analytics. The Al2 & B12 (Participation in Career Development) reports were not provided for FY 2015 or FY 2016. OHC was not able to report on that data as the Bureau does not have any career development programs at this time. The B7 (Applicants and Hires for Major Occupations) report was manually created for FY 2016 reporting to only include CFPB's four mission-critical occupations, filtering by occupational series. Monster Analytics did not allow the filtering in the pre-configured report by occupational series. There was one MD-715 FY 2015 report containing data on existing employees that required manual adjustments: A10. The A10 (Non-competitive promotions — Time in Grade) report for existing employees was fixed for FY 2016 reporting. OHC identified an error in the pre-configured report available from the shared service provider, which has been addressed. 94 EEO PROGRAM STATUS REPORT FOR FY 2016 11. EEO plan to eliminate identified barriers TABLE 51• EEOC PART I-1 EEOC Form 715-01 Part 1-1 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report Consumer Financial Protection Bureau FY 2016 During FY 2015 and again in FY 2016, several ethnic and racial groups increased their workforce participation at a rate slower than CFPB's total workforce. Additionally, several ethnic and racial groups had participation rates lower than their respective relevant Civilian Labor Force ("CLF") rates. Statement of condition that was a trigger for a potential barrier: Provide a brief narrative describing the condition at issue. How was the condition recognized as a potential barrier? A review of workforce data tables revealed that in FY 2015, Hispanic Females, White Males, Asian Males and Females, Native Hawaiian/Other Pacific Islander Males and Females, and Two or More Race Males and Females had slower rates of increase than CFPB's total workforce. Data also revealed that in FY 2015, Females, Hispanic Males and Females, White Males and Females, Native Hawaiian/Other Pacific Islander Males, and American Indian/Alaska Native Males and Females had participation rates lower than their respective CLF rates. In FY 2016, a review of workforce data tables revealed that White Males and Females. Hispanic Males and Females, Native Hawaiian/Other Pacific Islander Males. American Indian/Alaska Native Males and Females and Males of two or more races had participation rates lower than the CLF rates. American Indian/Alaska Native Males and Females and Males Barrier analysis: of two or more races had a net change lower than the net change for the total workforce. CFPB analyzed Tables Al and BI (Workforce) to compare the Provide a description of the steps taken and data analyzed to determine cause rates of increase for CFPB's workforce and each demographic group comprising the workforce. Additionally, CFPB 95 EEO PROGRAM STATUS REPORT FOR FY 2016 EEOC Form 715-01 Part 1-1 of the condition. U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report compared each group's workforce participation rate to its corresponding CLF rate. In FY 2015. CFPB also did an internal audit of its hiring process for approximately 60% of the Bureau workforce (excluding Attorneys and Executives) using applicant flow data available from USAJobs. Statement of identified barrier: Provide a succinct statement of the agency policy, procedure or practice that has been determined to be the No barrier has been identified to date. Although CFPB complies with legal requirements related to hiring, some hiring procedures could be enhanced to further promote fairness in the hiring process. barrier of the undesired condition. OCR, OMWI, and OHC are currently working together to better understand and appropriately address, as necessary, Objective: State the alternative or revised agency policy, procedure or practice to be implemented to correct the undesired condition. the data results, and will apprise EEOC of progress. In the interim. the Bureau has implemented "blinding" of resume/application data for certain positions at either the "minimum qualification" or "2nd hurdle assessment" phases of the hiring process. CFPB will evaluate the impact of this new practice at an appropriate time when sufficient data is available to allow meaningful analysis and conclusions. Responsible official: OCR, OMWI, OHC Date objective initiated: December 2015 Target date for completion of objective: September 30, 2017 Planned activities toward completion of objective: OCR, OMWI, and OHC presented suggestions to the EAC on recommended changes to the hiring process. January through December 2016 OCR, OMWI, and OHC will present recommendations to the Executive Committee and to the CFPB Director. May 2017 CFPB will begin to implement approved recommendations to the hiring process on a short-term, mid-term, and longterm basis. CFPB will re-analyze applicant flow data to determine if any implemented May 2017 January 2018 changes have had a positive impact on 96 EEO PROGRAM STATUS REPORT FOR FY 2016 EEOC Form 715-01 Part 1-1 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report the hiring process. Report of accomplishments and modifications to objective After conducting the data analysis, OCR, OMWI, and OHC collaborated to conduct best practice research, reinforce use of existing practices and tools that promote equity and fairness, and identify additional hiring process improvements that could be taken. OHC has already begun considering options and implementing changes using tools it already has at its disposal that did not require the implementation of new policies, including: enhancing structured interview, phone screening, and reference check tracking and guides; creating a standardized structured interview question database, including standard DM competency questions; creating a library of standardized benchmarks used to evaluate qualifications based on CFPB's competency model (which has gone through an extensive multi-year validation process);and creating new tools and resources to help applicants better understand the hiring process and how to navigate it. Relatedly, in its June 24, 2016, technical assistance letter, the EEOC"request[ed] that CFPB provide an update on its use of a blind selection process for SLS vacancies, which EEOC considers a best practice." CFPB is now "blinding" resume/application data for certain positions at either the "minimum qualification" or "2nd hurdle assessment" phase of the hiring process. The minimum qualifications and 2nd hurdle assessment process are completed before a "final certificate" is issued to a hiring manager. For positions to which this technique applies, standard operating procedures now require that data that could potentially identify a specific individual (including applicant name, address, SSN, email address, phone number, disability information, and Veterans status) be redacted from resumes and other application materials. An applicant number (received from the Bureau's Career Connector system) replaces this information on applicant documents. The process is completed by authorized personnel who have been trained on appropriate redaction techniques. Acceptable redaction techniques include manual redaction (black redaction on the physical document) and/or electronic redaction using an approved redaction technology system. OHC HR specialists conduct a spot check review prior to providing the documents to the relevant subject matter experts performing the minimum qualification reviews and 2nd hurdle assessments. 97 EEO PROGRAM STATUS REPORT FOR FY 2016 CFPB will evaluate the impact of this new practice at an appropriate time when sufficient data is available to allow meaningful analysis and conclusions. After getting feedback from Bureau leadership, OCR, OMWI, and OHC will develop additional recommendations to the Director for approval. After measures are in place and used for a period of time where data can be gathered that is sufficient for meaningful analysis, the Bureau will again conduct a follow-up applicant flow analysis to assess the impact of these measures on the hiring process. TABLE 52. EEOC PART 1-2 EEOC Form 715-01 Part 1-2 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report Consumer Financial Protection Bureau FY 2016 Statement of condition that was a trigger for a potential barrier: Provide a brief narrative describing the condition at issue. How was the condition recognized as a potential barrier? Barrier analysis: Provide a description of the steps taken and data analyzed to determine cause of the condition. 98 During FY 2016, Individuals with Targeted Disabilities ("IWTD) participated in CFPB's workforce at a rate lower than the Federal goal of 2%. However, from FY2015 to FY2016 CFPB's total workforce increased, as did the number of IWTD in the total workforce — and at a rate much higher than the rate of increase of the workforce (7.31% for the total workforce v. 46.15% for IWTD). A review of workforce data tables revealed that there were 19 IWTDs (1.16%) during FY2016 and 13 (.85%) IWTDs during FY2015. When only the permanent workforce is analyzed, the rate of IWTD in FY 2016 is still 19 individuals, or 1.27%. In FY 2016. no IWTD separated from the workforce. CFPB analyzed Table BI (Workforce) to compare the rates of increase for CFPB's workforce and IWTDs. CFPB also compared the rate of IWTDs to the 2% Federal goal. Additionally, CFPB analyzed Table B14 to compare IWTD rate of separation to their workforce participation. Critically, CFPB also completed and analyzed a trigger table provided by the EEOC to evaluate potential barriers for IWTD. (The completed table is available upon request.) A review of this trigger table revealed that in the CFPB's permanent workforce, the percentage of IWTD was lower than the percentage of individuals without targeted disabilities in the following categories: (1) supervisors and managers at the EEO PROGRAM STATUS REPORT FOR FY 2016 EEOC Form 715-01 Part 1-2 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report CN-71 and above (GS-15 and above) and CN-53/60 (GS13/14); (2) CN-60 (GS-14) employees; (3) CN-71 (GS-15) employees; (4) Economists (0110); and (5) Examiners (0570). Lastly, CFPB reviewed CFPB's diversity recruitment initiatives to evaluate the Agency's efforts to identify qualified IWTDs. Statement of identified barrier: Provide a succinct statement of the agency policy, procedure or practice No barrier has been found at this time. that has been determined to be the barrier of the undesired condition. Objective: State the alternative or revised agency policy, procedure or practice to be implemented to correct the undesired condition. Increase efforts to collect data beyond statistics (such as anecdotal evidence, survey results, etc.) to determine if a barrier exists. Responsible official: OCR, OHC, OMWI Date objective initiated: January 2016 Target date for completion of objective: September 30, 2017 Planned activities toward completion of TARGET DATE objective: September 30, 2017 Develop and implement a plan for recruiting IWTDs Evaluate reasonable accommodation and training programs and create September 30, 2017 September 30, 2017 retention strategies for IWTDs Evaluate and implement relevant portions of the EEOC's new Section 501 regulations on affirmative action for September 30, 2017 individuals with disabilities and targeted disabilities. Report of accomplishments and modifications to objective The CFPB has proudly supported the efforts of Executive Order 13548 to increase the Federal employment of individuals with disabilities and is an equal opportunity employer in compliance with applicable federal law. To achieve the goals set forth in Executive Order 13548, the CFPB, 99 EEO PROGRAM STATUS REPORT FOR FY 2016 to the extent permitted by law, works to increase recruitment, hiring, and retention of individuals with disabilities in employment and other job-related programs. CFPB will continue and enhance these efforts in light of and in compliance with the EEOC's newly released Section 501 affirmative action regulations. In recognition of the Bureau's efforts in this area, in January 2016, CFPB was ranked amongst the "Top 20 Government Employers" in Careers & the disABLED Magazine amongst the agencies who provide a positive working environment for people with disabilities. In fact, CFPB was ranked as #13, and was the only federal financial regulatory agency (FIRREA agency) ranked on the list The CFPB supports federal employment of individuals with disabilities through the following strategic activities: • Outreach and Recruitment. The Bureau continues to establish and maintain relationships with, and outreach to, professional organizations that represent individuals with disabilities. Through attending various career fairs and through community outreach efforts, the Bureau encourages individuals with disabilities to apply under the Schedule A Hiring Authority to open positions at the CFPB. For example, the Bureau attended various recruitment events specifically focusing on individuals with targeted disabilities, including the Careers & the disABLED magazine Career Expo for people with disabilities on 11/13/2015. As discussed in greater detail below, hiring managers are informed that eligible and qualified Schedule A candidates can be quickly hired non-competitively using the Schedule A Hiring Authority. Along with the continued socialization of the advantages of the Schedule A Hiring Authority, the CFPB continues to explore how to best leverage the Workplace Recruitment Program (WRP) through the Department of Labor. The WRP is a recruitment and referral program that connects federal and private sector employers nationwide with highly motivated college students and recent graduates with disabilities who are eager to prove their abilities in the workplace through summer or permanent jobs. In FY2016, the CFPB leveraged applicant submissions under DOL's WRP and OPM's Bender list (as well as used Schedule A) to source candidates that represented individuals with disabilities in the workforce. Critically, the CFPB has drafted a policy and procedures related to standardizing how to best leverage the Schedule A Hiring authority to meet our disability hiring targets. 100 EEO PROGRAM STATUS REPORT FOR FY 2016 CFPB's Director, Richard Cordray, is also committed to targeting recruitment for individuals with disabilities. For example, in October 2015, the Director announced to all employees that the Bureau intends to work with the Federal Communications Commission to learn more about their initiative to increase the hiring of individuals with intellectual disabilities. The Bureau's Chief Human Capital Officer has already reached out to FCC about this potentially valuable partnership. Hiring The CFPB continues to actively hire a diverse pool of talent to carry out the Bureau's mission. The Bureau's ongoing goal is to increase the number of individuals with disabilities overall, and to increase the individuals with targeted disabilities to 2.0%, which is in line with the goals set forth in Executive Order 13548, the LEAD initiative started by former EEOC Vice Chair Chris Griffin, and EEOC's recently finalized rule under Section 501 of the Rehabilitation Act. In a technical assistance letter dated June 24, 2016, the Equal Employment Opportunity Commission stated: "We are pleased to note that in FY 2015, CFPB implemented a recruitment and outreach plan for individuals with targeted disability and it has established a goal of 2% to hire and retain individuals with targeted disability." While CFPB increased its number of individuals with disabilities and individuals with targeted disabilities during FY 2016, CFPB did not meet the goal of 2.0% for individuals with targeted disabilities. In FY 2016, individuals with targeted disabilities represented 1.16% of the total workforce (compared with 0.85% of the total workforce in FY 2015) in accordance with the coding that the EEOC uses for targeted disabilities. Further, 8.75% of the workforce voluntarily identified as having a disability as of the end of FY 2016 (compared with 8.68% as of the end of FY 2015). Additionally, in FY 2016, 2.27% of new permanent hires had targeted disabilities (5 individuals), and 8.70% of new permanent hires voluntarily identified as having a disability (16 individuals). The Bureau has not specifically set aside any positions in any fiscal year for Schedule A appointments; however, hiring managers are encouraged by OHC, OCR, and OMWI to consider and use the Schedule A hiring authority to fill vacancies. As noted in greater detail below, the Bureau circulates communications to hiring managers to highlight Schedule A appointments as a valuable hiring resource. In addition, during the State of the Agency briefing for the MD-715 FY15 report, the Director of OCR provided the Executive Committee (i.e., senior leadership including the Director, Deputy Director, all Associates Directors, the Chief of Staff, and the Deputy Chief of Staff) with materials 101 EEO PROGRAM STATUS REPORT FOR FY 2016 related to Schedule A including The ASCs of Schedule A for the Hiring Manager, a list of targeted disabilities, information on how to access the relevant intranet content, and a point of contact in OHC to provide assistance to their management teams. Further, the Bureau has robust recruitment activities to recruit disabled veterans, which should help the Bureau achieve its overall goal to have 2.0% of its workforce be individuals with targeted disabilities. All Schedule A appointees at the Bureau who have worked two years or more have been converted to the competitive service. Hiring managers are encouraged by OHC, OCR, and OMWI to consider and use the Schedule A hiring authority to fill vacancies. The Equal Employment Opportunity Commission, in a technical assistance letter dated June 24, 2016, stated: We are pleased to note that CFPB stated in its response to our RFI that the agency regularly converts its Schedule A appointees to competitive status after two years of satisfactory performance. We urge CFPB to continue to ensure that its Schedule A employees are timely converted to the competitive service." Retention. Training and mentoring is important in the career development and retention of current employees with targeted disabilities; CFPB launched a pilot mentoring bank program in FY 2015 that was successful and could be expanded in the future. • Internal Communications & Education. Schedule A training for all recruitment officials is readily available and taken. OHC, OCR, and OMWI personnel are knowledgeable about this flexibility. A recruitment toolkit for recruiting ambassadors outside of OHC, OCR, and OMWI is available on the intranet and a PowerPoint presentation is provided to recruiters. The guide advises that before any recruiting event, the recruiters must understand the federal hiring rules, including special hiring authorities. Information about the Schedule A hiring authority for people with disabilities is included and always readily available to recruiters in the following resources: 0 Recruiting Ambassadors Toolkit that is available to all on the intranet; • Federal Hiring Authorities page that is available to all on the intranet; O CFPB's Hiring, Promotion, and Internal Personnel Movements Policy; O CFPB Hiring Manager's Guide that is available to all managers on the intranet; and O As tand-alone intranet page explaining the Schedule A hiring authority, which 102 EEO PROGRAM STATUS REPORT FOR FY 2016 contains links to information about the Schedule A authority from EEOC, the Office of Personnel Management (OPM), and the Office of Disability Employment Policy (ODEP) at the Department of Labor. Additional information is periodically circulated as reminders that the Schedule A hiring authority is available and managers — who also may serve as recruiters — are encouraged to use it as a tool that can both enhance the diversity of the CFPB workforce and speed the hiring process. For example, the Schedule A flexibility was highlighted in the October 7,2015, edition of the Bureau's communications vehicle targeted at supervisors (the "Manager Minute"). Further, management officials and recruitment officials also have other frequent training and educational opportunities on numerous disability-related employment topics, including Schedule A. For example, in October 2015, for National Disability Employment Awareness Month, the Bureau circulated disability etiquette tips to all employees, and a video to help dispel employment myths related to persons with disabilities. Each year (including in FY 2016), the Bureau also sends out notices via electronic newsletters and on employee paystubs about important disability-related programs and milestones (including reminders about the anniversaries of the passage of the Rehabilitation Act of 1973 and the Americans with Disabilities Act). In early November 2015, also in celebration of National Employment Awareness Disability Month, OCR coordinated a panel discussion (moderated by the Director of OCR) comprising employees with disabilities sharing their stories, and highlighted Schedule A hiring flexibility. Finally, OCR is exploring the possibility of implementing an annual mandatory 8-hour EEO refresher curriculum for supervisors and managers, which would include training options on Schedule A and other disability topics. (All managers must complete 16hours of initial EEO training, which is offered through the EEOC Training Institute, and have numerous other opportunities for additional learning.) Cross-Divisional Collaboration. The Bureau's OCR has convened a working group of various internal champions for disability-related issues. This forum allows persons to raise issues, share information, and brainstorm strategies to create positive change at CFPB. The purpose of the group is to set priorities for safeguarding and promoting the rights of applicants, employees, contractors, and consumers with disabilities in all Bureau activities. The group is exploring better ways to recruit and retain workers with 103 EEO PROGRAM STATUS REPORT FOR FY 2016 disabilities, enhance reasonable-accommodations provided to workers and consumers who contact the Bureau with financial complaints, educate managers and supervisors on disability topics, including Schedule A, and enhance data collection efforts (among other priorities). The steering and working groups consist of thought leaders from major CFPB segments, including OCR, OMWI, OHC, the CFPB Ombudsman's Office?,the Bureau's Office of Consumer Response, the Legal Division, and others. Members include experts on the employment provisions of the Americans with Disabilities Act and Section 501 of the Rehabilitation Act, on Sections 504 and 508 of the Rehabilitation Act, and on recruitment, retention, and compensation policy issues. • Resources. A Disability Program Manager (DPM) could assist in the above efforts, and the Bureau intends to hire a DPM as feasible. In the meantime, CFPB will work to leverage existing resources to further disability hiring and retention efforts. TABLE 53. EEOC PART 1-3 EEOC Form 715-01 Part 1-3 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report Consumer Financial Protection Bureau FY 2016 Statement of condition that was a trigger for a potential barrier: that various demographic groups participated in Major Occupations 0301 (Misc. Administration), 0570 (Examiner), 0110 (Economist), and 0905 (Attorney) at rates lower than their CLF rates. During FY 2015 and again during FY 2016, analysis revealed Provide a brief narrative describing the condition at issue. How was the condition recognized as a potential barrier? A review of workforce data tables revealed that as of the end of FY 2016. the following groups participated at rates lower than their CLF rates in Major Occupation 0301: Females, White Females, Hispanic Males and Females, American Indian/Alaska Native Females, and Males of two or more races. 27 The CFPB Ombudsman's Office is an independent, impartial, and confidential resource and, as such, is an ex officio member of this group. 104 EEO PROGRAM STATUS REPORT FOR FY 2016 EEOC Form 715-01 Part 1-3 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report The following groups participated at rates lower than their CLF rates in Major Occupation 0570: Females. White Males and Females, Black Females, Hispanic Females, Asian Females, American Indian/Alaska Native Females, and Males of two or more races. The following groups participated at rates lower than their CLF rates in Major Occupation 0110: Females. White Males, Hispanic Females, Asian Males, Native Hawaiian/Other Pacific Islander Females, American Indian/Alaska Native Males and Females, and Males of two or more races. Lastly, White Males and Hispanic Males participated at rates lower than their CLF rates in Major Occupation 0905. Barrier analysis: Provide a description of the steps taken and data analyzed to determine cause of the condition. Statement of identified barrier: Provide a succinct statement of the agency policy, procedure or practice that has been determined to be the barrier of the undesired condition. Objective: State the alternative or revised agency policy, procedure or practice to be implemented to correct the undesired condition. CFPB analyzed Tables A6 and 136 (Major Occupations) to compare each demographic group's participation in each of CFPB's Major Occupations to their respective CLF rates. CFPB also reviewed Tables A7 & B7 (Applicants and Hires for Major Occupations) to analyze the number of qualified applicants for the agency's Major Occupation identified for each group. No barrier has been identified to date. We will continue to analyze the data and conduct additional in depth analyses into other gathered information to identify whether a barrier exists. This analysis will include review of whether hiring processes discussed in Part 1-1 also affect these participation rates. CFPB will continue to monitor the participation rates for the identified groups. CFPB will also review its recruitment and retention programs to increase representation of the relevant groups. Responsible official: OCR, OMWI, OHC Date objective initiated: December 2015 Target date for completion of objective: September 30, 2017 Planned activities toward completion of objective: TARGET DATE (Must be specific) 105 EEO PROGRAM STATUS REPORT FOR FY 2016 EEOC Form 715-01 Part 1-3 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report CFPB will conduct additional review of the job description, qualification criteria. and hiring practices to ensure selection requirements and procedures are job related and consistent with business necessity. CFPB will continue to analyze applicant data and monitor applicant rates, qualification rates, and selection rates. CFPB will review the selection process regularly to ensure equal treatment. OEOF will be consulted on selection panel participants. CFPB will continue its targeted outreach efforts. September 30, 2017 September 30, 2017 September 30, 2017 September 30, 2017 September 30. 2017 Report of accomplishments and modifications to objective See Part I-1 for an in-depth description of the Bureau's plan to review its hiring process, which may or may not have an impact on this issue. TABLE 54: EEOC PART 1-4 EEOC Form 715-01 Part 1-4 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report Consumer Financial Protection Bureau FY 2016 Statement of condition that was a trigger for a potential barrier: Provide a brief narrative describing the condition at issue. How was the condition recognized as a potential barrier? 106 During FY 2015 and again during FY 2016, various demographic groups participated in senior level positions and Pay Bands 53 to 71 (GS-13 to GS-15 equivalent at CFPB) at rates lower than their participation in CFPB's workforce. A review of workforce data tables revealed that as of the end of FY 2016, White Females, Black Males and Females, Hispanic Males and Females, Asian Males and Females, Native Hawaiian/Other Pacific Islander Males and Females, American Indian/Alaska Native Males and Females, and Males and Females of two or more races participated in one or more of the Pay Bands CN-53 to CN-71 at rates lower than their participation in CFPB's workforce. Similarly, as of the EEO PROGRAM STATUS REPORT FOR FY 2016 EEOC Form 715-01 Part 1-4 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report end of FY 2016, White Males, Black Males and Females, Hispanic Females, Asian Females, Native Hawaiian/Other Pacific Islander Males and Females, American Indian/Alaska Native Males and Females, and Males and Females of two or more races participated in Executive positions at rates lower than their participation in CFPB's total workforce. CFPB analyzed A4-1, A4-2, B4-1 and B4-2 (Grade Level Distributions) to compare each group's participation in high level grade levels to their respective participation in CFPB's workforce. Barrier analysis: Provide a description of the steps taken and data analyzed to determine cause of the condition. The analysis conducted to date has not identified a cause for the potential barrier. The Bureau will continue to analyze that and other data and additional in depth analyses into other gathered information to identify whether a barrier exists. This analysis will include review of whether hiring processes discussed in Part 1-1 also affect these participation rates. CFPB has hired an expert consultant to assist with this barrier analysis and with implementation of recommendations provided by the EEOC in June 2016 on this issue. Due to procurement delays, work by the contractor and the Bureau on this barrier analysis did not begin until December 2016. CFPB will keep EEOC informed on progress of these efforts. Statement of identified barrier: Provide a succinct statement of the agency policy, procedure or practice that has been determined to be the barrier of the undesired condition. Objective: State the alternative or revised agency policy, procedure or practice to be implemented to correct the undesired condition. Analysis has not yet revealed any discriminatory policies, practices, or procedures that have created a barrier. CFPB will continue to monitor and examine its employment and promotion policies or procedures to determine whether any barriers to demographic groups — particularly African Americans males and females — exist. Responsible official: OCR, OMWI, OHC Date objective initiated: December 2015 Target date for completion of objective September 30, 2017 107 EEO PROGRAM STATUS REPORT FOR FY 2016 EEOC Form 715-01 Part 1-4 U.S. Equal Employment Opportunity Commission Federal Agency Annual EEO Program Status Report Planned activities toward completion of TARGET DATE objective: (Must be specific) CFPB will continue to examine its promotion practices and address any September 30, 2017 problematic observations. CFPB will review surveys to assess whether any information contained in the results could help explain the cause September 30. 2017 of the low participation among certain groups in higher-banded positions. Report of accomplishments and modifications to objective In its FY 2015 Program Status (MD-715) report, the Bureau identified underrepresentation of various demographic groups in Senior Level Positions. During FY 2016, the Equal Employment Opportunity Commission provided technical assistance to the CFPB in evaluating possible related barriers to the advancement of Black males and females specifically. Specifically, in a technical assistance letter dated June 24, 2016, the EEOC recommended that the Bureau: look for possible connections between the triggers in its workforce statistics and any policies, procedures, or practices that might be causing those discrepancies. In particular, we suggest that CFPB implement the following planned activities: (1) identify the typical background and experience of individuals selected to the SLP and other senior pay positions; (2) review the qualifications of Black males and females seeking career advancement; (3) examine the recruitment of Black males and females into the senior grade levels and management positions; (4) investigate every phase of the merit promotion process for the senior grade positions; (5) interview employees from the human resources office about their screening process; (6) meet with members of the interview panel about their process of identifying best-qualified applicants and their interview questions; ( 7) compare the qualifications of Black male and female applicants to the selectees' qualifications; (8) review the various voting stages for disapproval of Black males and female candidates; (9) conduct a longitudinal review of applicant flow statistics found in tables A7, A9, and All; (10) review the participation of Black males and females by grade level in the occupations with upward mobility; and (11) meet with selecting officials to examine their experiences in the hiring 108 EEO PROGRAM STATUS REPORT FOR FY 2016 process and to discuss their perception of Black candidates. The Bureau procured an expert consultant to help it carry out these recommendations. Due to procurement delays, CFPB did not begin working with the consultant until December 2016. However, CFPB will update the EEOC on its progress. See Part I-1 for an in-depth description of the Bureau's plan to review its hiring process, which may or may not have an impact on this issue. 109 EEO PROGRAM STATUS REPORT FOR FY 2016 12. Special program plan for the recruitment, hiring, and advancement of individuals with targeted disabilities TABLE 55 EEOC FORM 715-01 PART J, SPECIAL PROGRAM PLAN FOR THE RECRUITMENT, HIRING, AND ADVANCEMENT OF INDIVIDUALS WITH TARGETED DISABILITIES — PART I DEPARTMENT OR AGENCY INFORMATION Agency and Subcomponent Labels Agency and Subcomponent Information 1. Agency 1 Consumer Financial Protection Bureau 1.a. 2nd Level Component 1.a. Not applicable 1.b. 3rd Level or lower 1.b. Not applicable TABLE 56: Total Work Force Reportable Disability 110 EEOC FORM 715-01 PART J, SPECIAL PROGRAM PLAN FOR THE RECRUITMENT, HIRING, AND ADVANCEMENT OF INDIVIDUALS WITH TARGETED DISABILITIES — PART II EMPLOYMENT TREND AND SPECIAL RECRUITMENT FOR INDIVIDUALS WITH TARGETED DISABILITIES Beginning Beginning End of FY End of FY of FY 2016 of FY 2016 2016 2016 1,533 100.00% 1,645 133 8.68% 144 EEO PROGRAM STATUS REPORT FOR FY 2016 Net change Rate of change 100.00% 112 7.31% 8.75% 11 8.27% Targeted Disability28 Beginning Beginning End of FY End of FY of FY 2016 of FY 2016 2016 2016 13 0.85% 19 1.16% Net change Rate of change 6 46.15% TABLE 57. NUMBER OF APPLICANTS AND SELECTIONS OF PERSONS WITH TARGETED DISABILITIES Targeted Disability Applicant and Selection Labels I. Total Number of Applications Received From Targeted Disability Applicant And Selection Data for CFPB 81 Persons With Targeted Disabilities during the reporting period. 2. Total Number of Selections of Individuals with 0 Targeted Disabilities during the reporting period. TABLE 58 EEOC FORM 715-01 PART J, PART III PARTICIPATION RATES IN AGENCY EMPLOYMENT PROGRAMS Other Employment/Pers onnel Programs Total Report Reporta Targete Targete Not able ble d d Identtli Disabil Disabilit Disabili Disabili ed ity # y% ty # ty % # 91 3 3.30% 1 1.10% 67 3. Competitive Promotions 4. Non-Competitive 341 Promotions 5. Employee Career N/A Development Programs N/A 5.a. CN 31-52 (GS 5-12 equivalent) 5.b. CN 53-60 (GS N/A 13-14 equivalent) N/A 5.c. CN 71-90 (GS 15/SES equivalent) 6. Employee 488 Not No No !dentin Disabili Disabili ed ty ty 73.63% 21 23,08% 35 10,26% 1 0.29% 9 2.64% 297 87,10% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 45 9.22% 6 1.23% 6 1.23% 437 89.55% If the rate of change for persons with targeted disabilities is not equal to or greater than the rate of change for the total workforce, a barrier analysis should be conducted (see below). 28 111 EEO PROGRAM STATUS REPORT FOR FY 2016 Other Employment/Pers onnel Programs Recognition and Awards29 6.a. Time-Off Awards (Total hrs awarded) 6.b. Cash Awards (total $$$ awarded) 6.c. Quality-Step Increase Total Report Reporta Targete Targete Not able ble d d Identifi Disabil Disabilit Disabili Disabili ed ity# y% ty # ty % # Not Identif i ed No No Disabili Disabili ty ty 3,064 248 hours hours 8.09% 56 hours 1.83% 24 hours 0.78% 2,792 hours 91.12% $132, $12,40 475 0 N/A N/A 9.36% $1,600 1.21% $2,000 1.51% N/A N/A N/A N/A N/A $118,07 89.13% 5 N/A N/A EEOC Form 715-01 Part J Part IV Identification and Elimination of Barriers Agencies with 1,000 or more permanent employees MUST conduct a barrier analysis to address any barriers to increasing employment opportunities for employees and applicants with targeted disabilities using FORM 715-01 PART!. Agencies should review their recruitment, hiring, career development, promotion, and retention of individuals with targeted disabilities in order to determine whether there are any barriers. See Part 1-2, which contains this barrier analysis. EEOC Form 715-01 Part J, Part V Goals for Targeted Disabilities Agencies with 1,000 or more permanent employees are to use the space provided below to describe the strategies and activities that will be undertaken during the coming fiscal year to maintain a special recruitment program for individuals with targeted disabilities and to establish specific goals for the employment and advancement of such individuals. For these purposes, targeted disabilities may be considered as a group. Agency goals should be set and accomplished in such a manner as will effect measurable progress from the preceding fiscal year. Agencies are encouraged to set a goal for the hiring of individuals with targeted disabilities that is at least as high as the anticipated losses from this group during the next reporting period, 29 Employees may be recognized with a time-off award, cash award, or a combination. The time-off awards were processed with an 846 nature of action code and the cash awards were processed with an 887 nature of action code. 112 EEO PROGRAM STATUS REPORT FOR FY 2016 with the objective of avoiding a decrease in the total participation rate of employees with disabilities. Goals, objectives and strategies described below should focus on internal as well as external sources of candidates and include discussions of activities undertaken to identify individuals with targeted disabilities who can be (1) hired; (2) placed in such a way as to improve possibilities for career development; and (3) advanced to a position at a higher level or with greater potential than the position currently occupied. TABLE 59. GOAL FOR TARGETED DISABILITIES Goal CFPB adopts the federal government target goal of 2% In CFPR's most recent MD-715 annual report, the Agency had a goal to reach 2.0% representation by persons with targeted disabilities within the total workforce by the end of FY 2016. CFPB is recommitting to achievement of this goal (consistent with the EEOC's new Section 501 affirmative action regulations) and will continue to take steps to educate hiring managers about Schedule A flexibilities for onboarding persons with disabilities. Objectives During FY 2016, persons with targeted disabilities represented 1.16% of the total workforce. The Agency hired 304 new hires into the workforce, five of whom have a targeted disability (1.64% of all new hires), 19 of whom have a disability (6.26% of all new hires) and 280 without a disability (92.11% of all new hires). We note that 1.64% of new hires did not identify whether or not they have a disability. Of the permanent hires made, 2.72% had a targeted disability (5 out of 184 permanent new hires). Strategies Accomplishments 113 Strategies for obtaining the 2% goal are outlined in EEOC Form 715-01 Part 1-2, and will be enhanced and augmented per guidance from the EEOC on implementation of the new Section 501 affirmative action regulations. Accomplishments are outlined in EEOC Form 715-01 Part 1-2. EEO PROGRAM STATUS REPORT FOR FY 2016 April 17,2017 The Honorable Jeb Hensarling Chairman Committee on Financial Services United States House of Representatives 2129 Rayburn House Office Building Washington, DC 20515 The Honorable Maxine Waters Ranking Member Committee on Financial Services United States House of Representatives 4340 Thomas P. O'Neill. Jr. house Office Building Washington, DC 20515 Dear Chairman Hensarling and Ranking Member Waters: Pursuant to Section 748 of Division E of Public Law 114-113, attached please find the Consumer Financial Protection Bureau's letter to the Board of Governors of the Federal Reserve System requesting a transfer of funds in accordance with Section 1017 of Public Law 111-203. Should you have any questions about this notification, please feel free to contact me at (202) 4359711. Sincerely, /( Catherine Galicia Assistant Director for Legislative Affairs n- unit rim., April 17, 2017 Steve Bernard Division Director and Acting Chief Financial Officer Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue NW Washington, DC 20551 Re: Funds Transfer Request, FY 2017 Quarter 3 Dear Mr. Bernard: Section 1017(a)(1) of the Consumer Financial Protection Act ("Act") requires the Board of Governors of the Federal Reserve System ("Board") to transfer to the Bureau of Consumer Financial Protection (Bureau") each quarter the amount determined by the Director to be reasonably necessary to carry out the authorities of the Bureau under Federal consumer financial law and the Act. I have determined that $125,600,000 is the amount necessary to carry out the authorities of the Bureau for FY 2017 Q3, and I request that the Board transfer this amount to the Bureau immediately. The Bureau's budget is available on its website, a copy of which is attached for your reference. Please deposit the funds in the Bureau of Consumer Financial Protection Fund established at the Federal Reserve Bank of New York ("Bureau Fund"), as soon as possible after receipt of this letter. Disbursement instructions to transfer funding from the Bureau Fund into the Treasury General Account (ABA number 021030004 for credit to ALC number 9585000) he made separately, as will investment direction. Sincerely, 2CM.4444,7 St...C4,447 Richard Cordra). Director cc: Craig Delaney Brenda Richards Attachment: Print-out from www.consurnerfinance.gov of CFPB budget February 2016 The CFPB strategic plan, budget, and performance plan and report Consumer Financial Protection Bureau Table of Contents Message from Richard Cordray 2 Overview of the CFPB 4 Plan overview 8 Our strategic plan articulates four goals In support of each goal we outline 8 8 9 Budget overview Bureau Fund Budget by strategic goal 9 11 Budget by object class, program, and FTE Budget authority 17 20 Civil Penalty Fund budget authority 21 Goal 1: Prevent financial harm to consumers while promoting good practices that benefit them 22 Introduction 23 Outcome 1.1 Outcome 1.2 25 Outcome 1.3 33 33 Goal 2: Empower consumers to live better financial lives 49 Introduction 50 Outcome 2.1 Outcome 2.2 52 58 Goal 3: Inform the public, policy makers, and the CFPB's own policymaking with data-driven analysis of consumer finance markets and consumer behavior 67 Introduction 68 Outcome 3.1 Outcome 3.2 69 72 Goal 4: Advance the CFPB's performance by maximizing resource productivity and enhancing impact 76 Introduction Outcome 4.1 77 78 Outcome 4.2 84 Outcome 4.3 90 Outcome 4.4 95 Appendix 98 Appendix A: Program evaluation, data validation, and management challenges Appendix B: Organizational chart 98 113 Message from Richard Cordray Director of the CFPB Continuing the Consumer Financial Protection Bureau's (CFPB's or Bureau's) established practice, lam pleased to share an integrated view of planning and performance updates that address requirements set forth in the Government Performance and Results Act (GPRA) of 1993, as amended in the GPRA Modernization Act (GPRAMA) of 2010. This document presents the CFPB's goals, investment choices, and accomplishments holistically. Presenting the Bureau's long-term focus areas, resource allocations, and progress achieved to date in a unified document aims to provide a balanced and transparent status update on the CFPB's work to American consumers, Congress, and other key stakeholders. I am proud to share the CFPB's Strategic Plan for fiscal years 2013-2017, which guides our long-range work, as well as a comprehensive review of progress that the CFPB achieved in fiscal year (FY) 2013 across its four Strategic Goals. In addition, this document contains the Bureau's most current view of budget projections for FY 2016-2017 and corresponding measures across its performance goals. The CFPB continues to strengthen its performance planning and reporting capabilities. This year's report reflects the Bureau's continued emphasis on balanced performance planning, accurate data for measuring performance, and evaluating programs with a view toward increasing effectiveness. To share a few highlights, in FY 2013, the CFPB: • Provided digital content, materials, and decision tools to more than 6.8 million consumers—nearly 1.2 million more consumers reached than the previous year; • Handled more than 263,000 consumer complaints across a broad range of financial products, exceeding the 700,000 mark for the total number of consumer complaints handled by the CFPB since July 21, 2011 and expanded the Consumer Complaint Database to include consumer narratives; 2 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT • Shared investigative information with more than 100 different government agencies in 186 matters; • Published 6 notable reports about specific consumer financial products, markets, or regulations, including the Data Point: Credit Invisibles report, the Arbitration Study report, and others; and • Hosted is public events on key issues affecting consumer financial markets such as credit cards, mortgages, auto finance, and payday lending. Results achieved in the course of FY 2015 suggest that the Bureau continues to mature across its focus areas in supervision, enforcement, research, and outreach to American consumers. While the CETB's resource base is not expected to experience substantial increases in FY 2016-17, the Bureau's work to date indicates that consumers of financial services face challenges across product areas, highlighting the need for the Bureau to leverage available resources carefully. The CFPB will ensure effectiveness of its actions based on careful planning, data-driven choices, deployment of innovative operational and technological solutions, and engagement of its mission-focused workforce across the nation. Congress created the CFPB as an independent Bureau within the Federal Reserve System as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, in direct response to a severe financial crisis. While the immediate effects of the turmoil have receded over the last several years, structural issues that the CFPB has identified through its work clearly signal that the Bureau's mission of protecting American consumers remains as critical as ever. The Bureau will continue to work closely with Congress, businesses, consumer advocates, and Federal, state, and local partners to increase the effectiveness and robustness of its consumer protection efforts. Sincerely, Cout, Richard Cordray, Director February 2016 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT 3 Overview of the CFPB The Consumer Financial Protection Bureau (CFPB) was established on July 21,2010 under Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act Public Law No. 111-203 (Dodd-Frank Act). The CFPB was established as an independent bureau within the Federal Reserve System and is an Executive agency as defined in Section 105 of Titles, United States Code. The Dodd-Frank Act authorizes the CFPB to exercise its authorities to ensure that, with respect to consumer financial products and services: 1. Consumers are provided with timely and understandable information to make responsible decisions about financial transactions; 2 Consumers are protected from unfair, deceptive, or abusive acts and practices and from discrimination; 3 Outdated, unnecessary, or unduly burdensome regulations are regularly identified and addressed in order to reduce unwarranted regulatory burdens; 4 Federal consumer financial law is enforced consistently in order to promote fair competition; and 5 Markets for consumer financial products and services operate transparently and efficiently to facilitate access and innovation. Under the Dodd-Frank Act, on the designated transfer date, July 21,2011, certain authorities and functions of several agencies relating to Federal consumer financial law transferred to the CFPB in order to accomplish the above objectives. These authorities were transferred from the Board of Governors of the Federal Reserve System (Board of Governors), Office of the Comptroller of the Currency (OCC), Office of Thrift Supervision (OTS), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and the Department of Housing and Urban Development (HUD). In addition, Congress vested the Bureau with authority to enforce in certain circumstances the Federal Trade Commission's (F'PC) Telemarketing Sales Rule and its rules under the FTC Act, although the FTC retains full authority over these rules. The Dodd-Frank Act also provided the CFPB with certain other Federal consumer financial regulatory authorities. 4 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Our organization Under the Dodd-Frank Act, the Secretary of the Treasury was responsible for establishing the CFPB and performing certain functions of the Bureau until a Director of the CFPB was in place. The Bureau's day-to-day operations were managed by the Special Advisor to the Secretary of the Treasury for the Consumer Financial Protection Bureau until January 4, 2012, when President Obama appointed Richard Cordray as the first Director of the CFPB. Subsequently, the U.S. Senate confirmed the appointment of Richard Cordray on July 16, 2013, and Director Cordray was sworn in as the first Senate-confirmed Director of the CFPB on July 17, 2013. To accomplish its mission, the CFPB is organized into six primary divisions: 1. Consumer Education and Engagement: works to empower consumers with the knowledge, tools, and capabilities they need in order to make better-informed financial decisions by engaging them in the right moments of their financial lives, while addressing the unique financial challenges faced by four specific populations. 2 Supervision, Enforcement, and Fair Lending: ensures compliance with Federal consumer financial laws by supervising market participants and bringing enforcement actions when appropriate. 3 Research, Markets, and Regulations: conducts research to understand consumer financial markets and consumer behavior, evaluates whether there is a need for regulation, and determines the costs and benefits of potential or existing regulations. 4 Legal Division: ensures the Bureau's compliance with all applicable laws and provides advice to the Director and the Bureau's divisions. 5 External Affairs: manages the Bureau's relationships with external stakeholders and ensures that the Bureau maintains robust dialogue with interested stakeholders to promote understanding, transparency, and accountability. 6 Operations: builds and sustains the 0-TB's operational infrastructure to support the entire organization and hears directly from consumers about challenges they face in the marketplace through their complaints, questions, and feedback. CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT 5 Our mission The CFPB is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. Our vision If we achieve our mission, then we will have encouraged the development of a consumer finance marketplace • where customers can see prices and risks up front and where they can easily make product comparisons; • in which no one can build a business model around unfair, deceptive, or abusive practices; • that works for American consumers, responsible providers, and the economy as a whole. We will achieve our mission and vision through: Data-driven analysis The CFPB is a data-driven agency. We take in data, manage it, store it, share it appropriately, and protect it from unauthorized access. Our aim is to use data purposefully, to analyze and distill data to enable informed decision-making in all internal and external functions. Innovative use of technology Technology is core to the CM accomplishing its mission. This means developing and leveraging technology to enhance the 0-TB's reach, impact, and effectiveness. We strive to be recognized as an innovative, 21st century agency whose approach to technology serves as a model within government. Valuing the best people and great teamwork At the CFPB, we believe our people are our greatest asset. Therefore, we invest in world-class training and support in order to create a diverse and inclusive environment that encourages employees at all levels to tackle complex challenges. We also believe effective teamwork extends outside the walls of the CFPB. We seek input from and collaborate with consumers, industry, government entities, and other external stakeholders. 6 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT We aim to embody the following values in everything we do: Service Our mission begins with service to the consumer and our country. We serve our colleagues by listening to one another and by sharing our collective knowledge and experience. Leadership Fostering leadership and collaboration at all levels is at the core of our success. We believe in investing in the growth of our colleagues and in creating an organization that is accountable to the American people. Innovation Our organization embraces new ideas and technology We are focused on continuously improving, learning, and pushing ourselves to be great. CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT 7 Plan overview Our strategic plan articulates four goals Goal 1 Prevent financial harm to consumers while promoting good practices that benefit them. Goal 2 Empower consumers to live better financial lives. Goal 3 Inform the public, policy makers, and the CFPB's own policymaking with data-driven analysis of consumer finance markets and consumer behavior. Goal 4 Advance the CFPB's performance by maximizing resource productivity and enhancing impact. In support of each goal we outline 8 Budget Resource allocations we will make in order to achieve our goals. Outcomes Desired outcomes that further define the focus of our work. Strategies & investments Strategies and investments that lay out the actions we will take to accomplish our outcomes. Performance goals Specific, measurable goals we will use to assess our progress along with associated measures and indicators. CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Budget overview The CFPB's operations are funded principally by transfers made by the Board of Governors of the Federal Reserve System from the combined earnings of the Federal Reserve System, up to the limits set forth in the Dodd-Frank Act. The Director of the CFPB requests transfers from the Federal Reserve System in amounts that he has determined are reasonably necessary to carry out the Bureau's mission within the limits set forth in the Dodd-Frank Act. Transfers through FY 2013 were capped at pre-set percentages of the total 2009 operating expenses of the Federal Reserve System. In FY 2014, FY 2015 and beyond, the funding caps have been adjusted annually, based on the percentage increase in the employment cost index for the total compensation for state and local government workers, which is published by the Federal Government. Transfers from the Federal Reserve System were capped at $618.7 million for FY 2015 and are capped at $631.7 million for FY 2016. For FY 2017, the funding cap will be $646.2 million. Funds transferred from the Federal Reserve System are deposited into the Bureau of Consumer Financial Protection Fund (Bureau Fund), which is maintained at the Federal Reserve Bank of New York. Pursuant to the Dodd-Frank Act, the CFPB is also authorized to collect and retain for specified purposes civil penalties obtained from any person for violations of Federal consumer financial laws. The CFPB generally is authorized to use these funds for payments to the victims of activities for which civil penalties have been imposed, and may also use the funds for consumer education and financial literacy programs under certain circumstances. Funds collected by the CFPB under this authority are deposited into the Consumer Financial Civil Penalty Fund (Civil Penalty Fund) separately maintained at the Federal Reserve Bank of New York. Amounts in the Civil Penalty Fund are available without fiscal year limitation. Bureau Fund The CFPB Bureau Fund FY 2016 and FY 2017 budget estimates included in this Report allow the Bureau to continue to fulfill its statutory purpose, objectives, and functions pursuant to Section 1021 of the Dodd-Frank Act and will support Bureau operations as it continues to grow and mature as a Federal agency. The FY 2017 budget estimate of $636.1 million is 5.0% percent above the FY 2016 budget estimate of $605.9 million. The budget supports additional operations, policy, and examination staff, and key investments supporting improvements to the consumer response system, consumer education and engagement initiatives, as well as IT infrastructure and system CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT 9 implementation projects. The increase from FY 2016 to FY 2017 reflects primarily an increase in staffing, especially in the Operations; Research, Markets, and Regulations; and the Supervision, Examination and Fair Lending programs. The remaining increase will support migration of the consumer response function to the Bureau's enterprise solution to support steady state operations, improvements to support increased contact volume and enhance the services of the contact center, and efforts to raise public awareness of Bureau tools and resources. As discussed throughout this document, these funds will help the Bureau achieve its mission and the four strategic goals outlined in this plan. 10 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Budget by strategic goal Goal 1 Prevent financial harm to consumers while promoting good practices that benefit them. Goal 2 Empower consumers to live better financial lives. Goal 3 Inform the public, policy makers, and the CFPB's own policymaking with data-driven analysis of consumer finance markets and consumer behavior. Goal 4 Advance the CFPB's performance by maximizing resource productivity and enhancing impact. TABLE 1 Budget by strategic goal ($ in the millions) FY 2015* % FY 2016** % FY 2017** % Goal 1 $252.0 48% $279.4 46% $292.5 46% Goal 2 $107.8 20% $131.6 22% $139.9 22% Goal 3 $46.4 9% $56.3 9% $57.3 9% Goal 4 $118.2 23% $138.6 23% $146.4 23% $524.4 100% $605.9 100% $6361 100% Total FY 2015 amounts reflect obligations incurred and Include upward adjustments to poor year obligations ** FY 5016 and FY 5017 estimates are based on the best available information at the time the Budget was prepared and are subject to revision CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 11 TABLE 2: FIE by strategic goal FY 2015 FY 2016 FY 2017 Goal 1 799 874 928 Goal 2 231 242 263 Goal 3 97 114 130 Goal 4 338 393 436 1,465 1,623 1,757 Total The proportion of funding across all goals is expected to remain relatively constant through FY 2017. The following discussion provides details on the significant increases in FY 2016 and FY 2017 for each goal. An increase in regulations and examination staff represents the largest increase in Goal 1. Examiner training and travel also increases to support the continued growth of the regional supervision and examination workforce. Additional increases in e-law tools and litigation support are expected to continue to support enforcement activities. In FY 2017, support for small business rulemaking activities is proposed to carry out the Bureau's statutory obligations under Section 1071 of the Dodd-Frank Act. Finally, a moderate surge for the development of a Supervision Compliance Tool is expected to begin in earnest in FY 2016 but will plateau in FY 2017. As discussed earlier, the increase in Consumer Response represents a significant portion of the increase in Goal 2. Amounts budgeted for the consumer response system and the contact center will support steady-state and service enhancements. Additionally, investments in consumer education and engagement initiatives also contribute to the increase in Goal 2. New initiatives in FY 2016 and FY 2017 will result in an increase in the budget supporting Goal 3, although to a lesser extent. The increases largely support investments in consumer education and engagement activities for undersen-ed and special populations as well as lookbacks or assessments of the effectiveness of rules previously issued by the Bureau. An increase in the budget supporting Goal 4 reflects the Bureau's evolution as a data-driven agency focused on protecting its infrastructure as it continues to grow. In FY 2017, investments across Goal 4 are expected to level off closer to FY 2015 levels as the development of technology infrastructure and operational support services approach steady-state levels. There are several other investments that support all Goals. One such expense, the costs for facilities 12 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT agreements, includes costs incurred by the Bureau to maintain space for regional offices in Chicago, San Francisco, and New York, as well as temporary space in Washington D.C. during the renovation of the Bureau's headquarters, which is projected to conclude by the end of FY 2017. There will be an associated temporary increase in facilities costs during FY 2017 while facilities services are phased in at the renovated headquarters building, but this will level out when most Bureau staff return to the headquarters location upon completion of the renovation. The Bureau also expects to incur a corresponding temporary increase in Furniture, Fixtures and Equipment for the headquarters building renovation necessary to furnish the newly renovated space prior to occupation. Key investments are described in more detail within the discussion of each goal. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 13 TABLE 3: Key investments (5 in the millions) Outcome Key Investment Description 1.1 Disclosure, Design, Testing, and Implementation FY 2015 FY 2016 FY 2017 $0.6 $1.1 $0.4 Small Business Rulemaking 1.2 / 1.3 Examiner Training and Travel $2.0 $15.6 $17.8 $18.0 e-Law Tools and Support $7.0 $3.3 $1.7 Litigation Support $3.0 $6.5 $6.8 Supervision Compliance Tool $2.6 $4.2 $2.0 Review of Enforcement Processes $1.6 Supervision and Enforcement Training & Travel $1.1 $2.4 $2.6 Examiner Commissioning Training Program $1.0 $1.6 $1.6 $1.5 $1.0 Nonbank Registration Consumer Reporting Studies 2.1 2.2 14 Consumer Response System and Contact Center Support $3.8 $22.7 $29.7 $35.5 Consumer Response Operational and Program Support $2.9 $4.1 $2.1 Consumer Response SystemComplaint Analytics $2.8 $2.7 $2.7 Optimizing CFPB Communication and Consumer Engagement Channels $0.7 $1.0 $0.7 Consumer Services Awareness Building $6.5 $14.0 $11.0 Consumer Education Initiatives $3.8 $5.4 $6.0 Underserved and Special Populations Programs and Outreach $1.7 $3.6 $4.2 Consumer Experience Program $1.3 $2.5 $3.7 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Outcome 3.1 3.2 Key Investment Description FY 2015 FY 2016 FY 2017 Your Money, Your Goals $1.1 $0.9 $1.0 Credit Card Database $2.9 $3.1 $3.3 Other Market Data $1.6 $1.5 $0.6 National Mortgage Database $1.4 $1.6 $1.5 HMDA Development and Implementation $1.2 $2.1 $1.6 HMDA Data Processing $0.7 $0.8 $1.0 Primary Data Collection $1.0 $1.8 $0.7 Underserved and Special Populations Research $0.6 $2.4 $2.0 Financial Education Research $0.6 $1.2 $2.1 $3.3 $2.5 Lookbacks 4.1 4.2 Human Capital Shared Services, Infrastructure, and Operations $7.2 $7.7 $7.7 Learning, Leadership, and Organization Development Facilitation and Design $2.1 $2.6 $2.7 Outreach, Candidate Recruiting, and Candidate Selection support $1.4 $2.5 $1.8 Diversity, Inclusion and Equal Opportunity Initiatives $0.9 $3.2 $2.2 Technology Infrastructure $21.8 $31.2 827.1 Technology Infrastructure - Shared Services $17.1 $2.9 $1.5 Cybersecurity $7.5 $9.3 $8.1 IT Portfolio Management $6.6 $11.5 $10.1 Data Infrastructure and Analysis $4.7 $8.1 $8.4 Design and Software Development Support $4.1 $6.6 $6.4 CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 15 Outcome 4.3 Key Investment Description FY 2015 FY 2016 FY 2017 e-Discovery Services Implementation $3.9 $4.4 $5.5 Customer Relationship Management System $1.7 $6.0 $5.4 Extranet $0.8 $0.3 $0.2 Document Management System $0.1 $2.5 $1.0 $16.3 $14.2 $14.1 Financial Management Support Services $4.2 $4.7 $4.8 Procurement Services & Support $1.8 $2.7 $2.5 Internal Controls $0.9 $1.7 $1.1 $19.2 $20.4 $21.9 $5.3 $3.8 $12.8 Facilities Agreements (Occupancy) for Temporary Space $10.0 $10.0 $10.1 Facilities Agreements (Utilities, Security, Other) for Temporary Space $5.0 $5.6 $5.8 Architecture and Engineering Services for HQ Building Renovation $2.5 $3.0 $10.0 Audits of the Bureau ALL Facilities Agreements (Occupancy) Facilities Agreements (Utilities, Security, Other) Furniture, Fixtures and Equipment for HQ Building Renovation Library Resources & Services $2.7 $3.4 $3.5 Personnel Security Investigations $1.3 $1.7 $1.6 $23.4 $15.8 $13.3 $258.5 $305.9 $311.7 Other* Total 16 CFPB STRATEGIC PLAN, BUDGET AND PERFORMANCE PLAN AND REPORT Budget by object class, program, and FTE TABLE 4: Budget by object classification ($ in the millions) Object Classification Personnel Compensation Personnel Benefits Benefits to Former Personnel Travel and Transportation of Persons Transportation of Things Rents, Communications, and Misc Charges Printing and Reproduction Other Contractual Services Supplies and Materials Equipment Land and Structures Total FY 2015 FY 2016 FY 2017 $192.3 $219.2 $238.5 $73.4 $80.6 $85.7 $0.3 $0.2 $0.2 $17.8 $18.6 $19.0 $0.1 $0.2 $0.2 $16.9 $15.6 $17.7 $2.5 $2.8 $3.1 $191.7 $225.7 $232.3 $5.5 $5.0 $5.1 $21.4 $38.0 $34.3 $605.9 $636.1 $2.5 $524.4 In FY 2016 and FY 2017, the Bureau will continue to expand its capacity in order to successfully achieve its strategic goals. Expenses related to personnel compensation and benefits represent the largest increases in FY 2016 and FY 2017, driven by increases in the staffing levels within the Operations and Supervision, Enforcement, and Fair Lending programs. Travel expenses are also projected to increase as the examination workforce continues to grow and conduct various examination activities across the country The growth in funds allocated to rents, communications, and miscellaneous expenses are due to annual rental increases for headquarters and regional space, and the cost to obtain new space for the Southeast region. The increase in other contractual services in FY 2016 and FY 2017 is reflective of a number of existing and new investments across all programs and goals. Equipment cost increases from FY 2015 to FY 2016 stem from infrastructure development. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 17 TABLE 5: Budget by program (S in the millions) FY 2015 FY 2016 FY 2017 $8.0 $9.7 $10.1 Operations $57.4 $69.4 $71.7 Operations - Consumer Response $50.8 $59.3 $63.7 Consumer Education and Engagement $26.3 $42.9 $44.9 Research, Markets, and Regulations $34.4 $45.8 $47.8 $140.8 $161.6 $167.9 $13.4 $15.4 $16.4 External Affairs $7.0 $8.1 $9.0 Other Programs* $2.8 $2.8 $3.3 Centralized Services $183.5 $190.9 $201.3 Total $524.4 $605.9 $636.1 Office of the Director Supervision, Enforcement, and Fair Lending Legal * Other Programs includes programs such as the Ombudsman and Administrative Law Judges, The increase in Bureau resources underscores its commitment to its mission to protect and empower consumers. Consumer Response realizes an increase in funding as it continues to develop and enhance the consumer response system and contact center in order to support steady-state operations and enhance services. The largest investments within Consumer Education and Engagement focus on building consumer awareness of Bureau tools and resources. Increased costs in the Research, Markets, and Regulations reflect the Bureau's need to conduct Lookbacks on Title XIV mortgage regulations under its statutory authority. Within Centralized Services, the increased costs support budgeted amounts for programmatic and operational services that support the entire agency (e.g., facilities, utilities, and IT-related equipment and services). The cost of Centralized Services (including rent, facilities, security, maintenance, utilities costs) increases as the Bureau continues to utilize temporary office space for its Washington, D.C. staff, as planned renovations to the Bureau's permanent headquarters 18 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT continue. These renovations will update the headquarters building to current energy, environmental, and security standards and make necessary repairs to an aging building systems and infrastructure. These renovations include replacement of major infrastructure such as the roof, building enclosure, and heating, water, and electrical systems. The current headquarters building has not undergone a significant renovation since it was constructed in 1976. The CFPB entered into an interagency agreement with the General Services Administration (GSA) in FY 2013 to manage the renovation process. TABLE 6: FTE by program Programs FY 2015 FY 2016 FY 2017 32 39 42 Operations 266 313 348 Operations - Consumer Response 151 150 156 62 73 87 Research, Markets, and Regulations 133 162 185 Supervision, Enforcement, and Fair Lending 678 742 776 Legal 65 74 82 External Affairs 39 46 51 Other Programs 39 24 30 1 465 1,623 1,757 Office of the Director Consumer Education and Engagement Total The increases in full-time equivalent employees (Fits) support the Bureau's continued growth toward steady-state operations. The increases within the Operations Division support the Bureau's data-driven work and analysis. Increases in Research, Markets, and Regulations expand the Bureau's capacity to carry out its Unified Agenda and further develop expertise in market monitoring. The additional workforce within Supervision, Enforcement, and Fair Lending including the growth of the regional examination workforce, will enable the Bureau to continue to supervise and enforce compliance with the Federal consumer financial laws across the country. The Bureau will also continue to increase FTE levels to support consumer response functions and effectively meet the demands associated with the increasing volume of consumer complaints received by the Bureau. These staffing increases are critical to creating and maintaining a high-performing organization. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 19 Budget authority Funding required to support the CFPB's operations is obtained primarily through transfers from the Board of Governors of the Federal Reserve System. In accordance with the Dodd-Frank Act, in FY 2013, transfers to the Bureau were capped at 12 percent of the Federal Reserve System's 2009 operating expenses. After FY 2013, the transfer cap was adjusted annually based on the percentage increase in the Employment Cost Index published by the Federal Government for total compensation for state and local government. The inflation-adjusted transfer cap for FY 2016 is $631.7 million, and the transfer cap for FY 2017 is $60.2 million. Funds transferred from the Federal Reserve System to fund the operations of the Bureau are transferred into the Bureau Fund quarterly and maintained at the Federal Reserve Bank of New York. The Bureau anticipates requesting less than the transfer cap to fund operations in FY 2016 and FY 2017. In addition to transfers from the Federal Reserve, a small portion of the 0-TB's budget resources comes from receipts collected from interest on Treasury securities and filing fees pursuant to the Interstate Land Sales Full Disclosure Act of 1968 (ILSA). ILSA fees are deposited into an account maintained by the Department of the Treasury and may be expended for the purpose of covering all or part of the costs that the Bureau incurs to operate the ILSA Program. TABLE 7: Bureau Fund ($ in the millions) Receipts FY 2015 FY 2016 FY 2017 $485.1 $564.9 $636.1 $0.3 $0.3 $0.3 Unobligated Balances, start of year $139.5 $130.0 $90.4 Recoveries of Prior Year Obligations $29.5 $1.0 $1.0 Total Budgetary Resources $654.4 $696.2 $727.8 Total Obligations $524.4 $605.9 $636.1 Transfers from the Federal Reserve Board Other Receipts 20 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Civil Penalty Fund budget authority The Dodd-Frank Act authorizes the CFPB to ollect and retain for specified purposes civil penalties obtained from any person in a judicial or administrative action under Federal consumer financial laws. The CFPB maintains the Consumer Financial Civil Penalty Fund (CPF) for this purpose. Collections of civil penalties are deposited into the CPF, and such funds are available for payments to victims of activities for which civil penalties have been imposed under the Federal consumer financial laws. To the extent that victims cannot be located or payments are otherwise not practicable, the Bureau is authorized to use such funds for consumer education and financial literacy programs. As directed by the Dodd-Frank Act, the CFPB maintains a separate account for these funds at the Federal Reserve Bank of New York. On May 7, 2013, the Bureau published in the Federal Register the Civil Penalty Fund rule, 12 C.F.R. part 1075, a final rule governing how the Bureau will use funds in the CPF. This rule states that the Civil Penalty Fund Administrator will allocate funds to classes of eligible victims and, as appropriate, to consumer education and financial literacy programs in accordance with a schedule published by the Bureau on its website. The CFPB collected $342.1 million in actual deposits through the end of FY 2015 and expects to collect additional amounts during FY 2016. Of the amounts collected to date, the Bureau allocated $239.3 million. Approximately $210.5 million was allocated to compensate harmed consumers and $28.8 million for consumer education and financial literacy programs. Of the $28.8 million allocated to consumer education and financial literacy programs, $12.3 million was obligated through the end of FY 2015, and an additional $16.5 million is projected to be obligated in FY 2016. Additional information regarding allocations from the CPF is available at consuntertinanue.gov. TABLES: Civil Penalty Fund ($ in the millions) Receipts FY 2015 FY 2016 Collections $183.1 $18.9 Unobligated Balances, start of year $157.1 $305.6 $137.6 $340.2 $324.5 $137.6 $34.6 $186.9 $119.5 Total Budgetary Resources Total Obligations FY 2017 CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 21 GOAL 1 Prevent financial harm to consumers while promoting good practices that benefit them TABLE 9: Budget for goal 1, by program ($ in the millions) Goal 1 Office of the Director FY 2015 FY 2016 FY 2017 $1.4 $1.2 $1.4 $0.2 $0.2 Operations Research, Markets, and Regulation $12.5 $15,9 $18,9 Supervision, Enforcement, and Fair Lending $140.8 $160.8 $167.0 Legal $5.2 $5.5 $6.2 External Affairs $1.0 $1.3 $1.3 Other Programs $1.3 $0,9 $1.3 $89.8 $93.6 $96.2 $252.0 $279.4 $292.5 Centralized Services Total 22 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Introduction FIGURE 1: Percent of American families that rely on one or more financial product' 1 MC, 92% 80c 60E. 45% 39% 30% 19% 2E6 Transaction accounts Mortgages Credit card balances Vehicle loans Education loans Prior to enactment of the Dodd-Frank Act, consumer financial protection had not been the primary focus of any one Federal agency, and no agency could set the rules for and oversee the entire consumer financial market. The result was a system without sufficiently effective rules or consistent enforcement of the law. These factors ultimately contributed to the 2008 financial crisis. Consumer financial protection is the CFPB s singular focus. The Dodd-Frank Act increased accountability in government by consolidating consumer financial protection authorities that had existed across seven different Federal agencies into one, the newly formed Consumer Financial Protection Bureau. These authorities include the ability to issue regulations under more than a dozen Federal consumer financial laws. As provided in section 1021 of the Dodd-Frank Act, the purpose of the CFPB is to implement, and where applicable, enforce Federal consumer financial laws consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services and that such markets are fair, transparent, and competitive. In addition, the Dodd-Frank Act gives the CFPB the authority to supervise and examine many nonbank financial service providers previously unsupervised at the Federal level, such as mortgage companies, payday lenders, and private education lenders of any size, and larger participants of other markets that the Bureau defines by rules, such as credit reporting companies. With the consolidation of existing and new authorities, the CFPB is now focused and equipped to prevent financial harm to consumers while promoting practices that benefit consumers across financial institutions. 1 Federal Reserve Board, "2010 Survey of Consumer Finances," tables 13-10,6-10 based on public data, I updated 7/19/2012. v‘v.I:ederalreserve.go,./ecouresdatalscl/scl 20 I (Mit En (Last viewed 8/23/2012) CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 23 Financial institutions subject to the CFPB supervisory authority for consumer financial protection purposes TABLE 10: Large banks, thrifts, credit unions & Certain nonbank institutions their affiliates Representing over $10 trillion in assets (-75% of total industry) Including companies engaged in mortgage lending, brokering, and servicing; payday lenders; private education lenders; and larger participants of the consumer debt collection and consumer reporting markets Industry structure is always changing, and therefore, so too will the number of institutions that fall under the CFPB's supervisory authority. The CM is designed to be agile and adjust its approach to supervising the financial industry in order to respond rapidly to changing consumer needs. The CFPB will reach its first goal by achieving the following three outcomes: 1. Outcome 1.1: Create, adopt, and administer regulations in order to promote a consumer financial marketplace in which: (A) consumers can understand the costs, benefits, and risks associated with consumer financial products and services initially and over the term of the product or service, and (B) consumers are not subject to deceptive, unfair, abusive, or discriminatory practices. 2. Outcome 1.2: Supervise institutions to foster compliance with Federal consumer financial laws, promote a fair consumer financial marketplace, and prevent unlawful discrimination. 3. Outcome 1.3: Enforce Federal consumer financial laws and hold violators accountable. 24 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Outcome 1.1 Create, adopt, and administer regulations in order to promote a consumer financial marketplace in which: (A) consumers can understand the costs, benefits, and risks associated with consumer financial products and services initially and over the term of the product or service, and (B) consumers are not subject to deceptive, unfair, abusive, or discriminatory practices. Outcome leader: Associate Director of Research, Markets, and Regulations Strategies and investments The following strategies and investments have been put in place to help the CFPB achieve outcome 1.1. Strategies • Develop and maintain an efficient fact-based approach to developing, evaluating, revising, and finalizing regulations. • Develop a rule-writing team with highly advanced skills in relevant and specialized legal, business, and economic areas. • Work with consumers and industry stakeholders on developing regulations to implement existing Federal consumer financial laws effectively. • Leverage technology to continuously improve the efficiency and effectiveness of Federal rulemaking processes and procedures. Investments PERSONNEL Continue to expand capacity to conduct rulemaking activities, provide interpretive guidance, develop small business compliance guides and provide other implementation support, and evaluate benefits and costs of potential rules. DISCLOSURE, DESIGN, TESTING, AND IMPLEMENTATION Continue to conduct and gain expertise in disclosure design and disclosure usability testing. Qualitative research, such as one-on-one interviews and focus groups, enables the Bureau to put forward proposed forms which consumers are more likely to be able to navigate and comprehend. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 25 These investments also contribute to evidence-based market research. SMALL BUSINESS RULEMAKING Section 1071 of the Dodd-Frank Act requires lenders to gather and report information about credit applications made by small, women-owned, and minority-owned businesses. The Dodd-Frank Act vests CFPB with authority to prescribe rules and issue guidance necessary to carry out, enforce, and compile data pursuant to section 1071. Performance goals The CFPB will assess its progress on achieving outcome 1.1 through the following three performance goals: Performance goal 1.1.1: Complete consumer protection related rulemakings within nine months of final public comments. The Bureau has made it a priority to ensure that it puts consumer protection regulations into place, including those implementing statutory requirements, in a timely manner. For this reason, the Bureau believes that completion of its own regulatory proposals within nine months of the close of the final public comment period is a good measure of whether it is meeting this goal. PERFORMANCE MEASURE The percentage of proposed ru lema kings, conducted solely by the CFPB, finalized or otherwise resolved within nine months of the due date for receipt of final public comments.' TABLE 11: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 75% 75% 75% 75% 75% Actual 100% 78% 100% 86% NA NA PROGRESS UPDATE AND FUTURE ACTION 2015, the Bureau issued a number of rulemakings within nine months of the closing of a final comment period. In FY The Bureau issued a number of technical and clarifying amendments to the mortgage rules 2 This measure does not include interagency rulemakings, rulemakings inherited from the Federal Reserve Board, and rulemakings on which the Bureau expects to do further quantitative research following the receipt of public comments. 26 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT issued in January 2013 to implement consumer protection provisions enacted by the DoddFrank Act. The Bureau issued a rule in October 2014 that provides an alternative small servicer definition for non-profit entities that meet certain requirements and amends the existing exemption from the ability-to-repay rule for non-profit entities that meet certain requirements. This rule also provides a cure mechanism for the points and fees limit that applies to qualified mortgages. While not included in this calculation, the Bureau issued an interpretive rule providing guidance to clarify that the Bureau's Ability-to-Repay Rule incorporates the existing definition of "assumption" under Regulation Z. In January 2015, the Bureau finalized amendments to the TILA-RESPA Integrated Disclosures rulemaking. This rule extends the timing requirement for revised disclosures when consumers lock a rate or extend a rate lock after the Loan Estimate is provided and permits certain language related to construction loans for transactions involving new construction on the Loan Estimate. This rule also amended the 2013 Loan Originator Final Rule to require placement of the Nationwide Mortgage Licensing System and Registry ID (NMLSR ID) on the integrated disclosures. Additionally, the Bureau made non-substantive corrections, including citation and cross-reference updates and wording changes for clarification purposes, to various provisions of Regulations X and Z, as amended or adopted by the 2013 TILA-RESPA Final Rule. During FY 2015, and at the end of FY 2014, the Bureau finalized two larger participant rulemakings. The first rule defines larger participants in a market for international money transfers. Specifically, this rule identifies a market for international money transfers and defines "larger participants" of this market that are subject to the Bureau's supervisory authority. In June 2015, the Bureau finalized a rule defining larger participants in the market for automobile financing. Among other things, the final rule identifies a market for automobile financing and defines "larger participants" of this market that are subject to the Bureau's supervisory authority. In addition, the rule defines certain automobile leasing activity as a financial product or service. Following up on the Bureau's 2011 Streamlining RFI, the Bureau finalized amendments to Regulation P, which implements the Gramm-Leach-Bliley Act. Regulation P requires, among other things, that financial institutions provide an annual disclosure of their privacy policies to their customers. The amendment created an alternative delivery method for this annual disclosure, which financial institutions will be able to use under certain circumstances. In August 2014, the Bureau finalized amendments to subpart B of Regulation E, which implements the Electronic Fund Transfer Act, and the official interpretation to the regulation. This final rule extends a temporary provision that permits insured institutions to estimate certain pricing disclosures pursuant to section 1073 of the Dodd-Frank Act. Absent further action by the Bureau, that exception would have expired on July 21, 2015. Based on a determination that the termination of the exception would negatively affect the ability of insured CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 27 institutions to send remittance transfers, the Bureau issued a rule extending the temporary exception by five years from July 21, 2015, to July 21, 2020. The Bureau also made several clarifications and technical corrections to the regulation and commentary. Finally, during FY 2015, the Bureau proposed a rule to amend Regulation C to implement amendments to the Home Mortgage Disclosure Act (HMDA) made by section 1094 of the DoddFrank Act. Consistent with section 1094 of the Dodd-Frank Act, the Bureau proposed to add several new reporting requirements and to clarify several existing requirements. The Bureau also proposed changes to institutional and transactional coverage under Regulation C. Today, HMDA data are the preeminent data source for regulators, researchers, economists, industry, and advocates studying and analyzing trends in the mortgage market for a variety of purposes, including general market and economic monitoring, as well as assessing housing needs, public investment, and possible discrimination. The final rule was issued a little over a year after the close of the comment period: as the Bureau worked to finalize the proposed rule, the Bureau took a number of issues into consideration, including over 400 comments. Further, in light of the various Dodd-Frank Act requirements and private market data standards initiatives, the Bureau believes that it is important to conduct a broad public dialog about the HMDA rulemaking and to use implementation of the new HMDA requirements as an opportunity to comprehensively review the HMDA reporting regime. In particular, the Bureau used this rulemaking to assess whether there were opportunities to improve upon the data collected, reduce unnecessary burden on financial institutions, and, as appropriate, modernize and streamline the manner in which financial institutions collect and report data. The Bureau also proposed a number of rules in FY 2015, which have not yet been finalized. The Bureau also proposed a rulemaking to address certain mortgage servicing rules issued in 2013. The proposal focuses primarily on clarifying, revising, or amending provisions regarding force-placed insurance notices, policies and procedures, early intervention, and loss mitigation requirements under Regulation X's servicing provisions; and periodic statement requirements under Regulation Z's servicing provisions. The proposed amendments also address proper compliance regarding certain servicing requirements when a consumer is a potential or confirmed successor in interest, is in bankruptcy, or sends a cease communication request under the Fair Debt Collection Practices Act. The proposed rule makes technical corrections to several provisions of Regulations X and Z. The Bureau proposed and finalized revisions to the regulatory definitions of small creditor, and rural and underserved areas, for purposes of certain special provisions and exemptions from various requirements provided to certain small creditors under the Bureau's mortgage rules The Bureau proposed a rule to create comprehensive consumer protections for prepaid financial products. Among other things, the proposal would require prepaid companies to limit 28 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT consumers' losses when funds are stolen or cards are lost, investigate and resolve errors, provide easy and free access to account information, and adhere to credit card protections if a credit product is offered in connection with a prepaid account. The Bureau also proposed new "Know Before You Owe" prepaid disclosures that would provide consumers with clear information about the costs and risks of prepaid products upfront. Performance goal 1.1.2: Complete all five-year regulation assessments on schedule. Section 1022(d) of the Dodd-Frank Act requires the CFPB to assess each significant rule the Bureau adopts under Federal consumer financial law and publish a report of the assessment within five years of the effective date of such rule. The assessment addresses, among other factors, the rule's effectiveness in meeting the purposes and objectives of Title X of the DoddFrank Act, and the specific goals stated by the Bureau. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 29 PERFORMANCE MEASURE TABLE 12: The percentage of five-year regulation assessments completed on schedule. Target FY 2012 NA Actual NA Develop a plan for meeting a pre-rule baseline The Bureau began identifying existing data that may be useful for establishing baselines and for analysis of potential changes from those baselines, identifying gaps in the necessary data, and planning for the acquisition of additional data to fill those gaps. Develop strategies to best isolate the effect of rules The Bureau continued developing an approach and interpretation of the lookback requirement for all major rules, developed sources of data to monitor impacts of mortgage rules, developed contacts with industry and policy communities to collect data, and continue planning for assessing the impact of the Remittance rule. FY 2015 Begin collection and analysis of relevant quantitative and qualitative information The Bureau continued market monitoring, and assessing and preparing data sources, such as the National Mortgage Database (NMDB), HMDA, the Consumer Credit Panel, and rate-sheet data for use in Lookback analysis. FY 2016 Continue collection and analysis of relevant quantitative and qualitative information. Plan industry outreach regarding the impact of rules that went into effect at the beginning of 2014 NA FY 2017 Continue collection and analysis of relevant quantitative and qualitative data. Conduct industry outreach regarding the impact of rules that went into effect at the beginning of 2014* NA FY 2013 FY 2014 * The "conducting industry outreach" target was moved from FY 2016 to FY 2017 to assess Industry adjustment to the rules over the longest period of time possible since the effective date, which will provide a richer picture of impacts and adjustments and is more likely to reveal trends 30 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT PROGRESS UPDATE AND FUTURE ACTION The Bureau's first five-year assessments will be due in FY 2019. In FY 2016, the Bureau will continue to develop data collection and methodologies to enable the Bureau to draw inferences about the effects of rules. Performance goal 1.1.3: Ensure that all rulemakings are informed by public outreach processes, such as Small Business Regulatory Enforcement Fairness Act (SBREFA) panels and consumer and industry roundtables. The Regulatory Flexibility Act, as amended by SBREFA and the Dodd-Frank Act, requires the Bureau to convene a Small Business Review Panel before proposing a rule that will have a significant economic impact on a substantial number of small entities. Other public outreach efforts, such as meetings with consumers and industry stakeholders in the development of a proposal, inform and otherivise assist the Bureau in crafting more effective rules. The Bureau is also interested in exploring ways to increase general consumer involvement in the rulemaking process. PERFORMANCE MEASURE The percentage of significant consumer protection related, notice-and-comment rulemakings informed by public outreach processes TABLE 13: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA NA 100% 100% 100% 100% Actual 100% 100% 100% 100% NA NA PROGRESS UPDATE AND FUTURE ACTION In March 2015, under SBREFA, the Bureau released an outline of proposals under consideration for the payday lending, vehicle title lending, and installment lending rulemaking. As part of the SBREFA process, in April 2015, the Bureau along with the Office of Management and Budget and the Small Business Administration's Chief Counsel for Advocacy, met with small lenders that may be affected by the rulemaking to obtain feedback on the proposals. This rulemaking builds on Bureau research, including a white paper the Bureau published on payday and advance deposit loan in April 2013, a data point providing additional research in March 2014, and ongoing analysis. Throughout FY 2015, staff continued to participate in numerous outreach meetings and external events to monitor implementation issues in connection with its mortgage rules. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 31 Following the issuance of the final TILA-RESPA Integrated Disclosures rule in November 2013, Bureau staff participated in numerous roundtables, outreach meetings, and external events to allow stakeholders an opportunity to provide input and discuss any issues presented by the implementation of the rule. The Bureau considered this feedback as it formulated and issued additional proposals to clarify or address some of the matters and issues raised in connection with these rules. The CFPB also encouraged all stakeholders to submit formal written comments on these proposals. The Bureau also conducted numerous other public outreach efforts in FY 2013 to inform and assist the Bureau in developing non-mortgage rules. This work includes rulemakings to revise regulations the Bureau inherited from other agencies and the issuance of a proposed rule governing prepaid cards, as well as continued research and other preparations for rulemakings to address several longstanding issues regarding debt collection, payday loans and deposit advance programs, and overdraft features on deposit accounts. Furthermore, the Bureau in FY 2015 continued to conduct outreach in connection with its remittances rule, including conducting interviews with regulated entities, which informed revisions to its regulations implementing provisions of the Dodd-Frank Act that established a new system of federal protections for remittance transfers sent by consumers in the United States to individuals and businesses in foreign countries. In FY 2016, the CFPB intends to continue to undertake its public outreach efforts to consumers and industry stakeholders as it considers topics for other possible future consumer protection related rules. 32 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Outcome 1.2 Supervise institutions to foster compliance with Federal consumer financial laws, promote a fair consumer financial marketplace, and prevent unlawful discrimination. Outcome 1.3 Enforce Federal consumer financial laws and hold violators accountable. Outcome leader: Associate Director of Supervision, Enforcement, and Fair Lending Background The Bureau's Division of Supervision, Enforcement, and Fair Lending is responsible for supervising for compliance with and enforcing consumer financial protection law, including fair lending laws. The Division closely coordinates its use of both the supervision and enforcement tools, which work in tandem toward the common goal of preventing financial harm to consumers while promoting good practices that benefit them. For example, information received through enforcement may inform supervision priorities; a particular matter may arise through supervision and ultimately be resolved through enforcement; or compliance with enforcement actions may be monitored through supervision. The Associate Director for SEFL is accountable for both outcomes 1.2 and 1.3. Thus, these outcomes are closely linked and for the purposes of performance reporting, are combined with respect to their constituent performance goals. Strategies and investments The following strategies and investments have been put in place to help the CFPB achieve outcome 1.2 and outcome 1.3. Strategies • Acquire and analyze qualitative and quantitative information and data pertaining to consumer financial products and service markets and companies. • Focus resources on institutions and their product lines that pose the greatest risk to consumers, based on their size, nature of the product, and field and market intelligence. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 33 • Implement a framework for sharing information, coordinating activity and promoting best practices with fellow financial institutions' supervisory and law enforcement agencies to ensure the most effective use of regulatory resources. • Implement internal policies that facilitate the integration of the CFPB s supervision, enforcement, and fair lending functions. • Continue to develop a technology solution for coordinating supervisory information, capable of recording, storing, tracking, and reporting information on the CFPB s supervisory process. • Continue implementing a tool capable of reviewing loan and deposit portfolios for compliance with Federal consumer financial laws. Investments PERSONNEL Continue to develop our staff and supervisory skills to expand the CFPB's capacity to focus on risks to consumers in the policies and practices of consumer financial providers; analyze available data on the activities of providers, on the markets in which they operate, and on the risks to consumers; implement and enforce Federal consumer financial laws consistently for both bank and nonbank consumer financial companies; and, investigate and take actions to address potential violations of Federal consumer financial laws. EXAMINER TRAINING AND TRAVEL Continue supporting the development and delivery of training courses essential to maintaining a highly effective workforce. Also, support the travel requirements of the 0-TB's distributed workforce in order to effectively carry out its supervision program. E-LAW TOOLS AND SUPPORT Maintain and increase capacity of electronic tools that obtain, process, and analyze evidence received in enforcement investigations, enabling the CFPB to bring enforcement actions to address violations of Federal consumer financial laws more efficiently. LITIGATION SUPPORT Employ standard investigatory tools to compel documents and testimony and to seek injunctive and monetary remedies through civil actions or administrative proceedings. These functions require the use of services such as expert witnesses, court reporters, and transcription services. 34 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT SUPERVISION COMPLIANCE TOOL Automate data collection and analysis in order to review loan files more thoroughly, use supervision resources more efficiently, and streamline the on-site portion of the exam. This tool assists in improving the CEPB's ability to assess compliance with Federal consumer financial laws, and assess and detect risks to consumers. REVIEW OF ENFORCEMENT PROCESSES Engage third-party consultant to study the current planning measures, techniques, and administrative duties leading up to the commencement of enforcement work on an assigned issue. The primary goal of this effort is to find and eventually implement potential efficiencies in Enforcement's administrative, planning, and review processes. SUPERVISION AND ENFORCEMENT TRAINING AND TRAVEL Continue supporting the development and delivery of training courses essential to maintaining a highly effective supervision and enforcement program. In addition, support the travel requirements of supervision and enforcement work. EXAMINER COMMISSIONING TRAINING PROGRAM The examiner commissioning training program (ECTP) establishes transparent criteria and a training plan that will provide every examiner the opportunity to pursue their commissioning. Successful completion of the ECTP is a significant milestone in an examiner's career, signifying an examiner's attainment of the broad-based technical expertise, knowledge, skills, and tools necessary to perform the duties of a commissioned examiner. NONBANK REGISTRATION Manage and maintain an enterprise level registration program to facilitate the supervision of financial institutions or entities supervised by the CFPB. CONSUMER REPORTING STUDY Study to develop and improve metrics to assess the accuracy of consumer reports. Develop tools and benchmarks to monitor accuracy of consumer reporting industry-wide and at specific companies. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 35 Performance goals The CFPB will assess the progress on achieving outcomes 1.2 and 1.3 through the following eight performance goals: Performance goal 1.2.1 / 1.3.1: Perform supervision activities at financial services institutions under the CFPB's jurisdiction to foster compliance with Federal consumer financial laws. The CFPB has supervisory authority over banks, thrifts, and credit unions with over $m billion in assets and their affiliates (collectively "banks") and over nonbank institutions ("nonbanks"), regardless of size, in certain specific markets: mortgage companies (originators, brokers, servicers, and providers of loan modification or foreclosure relief services); private education lenders; and payday lenders. The CFPB also has supervisory authority over larger participants in other nonbank markets as the CFPB defines by rule. To date, the CFPB has issued five rules defining larger participants in the following markets: consumer reporting (effective September 2012), consumer debt collection (effective January 2013), student loan servicing (effective March 2014), international money transfers (effective December 2014), and automobile financing (effective August 2015). The CFPB's Offices of Supervision Examinations, Supervision Policy, Enforcement, and Fair Lending collaborate to conduct supervisory activities at these institutions. Supervisory activities foster compliance with Federal consumer financial laws, promote a fair consumer financial marketplace, and prevent unlawful discrimination. PERFORMANCE MEASURE TABLE 14: Supervision activities opened during the fiscal year FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA NA NA 155-170 160-200" 160-200 Actual 149 160 127 150 NA NA * The FY 2016 target was adjusted from the FY 2014 annual performance plan and report to reflect significant reductions in the Bureaus backlog of examination reports PROGRESS UPDATE AND FUTURE ACTION In FY 2015, the CFPB continued implementing its supervision program, opening 150 supervisory activities at large banks and nonbank financial institutions. Examination activities generally focus on one of the following institution product lines (IPLs) or a baseline compliance management system: • automobile finance origination; 36 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT • automobile finance servicing; • consumer reporting; • credit card account management; • debt collection; • deposits; • mortgage origination; • mortgage servicing; • remittance transfer; • short term, small dollar lending; • student loan origination; or, • student loan servicing. The exam schedule for FY 2016 was informed by strategic priorities for all areas of compliance, including fair lending, taking into account risk assessments across markets and for each institution. The prioritized exam calendar includes 191 exam events scheduled in 2016. CFPB s risk-based prioritization process allows it to compare product lines at particular institutions across charters and markets. The 0-TB's prioritization approach assesses risks to the consumer at two levels: the market level and the institution level. At the market level, the Bureau assesses the risk to the consumer from the products offered and industry practices followed. At the institution level, the Bureau considers asset size and market share, nature of product offered and associated risk, and field market intelligence (EMI). FMI includes qualitative and quantitative factors for each IPL, such as the strength of compliance management systems, the existence of other regulatory actions, findings from CFPB s prior exams, metrics gathered from public reports, the number and severity of consumer complaints received, and fair-lending-focused information. The CEPS expanded its Supervision and Examination Manual in FY 2015 by adding or revising examination procedures for: • Mortgage Origination (September 2015) • TILA Procedures—TILA RESPA Integrated Disclosures, also known as Know Before You Owe Mortgage Disclosures (September 2015) • RESPA Procedures—TILA RESPA Integrated Disclosures, also known as Know Before You Owe Mortgage Disclosures (September 2015) CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 37 • Automobile Finance (June 2015) • Mortgage Origination (May 2015; Superseded with the September 2015 update, see above) • RESPA Procedures-TILA RESPA Integrated Disclosures, also known as Know Before You Owe Mortgage Disclosures (April 2015; Superseded with the September 2015 update, see above) • TILA Procedures-TILA RESPA Integrated Disclosures, also known as Know Before You Owe Mortgage Disclosures (April 2015; Superseded with the September 2015 update, see above) • Credit Card Account Management (February 2015) The CFPB continues to coordinate with applicable Federal and state regulators on supervisory activities to minimize regulatory burden, leverage resources, and decrease the risk of conflicting supervisory directives. To facilitate this coordination, the CFPB has memoranda of understanding with, among others, the Federal prudential regulators, the Federal Trade Commission, and over sixty state bank and nonbank supervisory agencies. In addition, the CFPB has a framework with state financial agencies that establishes a dynamic and flexible process for coordination on supervision and enforcement matters. The CFPB is currently developing a replacement system for the Supervision and Examination System, its system of record for supervision work. The replacement system will organize entities by IPL, capture relationships between entities, schedule examinations, support supervisory workflows, and document the supervision process. Performance goal 1.2.2 / 1.3.2: Effectively initiate supervisory activities at financial services institutions under the CFPB's jurisdiction to determine compliance with the Federal fair lending laws, including the Equal Credit Opportunity Act (ECOA) and the Home Mortgage Disclosure Act (HMDA). The CFPB's fair lending supervision program assesses whether supervised entities have engaged in, or are engaging in, violations of the Federal fair lending laws within the Bureau's jurisdiction. The Bureau accomplishes this assessment through examinations that evaluate institutions' compliance with those laws. 38 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT PERFORMANCE MEASURE TABLE 15: Fair lending supervision activities opened during the fiscal year' FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA NA NA 20-35 20-35 20-35 Actual 67 47 33 27 NA NA PROGRESS UPDATE AND FUTURE ACTION The overall number of Fair Lending supervisory activities has decreased from FY 2013 (47) to FY 2014 (33) and FY 2015 (27) because, in the Bureau's earliest years, Fair Lending conducted baseline risk assessments and information gathering surveys of a large number of institutions. In FY 2015, Fair Lending has continued the process of executing against this earlier baseline work with targeted fair lending reviews, which are more in-depth and take more time and resources than the initial information reviews. The decrease also reflects risk-based prioritization decisions about where to focus supervisory resources, based on past examination work as well as additional prioritization inputs. Hence, there are fewer supervisory reviews overall than in previous periods. The CFPB publishes Supervisory Highlights several times each year to share findings from recent examinations (see Performance goal 1.2.3/1.3.3). In October 2014, the Bureau published the Fall 2014 issue of Supervisory Highlights with sections discussing the Bureau's supervisory observations in conducting HMDA Data Integrity Reviews (HMDA Reviews) at dozens of bank and nonbank mortgage lenders, and a discussion of the Bureau's public enforcement action for ECOA violations at GE Capital Retail Bank, now known as Synchrony Bank. The Winter 2015 edition of Supervisory Highlights published in March 2015 included information on the Bureau's supervisory observations regarding violations related to the failure of banks and nonbanks to consider forms of income protected by ECOA and Regulation B when applying for credit, such as public assistance income, and also provided information regarding adverse action notice deficiencies and failure to provide these notices in a timely manner. The Winter 2015 edition discussed the CFPB bulletin issued on November 18, 2014 that provides guidance to help lenders avoid prohibited discrimination against consumers receiving Social Security disability income. The bulletin reminds lenders that requiring unnecessary documentation from consumers who receive Social Security disability income may raise fair lending risk, and calls 3 This indicator includes MRA follow-up reviews starting in FY 2013. In addition, this indicator counts mortgage Targeted ECOA Exams and their associated I-IMDA Data Integrity Exams separately as two examinations. The overall supervision activities indicator combines mortgage Targeted ECOA Exams and their associated HMDA Data Integrity Exam as a single examination. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 39 attention to standards and guidelines that may help lenders comply with the law. The Summer 2015 edition of Supervisory Highlights published in June, 2015 discussed the CFPB bulletin issued on May if, 2015 that provides guidance to help lenders avoid prohibited discrimination against applicants whose income includes vouchers from the Section 8 Housing Choice Voucher (HCV) Homeownership Program. The bulletin also reminds lenders that discriminating against consumers because some or all of their income is from a public assistance program may violate federal fair lending protections. Performance goal 1.2.3 / 1.3.3: Issue examination reports within the CFPB's established time periods following the close of examinations. Effective supervision of financial institutions to foster compliance with Federal consumer financial laws requires prompt notice to institutions of matters requiring their attention and action to avoid further violations or consumer harm. A thorough report development and review process ensures high-quality reports that appropriately explain what the examination team found and why corrective actions, if any, are expected. PERFORMANCE MEASURE TABLE 16: close Percentage of examination reports issued within an established period following the of examinations FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA Baseline 50% 60% 60% 60% Actual NA 15% 25% 28% NA NA PROGRESS UPDATE AND FUTURE ACTION The CFPB continues to focus on issuing high-quality examination reports and supervisory letters in a timely manner. During FY 2015, Supervision continued to analyze the report development and review processes to determine methods for improving and increasing effectiveness and efficiency. Based on that review, Supervision modified its processes to account for the need to analyze information obtained after examiners complete the on-site portion of an examination and to better monitor reports that do not meet processing milestones. Based on that review, Supervision modified its processes to account for the need to analyze information obtained after examiners have completed the on-site portion of an examination, and to better monitor reports that do not meet processing milestones. Additionally, in (24 FY 2015, Supervision began a new project that will include a review of current templates for supervisory letters and examination reports. The project will look for areas that can 40 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT be streamlined without losing key content that should be communicated to supervised entities. Even after the implementation of these improvements, the CFPB will continue to review and analyze its processes to determine methods for improvement and increased effectiveness and efficiency. The CFPB intends to be transparent about the goals of its supervision program and the steps being taken to achieve those goals, while protecting the confidentiality of the underlying financial institution-specific information. In line with the CFPB's commitment to transparency, the CFPB has and will continue to publish Supervisory Highlights several times per year to share findings from recent examinations. In addition to these findings—which are communicated without identifying specific institutions, except for enforcement actions already made public—Supervisory Highlights shares remedies that Supervision has obtained for consumers who suffered financial or other harm as a result of violations of law. The purpose of this publication is to provide the public—and in particular, industry—information about supervisory expectations and compliance problems found in examinations so that industry can meet those expectations and improve compliance as needed. The CFPB published three editions of Supervisory Highlights in FY 2015. • Fall 2014 (Issue 6)—October 28, 2014: This issue of Supervisory Highlights reports examination findings in the areas of mortgage servicing, student loan servicing, consumer reporting, debt collection, and deposits. The report highlights supervision work generally completed between March 2014 and June 2014 and includes information about public enforcement actions that resulted, at least in part, from the Bureau's supervisory work. • Winter 2015 (Issue 7)—March 11, 2015: This issue of Supervisory Highlights includes examination findings in the areas of mortgage origination, consumer reporting, debt collection, fair lending, and deposits. It highlights supervision work generally completed between July 2014 and December 2015 and includes information about remedial actions that resulted, at least in part, from the Bureau's supervisory work. • Summer 2015 (Issue 8)—June 23, 2015: Issue 8 of Supervisory Highlights covers examination findings in the areas of mortgage origination, fair lending, mortgage servicing, deposits, short term, small dollar lending, and debt collection. It highlights supervision work generally completed between January 2015 and April 2015 and includes information about recent public enforcement actions that were a result, at least in part, of CFPB's supervisory work. This report also includes information on recent supervision program developments, such as updated mortgage origination examination procedures reflecting mortgage disclosure changes, as well as more information on CFPB's risk-based approach to supervision. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 41 Performance goal 1.2.4/1.3.4: Supervisory matters requiring attention resolved by the prescribed timeframe. The CFPB monitors institutions that receive notice of matters requiring attention to ensure that corrective actions are taken within the prescribed timeframe in response to supervisory activities, which fosters compliance with Federal consumer financial laws and promotes a fair consumer financial marketplace. PERFORMANCE MEASURE The percentage of supervisory matters requiring attention resolved by the prescribed timefra me in response to supervisory activities TABLE 17: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA Baseline 80% 80% 80% 80% Actual NA 62% 90% 97% NA NA PROGRESS UPDATE AND FUTURE ACTION Deliberate efforts were made in FY 2014 to ensure CFPB allotted more realistic and reasonable timeframes for supervised institutions to correct matters requiring attention. Regions placed further emphasis on timeframe follow-up to ensure supervised institutions complied with prescribed deadlines. The CFPB continues to conduct on-site reviews of particular issues or actions that may require independent validation. Performance goal 1.2.5 / 1.3.5: Cooperate and share information with its partners in local, state, and federal law enforcement as part of its efforts to protect consumers, deter wrongdoers, and build a better marketplace. This indicator ensures that the CFPB works well with its partners at the local, state, and federal level to share information, subject to the Bureau's regulations, policies on information sharing, and other legal restrictions, across jurisdictions and to make the best use of limited resources. 42 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT PERFORMANCE MEASURE Instances in which the CFPB obtains information from local, state, or federal law enforcement partners that contributes to CFPB law enforcement actions, or investigations in which the CFPB cooperates or shares information with law enforcement partners! TABLE 18: FY 2012 FY 2013 FY 2014 FY 2015 FY2016 FY2017 Share requested investigative information* Share requested investigative information* NA NA Target NA NA NA Share requested investigative information* Actual 22 80 280 186 * When investigative information is requested by law enforcement and regulatory agencies, share responsive in-formation where permissible under relevant lew and appropriate under the circumstances PROGRESS UPDATE AND FUTURE ACTION The Bureau continues to cultivate strong working relationships with its partners at federal, state, and local regulators and law enforcement agencies. In May 2013, the Bureau entered into a framework with state financial regulatory authorities that established a dynamic and flexible process for coordination on supervision and enforcement matters. Since opening its doors in July 2011, the Bureau has signed more than 6o information-sharing MOUs with federal, state, and local governmental agencies. On September 2, 2015, the Bureau and HUD signed a Memorandum of Understanding, delineating among other things, how each agency will use and properly share information to enhance fair lending compliance and interagency collaboration. In particular, HUD will have access to the Bureau's Government Portal which will allow HUD to view the Bureau's consumer complaints. HUD, in turn, will provide quarterly reports to the Bureau that describes the fair lending complaints that it has received. This fiscal year, the Bureau has shared investigative information with more than my different government agencies in 186 matters and will continue to coordinate and cooperate with its partners in the Bureau's efforts to protect consumers. The Bureau is committed to maximizing its ability to protect and assist consumers in coordination with its partners while also ensuring that confidential information relating to consumers and businesses is appropriately protected. 4 For this measure, the Bureau reports each instance when information is shared for the same investigation or in other circumstances as one instance, CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 43 Performance goal 1.2.6 / 1.3.6: Where the Bureau determines enforcement action is warranted, file or settle action within two years of opening its investigation. Filing enforcement actions in a timely manner is an important measure of the °TB's effectiveness. The Bureau seeks to balance the need to effectively pursue complex and timeconsuming cases while minimizing any unnecessary delay between conduct and resolution. Timely pursuit of resolutions increases deterrence and provides consumers with greater protections of law. PERFORMANCE MEASURE Where the Bureau determines enforcement action is warranted, file or settle action within two years of opening its investigation TABLE 19: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA Baseline Baseline 65% 65% 65% Actual NA Baseline under development 75% 70% NA NA PROGRESS UPDATE AND FUTURE ACTION Following the determination that enforcement action is warranted, each matter is reviewed at regular intervals to ensure that it is progressing in a timely manner. The CFPB believes the target chosen is reasonable based on the Bureau's experience so far and the experience of other similar enforcement agencies. The CFPB will, however, continue to monitor this to assess whether it is an appropriate way to measure the Bureau's performance going forward. Performance goal 1.2.7 / 1.3.7: Successfully resolve the cases the CFPB files in court and administrative adjudicative proceedings whether by litigation, settlement, issuance of a default judgment, or other means. This measure ensures that the CFPB successfully resolves as many actions as possible while, at the same time, pursuing complex and challenging actions when appropriate, even when success is not assured. 44 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT PERFORMANCE MEASURE The percentage of all cases concluded by the CFPB that were successfully resolved through litigation, a settlement, issuance of a default Judgment, or other means TABLE 20: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 75% 75% 75% 75% 75% Actual 100% 100% 100% 100% NA NA PROGRESS UPDATE AND FUTURE ACTION During FY 2015, the CFPB successfully resolved over 50 cases against corporate or individual entities through litigation, a settlement, issuance of default judgment, or other means. Through CFPB's successfully resolved cases, the Bureau helped secure restitution, principal reductions, cancelled debt, and other relief for consumers. Some of the Bureau's actions also resulted in civil penalties, which are paid to the Bureau's CPF, which is used to compensate harmed consumers and provide financial education. The following is a brief discussion of some of these successfullyresolved matters. The Bureau took action against Sprint Corporation and Verizon Wireless to address their illegally billing wireless consumers hundreds of millions of dollars in unauthorized third-party charges. At the Bureau's request, federal courts ordered Verizon and Sprint to pay a total of $120 million in redress directly to consumers. These actions, which were coordinated with the Federal Communications Commission and state attorneys general, also resulted in $38 million in state and federal fines and penalties. The Bureau took its first enforcement action to protect consumers against illegal overdraft fees, ordering Regions Bank to pay approximately $49 million in consumer relief and a $7.5 million penalty. In partnership with the Navajo Nation, the Bureau helped halt an illegal tax refund scheme run by S/W Tax Loans, Inc. that used tax-preparation franchises to steer low-income consumers, including many citizens of the Navajo Nation, toward high-cost refund-anticipation loans. CFPB s action resulted in a court order of approximately $254,000 in consumer redress and required the defendants to pay $438,000 in civil penalties. Furthermore, the final order bars the individual defendants from offering financial products associated with tax refunds and from investing, financing, or working for any entity that offers such products for a period of five years. Along with authorities in 47 states, the Bureau took action against ,JPMorgan Chase for selling bad credit card debt and illegally robo-signing court documents. The Bureau and the states CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 45 found that Chase sold "zombie debts" to third-party debt buyers, which include accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectible. The Bureau's order required Chase to permanently cease all attempts to collect, enforce in court, or sell more than 528,000 consumers' accounts. Chase was also ordered to pay at least $80 million in cash refunds to consumers, as well as $136 million in penalties to the CFPB and the states. The CFPB took action against Encore Capital Group and Portfolio Recovery Associates (PRA), the two largest debt buyers in the country, for their illegal debt collection activities. The Bureau found that Encore Capital Group and PRA bought debts that were potentially inaccurate, lacking documentation, or unenforceable. Without verifying the debt, the companies collected payments by pressuring consumers with false statements and filing lawsuits using robo-signed affidavits. The CFPB ordered the companies to overhaul their debt collection and litigation practices, stop reselling debts to third parties, and stop collecting on certain debts. As a result of the Bureau's action, Encore will pay up to $42 million in consumer relief and PRA will pay $84 million. Encore and PRA will also pay penalties of $11) million and $8 million, respectively. Performance goal 1.2.8 / 1.3.8: Successfully resolve the fair lending cases the CFPB files in court and administrative adjudicative proceedings, whether by litigation, settlement, issuance of a default judgment, or other means. When the Dodd-Frank Act created within the CFPB an Office of Fair Lending and Equal Opportunity, it set forth as one of that Office's functions the enforcement of Federal fair lending laws, including ECOA and HIVIDA. The CFPB seeks to successfully resolve as many fair lending actions as possible while, at the same time, pursuing complex and challenging actions when appropriate, even when success is not assured. PERFORMANCE MEASURE The percentage of all fair lending cases concluded by the CFPB that were successfully resolved through litigation, a settlement, issuance of a default judgment, or other means TABLE 21: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 75% 75% 75% 75% 75% Actual 100% NA* 100% 100% NA NA * Although the stipulation for the two public enforcement actions was executed in September 2013, the denominator for this goal is zero because the consent orders were executed in October 3013, and the result is "NA". These two matters are counted as successfully resolved in the FY2014 results. 46 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT PROGRESS UPDATE AND FUTURE ACTION In FY 2015, the Bureau successfully resolved, through consent orders, all four fair lending public enforcement actions concluded that year. On May 28, 2015, the CFPB and the DOJ filed a joint complaint against Provident Funding Associates (Provident) alleging discrimination in mortgage lending, along with a proposed order to settle the complaint, which was entered by the court on June 18, 2015. The complaint alleges that from 2006 to 2011, Provident charged over 14,000 African-American and Hispanic borrowers more in brokers' fees than similarlysituated non-Hispanic white borrowers on the basis of race and national origin. The complaint alleges that Provident's conduct constituted discrimination in violation of ECOA. Provident is required under the order to pay $9 million in damages to harmed African-American and Hispanic borrowers. On July 14, 2015, CFPB and DOJ resolved an action with American Honda Finance Corporation (Honda), requiring Honda to put in place new measures to address discretionary auto loan pricing and compensation practices. Honda's past practices resulted in thousands of African-American, Hispanic, and Asian and Pacific Islander borrowers paying higher interest rates than similarly-situated non-Hispanic white borrowers for their auto loans. As part of the resolution, Honda changed its pricing and compensation system to substantially reduce dealer discretion and minimize the risks of discrimination, and is required to pay $24 million in damages to affected borrowers. On September 24, 2015, the CFPB and the DOJ filed a joint complaint against Hudson City Savings Bank (Hudson City)5 alleging unlawful redlining practices in mortgage lending that denied residents in majority-Black-and-Hispanic neighborhoods fair access to mortgage loans. The complaint alleges that from at least 2009 to 2013 Hudson City illegally redlined by providing unequal access to credit to neighborhoods in New York, New Jersey, Connecticut, and Pennsylvania. Specifically, Hudson City structured its business to avoid and thereby discourage residents in majority-Black-and-Hispanic neighborhoods from accessing mortgages. The proposed consent order was entered by the court on November 4, 2015, requiring Hudson City to pay $25 million in direct loan subsidies to qualified borrowers in the affected communities, $2.25 million in community programs and outreach, and a $5.5 million penalty. This represents the largest redlining settlement in history as measured by such direct subsidies. On September 28, 2015, CFPB and DOJ resolved an action with Fifth Third Bank (Fifth Third), requiring Fifth Third to put in place new measures to address discretionary auto loan 5 On September 3o, 2015, the Board of Governors of Federal Reserve System approved M&T Bank Corporation's (M&T) application to acquire Hudson City Bancorp, Inc. and its subsidiary Hudson City Sayings Bank, ES.B, and the merger of Hudson City Savings Bank, F.S.B. with and into M&T's subsidiary, Manufacturers Banking and Trust Company (M&T Bank), with M&T Bank as the surviving institution. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 47 pricing and compensation practices. Fifth Third's past practices resulted in thousands of African-American and Hispanic borrowers paying higher interest rates than similarly-situated non-Hispanic white borrowers for their auto loans. As part of the resolution, Fifth Third will change its pricing and compensation system by substantially reducing discretionary mark ups to minimize the risks of discrimination. The consent orders require that Fifth Third pay $18 million in damages to affected borrowers. 48 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT GOAL 2 Empower consumers to live better financial lives TABLE 22: Budget for goal 2, by program (S in the millions) Goal 2 Office of the Director FY 2015 FY 2016 FY 2017 $1.4 $1.2 $1.4 $0.3 $0.3 Operations Operations - Consumer Response $50.8 $59.3 $63.7 Consumer Education and Engagement $22.4 $38.1 $39.1 Legal $1.0 $1.1 $1.2 External Affairs $1.0 $1.2 $1.4 Other Programs $0.1 $0.2 $0.1 $31.2 $30.2 $32.7 $107.9 $131.6 $139.9 Centralized Services Total CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 49 Introduction FIGURE 2: Percentage of American families affected by select financial products, by type of asset" 93% 92% 100% 75% 50% 16% 25% 0% Transaction accounts FIGURE 3: Certificates of Deposit Percentage of American families affected by select financial products, by type of debt 75% 80% 60% Any financial asset 47% 46% 39% 40% 20% Debt secured by primary residence Installment loans Credit card balances Any debt The CFPB works to empower consumers with the knowledge, tools, and capabilities they need in order to make better-informed financial decisions by engaging them in the right moments of their financial lives, when they are most receptive to seeking out and acting on assistance. To that end, the CFPB will develop and maintain a variety of tools, programs, and initiatives that provide targeted, meaningful, and accessible assistance and information to consumers at the moment they need it both directly and through others who reach consumers directly. 6 Federal Reserve Board, "Changes in U.S. Family Finances from pow to :sow: Evidence from the Survey of Consumer Finances," Federal Reserve Bulletin, Vol 98, No 2, June 2012, pp. 28, S w tinvisili vsvrs ("mg /pub,- / hi LI] I iiMoimpil Usti Pond I (Last viewed 8/23/2012) 50 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT FIGURE 4: Percentage of American families obtaining information about borrowing or investing through various sources' Magazines, newspapers. other media Investing Lawyers, accountants and other financial advisors Borrowing Calling around Material in the mail Bankers, brokers, and other sellers of financial services Internet Friends relatives, associates 0% 10% 20% 30% 40% 50% Differences in financial education, capabilities, and skills complicate efforts to encourage better informed financial decision-making. Consumers represent diverse populations with diverse financial needs, choices, and challenges, and they seek out information about financial choices using a variety of channels. Therefore, the CFPB must be flexible and adaptable in addressing the highly diverse needs of American consumers. In addition to analyzing consumer complaints and pursuing financial research and training, the Bureau can accomplish this by ensuring that the Bureau's workforce reflects the faces, ideas, backgrounds, and experiences of the American public. The CFPB will reach its second goal by achieving the following two outcomes: 1. Collect, monitor, respond to and share data associated with consumer complaints and inquiries regarding consumer financial products or services. Outcome 2.1: Help consumers understand the costs, risks, and tradeoffs of financial decisions; build trusted relationships that are interactive and informative to help consumers take control of their financial choices to meet their own goals; and raise the effectiveness of those who provide financial education services to increase financial literacy. Outcome 2.2: 7 Federal Reserve Board, "Changes in U.S. Family Finances from 20u7 cului Evidence from the Survey of Consumer Finances," Federal Reserve Bulletin, Vol 98, No 2, June 2012, pg.19, Uv‘‘JudcnilE cscr‘c.w ill:2012/plii:SH12.1)(11 (Last viewed 8/23/2012) CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 51 Outcome 2.1 Collect, monitor, respond to and share data associated with consumer complaints and inquiries regarding consumer financial products or services. Outcome leader: Associate Director, Operations Background The CFPB provides direct assistance to consumers, in real time, through Consumer Response. Consumer Response hears directly from consumers about the challenges they face in the marketplace, brings their concerns to the attention of companies, and assists in addressing their complaints. Complaints inform the Bureau about business practices that may pose risks to consumers and help with the CFPB's work to supervise companies, enforce Federal consumer financial laws, and write better rules and regulations. In FY 2015, Consumer Response handled approximately 265,500 complaints. TABLE 23: Top consumer complaints in FY 2015 Complaint Category Approximate number of complaints Debt Collection 84,700 Credit Reporting 54,300 Mortgage 50,400 Credit Card 20,800 Bank Account or Service 20,700 Consumer Loan 13,000 Student Loans 7,500 Payday Loan 5,700 Money Transfers 2200 , Prepaid 2,100 Other Financial Services 1,700 52 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT TABLE 24: Top 3 issues for top 5 products in FY 2015 Issue type Number of complaints Debt Collection Continued attempts to collect debt not owed 34,000 Communication tactics 15,200 Taking or threatening an illegal action 12,600 Credit Reporting Incorrect information on credit report 43,400 Credit reporting company's investigation 4,200 Unable to obtain report or score 3,300 Mortgage Problems when unable to pay 22,700 Making payments 18,600 Applying for the loan 4,300 Credit Card Billing disputes 3,300 Other 2,600 Identity theft / Fraud / Embezzlement 2,300 Bank Account or Service Account management 8,800 Deposits and withdrawals 5,400 Sending or receiving payments 2,700 Consumer Response handled approximately 265,500 consumer complaints across all products in FY 2015—about 10% more complaints than in FY 2014. Consumers submitted approximately 84,700 debt collection complaints and 54,300 credit reporting complaints, making those the most complained about products and services in FY 2015. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 53 Strategies and investments The following strategies and investments have been put in place to help the CFPB achieve outcome 2.1. Strategies • Collect, analyze, and leverage Consumer Response operational data to enable continuous improvement of the Bureau's services to consumers. • Develop a seamless approach to delivery of appropriate and useful Consumer Response data within the CFPB and to the public so that information is timely, understandable, and maintains consumer privacy. • Automate key internal operational systems, particularly the intake and routing process, in order to effectively scale Consumer Response operations. • Maintain a robust training and development program to support Consumer Response operations as volume increases. Investments PERSONNEL Hire additional staff to support intake, investigations, and data analysis in order to review, route, and address consumer complaints. CONSUMER RESPONSE SYSTEM AND CONTACT CENTER SUPPORT Make system investments in order to support the expansion of complaint handling capacity, improve the ease of use of the consumer and company portals, continue developing a scalable, risk-based approach to addressing consumer complaints, and make complaint data available to stakeholders through portals and via expansions to the existing public Consumer Complaint Database. CONSUMER RESPONSE OPERATIONAL AND PROGRAM SUPPORT Assist ongoing internal work to execute and refine its operations strategy, focusing on operational support, performance management support, and performance improvement services. CONSUMER RESPONSE SYSTEM-COMPLAINT ANALYTICS Complaint analytics will enable the Bureau to classify and review complaints, scrub sensitive 54 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT information from complaints, weigh risks related to complaints for prioritization, detect emerging trends, analyze patterns, and conduct similarity analyses to glean more insights from complaints to support Bureau work. OPTIMIZE CFPB COMMUNICATION AND CONSUMER ENGAGEMENT CHANNELS Improve the user experience according to the consumer's needs, whether related to submitting a complaint, accessing complaint data, or learning about managing important financial decisions. Performance goals The CFPB will assess the progress on achieving outcome 2.1 through the following three performance goals: Performance goal 2.1.1: Decrease time between receiving and closing a complaint. Facilitate efficient handling of a consumer complaint throughout the complaint process. PERFORMANCE MEASURES8 Intake cycle time TABLE 25: Ensure complaints are routed to companies for response in a timely manner FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 3 days 3 days 2 days 2 days 2 days Actual 7 days 1 day 1 day 1 day NA NA Company cycle time TABLE 26: Ensure companies provide timely responses to consumer complaints FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 15 days 15 days 15 days 15 days 15 days Actual 14 days 12 days 12 days 11 days NA NA 8 In the 2014 Performance Plan and Report, the Investigations Cycle Time performance measure was phased out due to increased complaint volume, which necessitated an operational shift in Consumer Response. Beginning in FY 2015 the Bureau will prioritize and focus on the continued success of its efforts surrounding complaint intake, company response, and consumer review cycle times. Consumer cycle time TABLE 27: Ensure consumers have adequate time to review company responses FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 30 days 30 days 30 days 30 days 30 days Actual 16 days 4 days 2 days 1 day NA NA PROGRESS UPDATE AND FUTURE ACTION Complaint volume increased about to% from approximately 240,600 complaints in FY 2014 to approximately 265,500 complaints in FY 2015. Consumer Response continued to refine its complaint handling processes and systems in FY 2015, increasing efficiencies through process improvements and by adding automation where possible and improving its overall complaint handling operation. Performance goal 21.2: Facilitate the timely response to consumer complaints by companies. The CFPB facilitates timely response to consumer complaints by using a dedicated company portal to route complaints to companies for response. The company portal is the primary interface between the CFPB and companies. It is an online electronic delivery system that provides secure access and allows companies to view and respond to consumer complaints. PERFORMANCE MEASURE TABLE 28: The percentage of complaints routed through the dedicated company portal FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 85% 87% 89% 91% 93% Actual 83% 87% 91% 94% NA NA PROGRESS UPDATE AND FUTURE ACTION In FY 2015, the CFPB established company portal access and trained staff of approximately 950 companies to respond to complaints on the portal and made routing improvements to exceed the target. In FY 2016, the Bureau will continue its work to ensure companies can access and use the company portal to provide timely responses to consumer complaints. 56 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Performance goal 2.1.3: Expand capacity to handle consumer complaints. Consumer complaints inform the Bureau about business practices that may pose risks to consumers and help with the CFPB's work to supervise companies, enforce Federal consumer financial laws, and write better rules and regulations. PERFORMANCE MEASURES TABLE 29: Number of consumer complaints handled FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 125,000 200,000 225,000 275,000" 300,000 Actual 74,000 144,000 240,600 265,500 NA NA * The FY 2016 target was Increased by 15,000 compared to the FY 2014 annual performance plan and report based on FY 2015 actual results TABLE 30: Percentage of complaints received via web channel FY 2012 FY 2013 FY Target NA NA NA Actual NA NA NA 2014 FY 2015 FY 2016 FY 2017 66% 68% 70% 70% NA NA PROGRESS UPDATE AND FUTURE ACTION The Bureau expanded its public Consumer Complaint Database, which was initially launched in June 2012 and populated with credit card complaints, to include complaints about additional products. In FY 2013, the Bureau added complaint data about mortgages, bank accounts and services, private student loans, other consumer loan complaints, credit reporting, and money transfer complaints as well as fields for sub-issue and state. In November 2013, debt collection complaints were added to the database. Payday complaints were added to the database in July 2014, and in January 2015 the Bureau added prepaid cards, other consumer loans @awn and title loans), and other financial services to the database. In June 2015, the Bureau began publishing consented-to consumer complaint narratives and optional public company responses for complaints submitted on or after March 10, 2015 with consumer opt-in consent. Accepting complaints about a broad range of consumer financial products and services and the growing public awareness of the Bureau's tools and resources likely contributed to exceeding the total volume target again in FY 2015. The Bureau will continue to expand its complaint handling capacity to accept other products and services under its authority over time. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 57 Outcome 2.2 Help consumers understand the costs, risks, and tradeoffs of financial decisions; build trusted relationships that are interactive and informative to help consumers take control of their financial choices to meet their own goals; and raise effectiveness of those who provide financial education services to increase financial literacy. Outcome leader: Associate Director, Consumer Education and Engagement Background The CFPB works to provide consumers with the information, knowledge, skills and financial capability needed to make well-informed decisions that serve their own life goals. The Bureau also works to enhance the financial knowledge and capability of the country as a whole. In addition to improving overall financial capability, the CFPB focuses on addressing the unique financial challenges faced by four specific populations. Students The benefits of higher education are well documented. Four-year 27.5 college graduates experience a number of economic benefits over MILLION high school graduates, including higher median earnings and lower Population enrolled in colleges and unemployment rates. Evidence indicates that these disparities universities' are growing.10 Demand for higher education and college financing are at all-time highs. Over the past decade, the size of the student loan market has been increasing steadily At over $1.2 trillion in loans outstanding, the market for student loans is now the second largest component of household debt after mortgages." In 2015, the Bureau noted that this market continues to show elevated levels of borrower distress, 9 U.S. Department of Education, National Center for Education Statistics, 2014 Digest of Education Statistics: Total 12-month enrollment in degree-granting postsecondary institutions, by control and level of institution and state or jurisdiction: 2011-12 and 2012-13, available at https://nces.ed.guv/prugrams/digest/d14/tables/dtm_308.10.asp (Last viewed 11/04/2015) to College Board Advocacy and Policy Center, "Education Pays 2010 In Brief: The Benefits of Higher Education for Individuals and Society," 2010 ,http://trends.collegeboard.org/sites/default/files/bricf/education-pays-2mosin-briel pdf(Last viewed 2/14/2013) it The Department of Education and Consumer Financial Protection Bureau, "Private Student loans Repot July http://www.consumerfinance.gov/reports/private-student-loans-report/ (last viewed 9/10/12) 20, 2012, 58 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT observing that more than one in four student loan borrowers are past due or in default.'2 Older Americans Aging poses a number of unique financial challenges. Older 57 Americans face complicated decisions about finances, retirement, MILLION and long-term planning. On average, Americans reaching age 65 Population age 62 and older' today will live to about age 85:4 Consequently, consumers today will likely need sufficient income and savings to cover zo years or more in retirement. In addition, retirement years may be more expensive than retirees expect as many will incur increased health and housing expenses in their later years,'s and many carry mortgages and other debts into retirement:6 Furthermore, with the decline in coverage from traditional pension plans that pay a regular monthly payment, Social Security is the only guaranteed monthly income for an estimated 69 percent of older consumers:7 Servicemembers The CFPB believes servieemembers should be able to accomplish 22 MILLION their mission without worrying about illegal or harmful financial practices. Military life has extra challenges with powerful financial Servicemember population (including repercussions for uniformed military personnel, veterans, military veterans) retirees, and their families. The Office of Servicemember Affairs focuses on addressing these financial challenges through educational initiatives, complaint monitoring, and partnering with other Federal and state agencies on consumer protection measures for the military. 12 Consumer Financial Protection Bureau, Student Loan Servicing (September 2015), available at http://files.consumerfinance.gov/f/201509_cfpb_student-loan-servicing-reportpdf. 13 U.S. Census Bureau, 2014 American Community Survey, Table DPo5 ACS Demographic And Housing Estimates. Available at http://factfindencensus.govibkmk/table/1.o/en/ACS/14_1YR/DPo5 14 See, Social Security Administration, Calculators: Life Expectancy (2015), at http://www.ssa.gov/planners/lifeexpectancy.html (last visited October 1, 2015). 15 See e.g. Sudipto Banerjee, How Does Household Expenditure Change With Age for Older Americans?, EBRI Issue Brief, No. 9 (Sept. 201.4), http://www.ebri.org/pdf/notespdf/Notes.Septig.EldExp-Only.pdf. 16 See CFPB, Snapshot of older consumers and mortgage debt (May 2014), http://files.consumerfinance.gov/D201405_cfpb_snapshot_older-consumers-mortgage-debtpdf 17 CFPB, Issue Brief Social Security claiming age and retirement security (Nov. 2015), at 7, available at http:// files, consumer finance. gov/f/2 01511_ clph_i ssue -brief-social - security- clai 'fling-age - and-retirement-security. p dl IS National Center for Veterans Analysis and Statistics "Veteran Population Projects; FY 2000 to FY 2036( October 2010, http://www.va.govivetdataidocs/QuickFacts/population_quickfacts.pdf (last viewed 8/30/2012) CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 59 Low-income and economically vulnerable The CFPB focuses on identifying approaches that help this population achieve economic stability and works to ensure that the financial marketplace works for all consumers, including those who have been traditionally underserved. 60.5 MILLION Unbanked or underbanked adults12 46.7 MILLION Strategies and investments Live below the official poverty line20 The following strategies and investments have been put in place to help the CFPB achieve outcome 2.2. Strategies • Provide tools and information to the public to help individuals make decisions about money that will serve their own life goals. • Analyze consumer financial experiences and complaints to help shape policy and practices to make the financial environment safer and more beneficial for consumers. • Collaborate with third parties to encourage the development of effective financial skills and habits by adding financial capability training to other types of social service programs. • Strengthen the impact and effectiveness of K-12 and adult financial education by fostering takeup of best practices, facilitating partnerships, and identifying gaps and seeking to fill them. Investments PERSONNEL Maintain strong, expert staff to develop and implement financial education, consumer engagement, community partnerships, policy, and research activities. CONSUMER SERVICES AWARENESS BUILDING This investment allows the CFPB to increase consumer awareness of the CFPB's tools and resources. Through this investment, the CFPB is able to reach the public directly to highlight helpful services and information such as Ask CFPB, Consumer Response, Paying for College, and Owning a Home. 19 Federal Deposit Insurance Corporation, "2013 National Survey of Unbanked and Underbanked Households," 2014, https://www.fdic.gov/householdsurvey/coigexecsumm.pdf 20 US Census Bureau Income, Poverty and Health Insurance Coverage in the United States: 2014 https://www. census.gov/content/dam/Census/library/publications/eot5/demo/p6o-252.pdf 60 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT CONSUMER EDUCATION INITIATIVES Continue to develop consumer education initiatives on specific topics with targeted information to communicate financial education information to a diverse range of audiences. The topics include education about mortgages, retirement, and other money issues. The approaches include delivery of financial education through libraries and other intermediaries. UNDERSERVED AND SPECIAL POPULATIONS PROGRAMS AND OUTREACH Support demonstration or pilot projects for improving financial decision-making for underserved and special populations, including youth, low-income Americans, older Americans, servicemembers and veterans, and other specific populations. Continue to develop and distribute financial education and empowerment information for various populations including seryicemembers and veterans, students, older Americans, people who are lowincome, or economically vulnerable including people with disabilities, and other specific consumer populations. The goal of distributing these materials is to provide information to special populations and the intermediaries that serve them to improve the financial security of consumers. CONSUMER EXPERIENCE PROGRAM Enable the CFPB to continue to research, design, develop, launch, and to continually optimize consumer-facing products available through consumerfinance.gov, and to execute strategies to increase awareness of and engagement with these products. The Consumer Experience Program provides useful tools with actionable advice to consumers navigating the most difficult and significant financial decisions they face in the marketplace, including paying for college and owning a home. The CFPB will optimize consumer experience through the use of various communication channels to support the goal of improving consumers' financial education and ability to manage important financial decisions to meet their own life goals. YOUR MONEY, YOUR GOALS The Bureau has launched the Your Money, Your Goals program to help consumers manage their finances by identifying financial goals, creating savings plans, and managing debt. We have developed toolkits to help staff in social services and legal aid organizations, community volunteers, and worker organizations to have the money talk" in ways that work within their service delivery models. In FY 2014 and FY 2013, the Bureau developed partnerships with to national, state, tribal, and local organizations and trained over 6,000 frontline social services staff across their networks. Additional investments supporting this outcome can be found under Outcome 3.2. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 61 Performance goals The CFPB will assess the progress on achieving outcome 2.2 through the following three performance goals: Performance goal 2.21: Significantly increase targeted outreach activities and digital education materials in order to engage consumers at the right moment. The CFPB works to arm consumers with the knowledge, tools, and capabilities they need in order to make better informed financial decisions that serve their own life goals by engaging them at the right moments of their financial lives, in moments when the consumer is most receptive to seeking out and acting on assistance. To that end, the CFPB offers and continues to develop a variety of tools, programs, and initiatives that provide targeted, meaningful, and accessible assistance and information to consumers around life moments that correspond to major financial choices and other money decisions with significant life consequences. PERFORMANCE MEASURES Targeted populations or organizations directly serving targeted populations reached by digital content, decision tools, educational materials and resources?' TABLE 31: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 808,114 5,000,000 6,500,000 7,500,000 8,500,000 Actual 404,057 1,903,417 5,600,000 6,804977 NA NA TABLE 32 Percentage of new users to ConsumerFinance.gov FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA NA NA 65% 65% 65% Actual NA 61% 60% 67% NA NA 21 The actuals and targets represent unique web visitors only. As the CFPB expands data collection capabilities on outreach activities, additional content will be included in this measure. 62 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT TABLE 33 Fulfillment orders for print materials" FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 NA NA NA 1,500,000 1,750,000 2,000,000 Actual NA NA NA 3,184,250 NA Target NA PROGRESS UPDATE AND FUTURE ACTION In FY 2015, the CFPB continued to serve consumers with just-in-time financial information through Ask CFPB, an online database of consumers' common questions around financial products and services. The CFPB launched a major release of Owning a Home, an online suite of information and tools designed to encourage and support mortgage shopping and to help consumers understand their choices and decision points as they select a better mortgage. The CFPB also made investments in building awareness of this and other Bureau resources that will maximize the awareness and value of the Bureau's various products for consumers. In FY 2016, the CFPB will continue expanding and improving its existing suite of consumer experience products, e.g., by launching a Planning for Retirement tool, and updating its Paying for College and Ask CFPB tools. The Bureau's strategy to increase public awareness and use of its tools and resources will be supported by investments to maximize their reach and impact. Performance goal 2.2.2: Improve the understanding of successful financial decision-making approaches by identifying key success factors in financial health. The CFPB believes that financial education's primary goal is to help consumers take the steps necessary to make choices that will improve their financial well-being. However, very little empirical research has been conducted regarding what variables measure financial health in terms of real-world outcomes for consumers. By defining these variables through data-driven research, the Bureau will be able to define what knowledge and skills are associated with financial well-being. This research will inform the Bureau's ongoing efforts to identify, highlight, and spread effective approaches to financial education. 22 Print materials available through the CFPB GPO fulfillment page (http:/promotions.usa.govicfphpubs.html). CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 63 PERFORMANCE MEASURE TABLE 34: Tools created to identify key success factors in financial education Target Actual FY 2012 NA NA FY 2013 Identify variables that are likely to be key drivers of financial health Identified the variables that are likely to be key drivers of financial health FY 2014 Develop and test metrics (questions) that accurately measure these variables Developed and began testing metrics to measure financial well-being and associated variables FY 2015 Develop and implement framework for integration into Consumer Education and Engagement Activities; Complete testing financial health metrics Issued consumer-centric definition of financial well-being, finalized reliable and valid survey scale and scoring procedure for measurement of financial well-being for adults. Developed and integrated into Consumer Education and Engagement Activities a framework of concepts derived from insights gathered through financial well-being research activities FY 2016 Use metrics to establish a baseline of U.S. consumer financial well-being and begin testing hypotheses of identified success factors in consumer financial decisionmaking NA FY 2017 Complete baseline measurement of U.S. consumerfinancial well-being and testing of hypotheses of identified success factors in consumer financial decisionmaking NA PROGRESS UPDATE AND FUTURE ACTION The Bureau's work toward the performance goal is on track, with expected deliverables and interim targets being met according to the anticipated project timeline. In FY 2013, the Bureau conducted a broad array of research to identify what specific knowledge, behavior, and personal traits are likely to predict financial well-being for American consumers. This included a thorough formal review of the most relevant research literature; designing, completing, and analyzing extended one-on-one interviews with a socioeconomically and 64 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT geographically broad sample of working-age and older Americans and professional financial practitioners; and soliciting and collecting collaborative input and peer discussion from academic, policy, and practicing experts. Based on this, the CFPB developed a preliminary, first-of-its-kind, comprehensive definition of financial well-being that speaks to the goals and perspectives of consumers and has identified a set of specific variables that are likely to be key drivers of financial well-being. In FY 2014, the CFPB developed and began testing metrics (measurement tools) that accurately measure consumer financial well-being and associated concepts. The testing of the measurement tools was completed in 2015. These measurement tools will allow the CFPB and others to more accurately assess consumer financial health, target educational efforts, test hypotheses about key drivers of financial health, and assess the effectiveness of different approaches to improving consumer financial well-being. Also in FY 2014, the CFPB began an effort to understand when and how children and youth develop the skills, attitudes, and other characteristics identified in 2013 likely to be key drivers of financial well-being. The early findings from this work have been shared with the Financial Literacy and Education Commission and have informed the CFPB activities to encourage and support parents and caregivers in talking to their children about money. In FY 2015, the CFPB's Division of Consumer Education and Engagement continued to assess how to integrate this project's findings and new measurement tools into other consumer education and engagement initiatives. This includes the Division's strategic planning activities and the Bureau's research projects, direct-to-consumer resources, and recommendations for intermediaries to encourage the spread of effective approaches to the financial education field. This effort is detailed under "Underserved and Special Populations Research" in the Investments section of Outcome 3.2. The Bureau also finalized a valid and reliable survey scale to measure the financial well-being of adult consumers and completed a thorough planning process. The next phase of work will be to conduct a nationally-representative survey to measure the financial well-being of American consumers and quantitatively test hypotheses about the specific factors that support higher levels of financial well-being. In FY 2016, the Bureau will use the finalized metrics to measure baseline consumer financial wellbeing and to begin testing hypotheses of success factors in consumer financial decision-making identified in FY 2013, using metrics created in FY 2014 and tested and finalized in FY 2015. The CFPB will promote the findings from this research in FY 2016 and use the findings over time to continue to identify and promote the most effective approaches that support better outcomes for consumers. Performance goal 2.2.3: Promote fair lending compliance and education by leading and participating in fair lending outreach activities. As one of its core functions, the Office of Fair Lending and Equal Opportunity is responsible CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 65 for "working with private industry fair lending, civil rights, and consumer and community advocates on the promotion of fair lending compliance and education" (Dodd-Frank Act, Section 1013(c)(2)(C).) The CFPB conducts fair lending outreach activities through numerous channels, such as issuing compliance bulletins targeted to industry; delivering speeches and presentations on fair lending and access to credit matters to industry, consumer and community groups, and others; and participating in smaller meetings and discussions with external stakeholders. PERFORMANCE MEASURE TABLE 35: Number of outreach activities on fair lending and access to credit FY 2014 FY 2015 FY 2016 FY 2017 55 35 40 40 40 56 66 60 NA NA FY 2012 FY Target NA Actual 51 2013 PROGRESS UPDATE AND FUTURE ACTION In FY 2015, the Office of Fair Lending and Equal Opportunity executed against its mission to promote fair, equitable, and nondiscriminatory access to credit for individuals and communities by leading and participating in 6o fair lending outreach activities. Through numerous speeches, panel remarks, presentations, webinars, and smaller discussions on fair lending matters, the Bureau reached out to various stakeholders and engaged with consumers nationwide through public field hearings, listening events, roundtables, and town halls, and through the Bureau's website, consumerfinance.gov. These engagements allowed the Bureau both to explain existing and emerging fair lending issues and risks to external stakeholders and the public and to inform the Bureau's fair lending oversight work. In FY 2015, the CFPB issued two fair lending-related bulletins. On November 18, 2014, the CFPB issued a bulletin providing guidance to help lenders avoid prohibited discrimination against consumers receiving Social Security disability income (CFPB Bulletin 2014-03). The bulletin reminds lenders that requiring unnecessary documentation from consumers who receive Social Security disability income may raise fair lending risk, and calls attention to standards and guidelines that may help lenders comply with the law. On May 11, 2015, the Bureau issued a bulletin providing guidance to help lenders avoid prohibited discrimination against applicants whose income includes vouchers from the Section 8 Housing Choice Voucher (HCV) Homeownership Program (CFPB Bulletin 2015-02). The bulletin reminds lenders that discriminating against a consumer because some or all of their income is from a public assistance program may violate federal fair lending protections. 66 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT GOAL 3 Inform the public, policy makers, and the CFPB's own policymaking with datadriven analysis of consumer finance markets and consumer behavior TABLE 36: Budget for goal 3, by program (.5 in the millions) Goal 3 Office of the Director FY 2015 FY 2016 FY 2017 $1.4 $1.2 $1.3 $0.3 $0.3 $3.9 $4.8 $5.8 $22.0 $29.9 $28.9 $0.8 $1.0 Operations Consumer Education and Engagement Research, Markets, and Regulation Supervision, Enforcement, and Fair Lending Legal $1.4 $1.3 $1.4 External Affairs $1.0 $1.2 $1.4 Other Programs $0.2 $0.4 $0.3 $16.5 $16.4 $17.0 $46.4 $56.3 $57.4 Centralized Services Total CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 67 Introduction Understanding how consumer financial markets work, the avenues for innovation in financial products and services, and the potential for risk to consumers is a core component of the CFPB s mission. The CFPB's aim is to ground all of its work — from writing rules and litigating enforcement actions to its outreach and financial literacy efforts — in the realities of the marketplace and the complexities of consumer behavior. This requires use of data; strong partnerships within the CFPB and externally to ensure that the Bureau continues to monitor markets effectively; technology tools and employees with the skills and capabilities needed to analyze data and distill insights. The CFPB's research will support building an understanding of the markets the Bureau regulates and the nature of consumer behavior in these markets. It will also support the consideration of the potential benefits and costs of the CFPB's work to consumers and institutions, including effects on access by consumers to consumer financial products or services. In the data used for its analyses, the Bureau will work to ensure that strong protections are in place around personally identifiable information. Datasets will generally aggregate information such that no information is directly identifiable, and research/analysis products resulting from such data will use similarly de-identified information as appropriate. The Bureau treats the information collected from participating persons and institutions consistently with our confidentiality regulations, and all data and analyses are subject to legal and privacy review prior to their release. The CFPB will reach its third goal by achieving the following two outcomes: 1. Outcome 3.1.: Monitor markets and conduct research to surface financial trends and emergent risks relevant to consumers. 2 68 Outcome 3.2: Articulate a research-driven, evidence-based perspective on consumer financial markets, consumer behavior, and regulations to inform the public discourse, inform Bureau thinking on priority areas, identify areas where Bureau intervention may improve market outcomes, and support efforts to reduce outdated, unnecessary, or unduly burdensome regulations. CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Outcome 3.1 Monitor markets and conduct research to surface financial trends and emergent risks relevant to consumers. Outcome leader: Associate Director, Research, Markets and Regulations Strategies and investments The following strategies and investments have been put in place to help the CFPB achieve outcome 3.1. Strategies • Acquire, collect, and maintain the data necessary to properly monitor select markets for emerging risks and positive innovations. • Coordinate with other federal agencies, including the Office of Financial Research, to ensure the most efficient use of data and avoid duplication. • Build and maintain technological infrastructure required to support market intelligence through the integration of diverse internal and external data. Investments PERSONNEL Hire additional experts in particular industries as well as additional economists and other researchers. CREDIT CARD DATABASE Maintain a credit card database, including both summary and de-identified loan-level data, covering over 8o% of the credit card marketplace. This investment will allow the Bureau to conduct empirically sound research essential to informing data-driven decisions throughout Bureau activities. OTHER MARKET DATA Acquire and maintain various commercially available market datasets in order to support research and regulations activities. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 69 NATIONAL MORTGAGE DATABASE (NMDB) Develop and maintain database that will provide the Bureau with a sample of mortgages that are representative of up to 95% of the market. HMDA DEVELOPMENT AND IMPLEMENTATION Support a concept-of-operations study and development of future-state functional requirements in consideration of a potential redesign of the current HMDA framework. HMDA DATA PROCESSING Development for collecting and processing HMDA data. This process is currently managed by the Federal Reserve Board for the CFPB and certain other agencies, and costs are shared by members of the Federal Financial Institutions Examination Council and HUD. This investment supports data-driven research, regulations, and fair lending activities across the Bureau. Performance goal The CEPS will assess the progress on achieving outcome 3.1 through the following performance goal: Performance goal 3.1.1: Monitor the credit card and mortgage markets through data. The credit card and mortgage markets are both critical to consumers. Having quantitative data on both markets makes it easier for the Bureau to monitor trends and implications for both consumers and providers. These data also strengthen the evidentiary basis for Bureau policymaking. PERFORMANCE MEASURES TABLE 37: Percentage of the credit card market monitored through data FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 80% 80% 80% 85% 83% Actual 77% 82%* 80%"* 82% NA NA * The actual percentage of the credit card market monitored through data reported for FY 2013 has been adjusted from the FY 2014 annual performance plan and report to reflect a more accurate estimation of the overall consumer credit market in this year ** The actual percentage of the credit card market monitored through data reported for FY 2014 has been adjusted from the FY 2014 annual performance plan and report to reflect a more accurate estimation of the overall consumer credit market in this year 70 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT TABLE 38: Percentage of the mortgage origination and servicing markets monitored through data FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 95% 95% 95% 95% 95% Actual 95% 90% 90% 90% NA NA PROGRESS UPDATE AND FUTURE ACTION The reported actual FY 2015 level of performance for data coverage of the mortgage market is 90%, which is lower than the reported FY 2015 target coverage of 95%. The Bureau reports the 90% figure for FY 2015 based on the mortgage market coverage of the HM DA data. The CFPB does have supplementary data from the Nationwide Mortgage Licensing System and Registry and other proprietary mortgage data as well. However, without doing the necessary matches and analysis through the Bureau's planned NMDB, the Bureau chose to report the HM DA-based estimate alone. The Bureau plans to apply a standard method for assessing data coverage of the mortgage market. The Bureau also uses other available resources for monitoring the mortgage markets, and supplements these sources with two commercial services for data regarding originations and servicing. One dataset provides servicing data on loans serviced by the largest servicers in the US (just over 53% of outstanding mortgages); another dataset provides information on loans extant in private label securities. In FY 2013, the CFPB began a partnership with the Federal Housing Finance Agency (FHFA) to build the NMDB. This work is expected to continue in FY 2016. For this database, the FHFA has procured (from a credit reporting agency) credit information with respect to a random and representative sample of the mortgages currently held by consumers. The Bureau expects to begin receiving data from the NMDB in FY 2016. The NMDB will be the first dataset that will provide a truly representative sample of mortgages so as to allow analysis of mortgages over the life of the loans, including first and second liens and home equity loans. In all of the data used for its analyses, the Bureau will work to ensure that strong personal privacy protections are in place. The Bureau will generally obtain datasets in a format such that no information is directly identifiable and research/analysis products resulting from such data will use similarly de-identified information. The Bureau treats the information collected from participating persons and institutions consistently with our confidentiality regulations and all data and analyses are subject to internal Bureau legal and privacy review. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 71 Outcome 3.2 Articulate a research-driven, evidence-based perspective on consumer financial markets, consumer behavior, and regulations to inform the public discourse, inform Bureau thinking on priority areas, identify areas where Bureau intervention may improve market outcomes, and support efforts to reduce outdated, unnecessary, or unduly burdensome regulations. Outcome leader: Associate Director, Research, Markets, and Regulations Strategies and investments The following strategies and investments have been put in place to help the CFPB achieve outcome 3.2. Strategies • Collect and analyze data in order to improve understanding, regulation, and functioning of consumer financial markets and behavior. • Develop and maintain the tools and technology required to effectively, efficiently, and securely disseminate data and research for internal and external audiences. • Institutionalize cross-Bureau collaboration to ensure the Bureau's work is informed by the CFPB's internal research and expertise. • Help to make the market work better for special populations such as students, older Americans, servicemembers and veterans, and low-income and economically vulnerable consumers through selected policy work. Investments PERSONNEL Expand research capacity in order to achieve Bureau-wide priorities, including the on-boarding of term personnel (via the Intergovernmental Personnel Act) from academic institutions and other governmental research offices. PRIMARY DATA COLLECTION Conduct primary data collections through field tests, controlled trials in laboratory settings, and 72 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT surveys to inform policy-making and build foundational knowledge about how consumers make financial decisions. Analyses from primary data are foundational for the Bureau's policy work and also contribute to evidence-based market research. The following investments support Outcome 3.2 and Outcome 2.2: UNDERSERVED AND SPECIAL POPULATIONS RESEARCH Identify unique factors that influence financial capabilities for youth and issues that particularly affect low-income consumers, other underserved populations, and older Americans, as well as evidence-based practices for effective financial education and financial capability or empowerment. Use this knowledge within the Bureau, and where appropriate, spread it among relevant participants in the field. FINANCIAL EDUCATION RESEARCH Develop and test metrics that effectively measure relevant consumer financial knowledge, behavior, and well-being. The results of these studies will help the CFPB, other Financial Literacy and Education Commission agencies, and the broader financial education field to develop and support policies and programs that lead to better financial outcomes, skills, and habits for American consumers. LOOKBACKS Section 1022(d) of the Dodd-Frank Act requires the CFPB to assess each significant rule the Bureau adopts under Federal consumer financial law and publish a report of the assessment within five years of the effective date of such rule. The assessment is intended to address, among other factors, the rule's effectiveness in meeting the purposes and objectives of Title X of the Dodd-Frank Act, and the specific goals the Bureau states for the rule. Performance goal The CFPB will assess the progress on achieving outcome 3.2 through the following performance goal: Performance goal 3.2.1: Increase the number of reports produced about specific consumer financial products, markets, or regulations and on consumer decision-making. The Bureau conducts qualitative and quantitative research to deepen understanding of consumer decision-making; consumer financial products and markets; and the effects of consumer financial regulations and policies. Periodically, the Bureau publishes reports of its research, including CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 73 informational white papers, non-annual Reports to Congress, and "Data Point" reports. Bureau and independent research are intended to provide the Bureau and other policy-makers with a stronger evidentiary foundation for policy-making. They are also intended to inform the public and enhance the public's participation in policy-making. PERFORMANCE MEASURE Bureau reports produced about specific consumer financial products, markets, or regulations and on consumer decision-making TABLE 39: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target 4 5 5 5 6 6 Actual 2 4 9 6 NA NA PROGRESS UPDATE AND FUTURE ACTION Preparing reports is central to the Bureau's commitment to evidence-based policy-making. The Bureau's Division of Research, Markets, and Regulations (RMR) issued six reports in FY 2015. These reports are intended to deepen the public's understanding of these issues and provide the Bureau and other policy makers with a stronger factual foundation on which to make policy judgments. RMR released the following notable public reports in FY 2015: • Study of Prepaid Account Agreements (November 2014) • Consumer Credit Reports: A Study of Medical and Non-Medical Collections (December 2014) • College Credit Card Agreements Annual Report to Congress (December 2014) • Consumers' Mortgage Shopping Experience (January 2015) • Arbitration Study Report to Congress (March 2015) • Data Point: Credit Invisibles (May 2015) 74 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT In addition to these six reports released by RMR, the Bureau's Consumer Education and Engagement Division released the following notable public reports in FY 2015: • Annual Report of the Student Loan Ombudsman (October 2015) • Annual Financial Literacy Report to Congress (October 2015) • Increasing Savings at Tax-time: Promising Practices for the Field (September 2015) • Student loan servicing: Analysis of public input and recommendations for reform (September 2015) • Overseas & Underserved: Student Loan Servicing and the Cost to our Men and Women in Uniform (July 2015) • Midyear Update on Student Loan Complaints ((June 2015) • A closer look at reverse mortgage advertisements and consumer risks (June 2015) • Complaints Received from Servicemembers, Veterans, and their Families, 2011-2014 (April 2015) • Advancing K-12 Financial Education: A Guide for Policymakers (April 2015) • Snapshot of reverse mortgage complaints December 2011—December 2014 (February 2015) • Financial well-being: The goal of financial education (January 2015) • College Credit Card Agreements: Annual Report to Congress (December 2014) • Snapshot of Debt Collection Complaints Submitted by Older Consumers (November 2014) The Bureau has information gathering and other data analysis underway that will yield public reports in FY 2016. The Bureau continues to regard knowledge creation and sharing through research reports as an important Bureau goal and is on schedule to meet the FY 2016 goal of publishing at least six reports. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 75 GOAL 4 Advance the CFPB's performance by maximizing resource productivity and enhancing impact TABLE 40: Budget for goal 4, by program ($ in the millions) Goal 4 FY 2015 FY 2016 FY 2017 Office of the Director $3.7 $6.0 $5.9 Operations $57.6 $68.7 $70.9 Legal $5.8 $7.4 $7.5 External Affairs $3.8 $4.5 $5.0 Other Programs $1.2 $1.3 $1.6 $46.1 $50.7 $55.5 $118.2 $138.6 $146.4 Centralized Services Total 76 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Introduction In order to maximize the effectiveness of the consumer protections established by Federal consumer financial law, the CFPB must acquire, maintain, support, and direct its resources in a way that enables it to operate efficiently, effectively, and transparently. This means developing, maintaining, and continuously improving the policies and controls in place to ensure the CFPB has the resources it needs and puts those resources to the best use possible. A key mission of the CFPB is to make financial products and services more transparent in the consumer marketplace. The CFPB will strive to achieve the same level of commitment to transparency in its own activities, while respecting consumer privacy and confidentiality. To accomplish this, the CFPB will develop and implement mechanisms and provide channels to maintain an open, collaborative dialogue with the public. The CFPB will reach its fourth goal by achieving the following four outcomes: 1. Outcome 4.1: Attract, engage, and deploy a diverse workforce that meets dynamic challenges and provides effective oversight of the consumer financial marketplace. 2. Outcome 4.2: Enable the innovative use of technology for the benefit of efficient internal processes and effective public engagement. 3. Outcome 4.3: Enable the operation of a high-performing organization by ensuring effective and efficient management, protection of CFPB resources, rigorous internal controls, and full compliance with the law. 4. Outcome 4.4: Increase public confidence in consumer financial markets by maintaining the CFPB s transparency, accountability, and meaningful channels for feedback. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 77 Outcome 4.1 Attract, engage, and deploy a diverse workforce that meets dynamic challenges and provides effective oversight of the consumer financial marketplace. Outcome leader: Associate Director, Operations Background The CFPB continues to pursue a strategic imperative to recruit and hire highly qualified individuals, focusing on filling vacancies at its headquarters in Washington, DC, and in its examiner workforce distributed across the country. To do so, the CFPB continues to identify and adopt best practices from the private and public sectors to hire, train, and develop a diverse workforce with the knowledge, skills and abilities required to effectively achieve the Bureau's mission. The Bureau is placing an increased emphasis on the development and retention of those highly qualified individuals now on staff. This expanded focus will allow improvement efforts targeting the employee experience, development, retention, and engagement. Strategies and investments The following strategies and investments have been put in place to help the CFPB achieve outcome 4.1. Strategies • Recruit and retain a high-quality, diverse staff through effective workforce planning and talent acquisition methods, strong engagement, and a comprehensive diversity and inclusion program. • Offer effective workforce learning, development and performance management programs in support of a high-performing workforce. • Continue to sustain and improve human capital infrastructure by creating and applying human capital policies, improving human capital information systems, effectively allocating and prioritizing resources, and using mutual accountabilities to achieve desired human capital outcomes. • Focus on culture to build a work environment where the Bureau is more deliberate about how staff invests time and works together, engaging and enabling the workforce to continue doing their best work for sustainable, long-term impact. 78 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Investments PERSONNEL Continue to build capacity across the Bureau by hiring high-performing, diverse employees. HUMAN CAPITAL SHARED-SERVICES, INFRASTRUCTURE, AND OPERATIONS Continue to provide a variety of services, including pay and leave administration support, employee benefits administration and support, and human capital helpdesk and reporting support for timekeeping, personnel documentation, and performance management systems. LEARNING, LEADERSHIP, AND ORGANIZATION DEVELOPMENT FACILITATION AND DESIGN Support the development of high-quality learning solutions including core competency training, new supervisor training, leadership training, diversity and inclusion training, and manager skillbuilding through coaching and organization development services. Support the improvement of organizational and group effectiveness through organizational interventions, workforce planning, and group or team action planning support. OUTREACH, CANDIDATE RECRUITING, AND CANDIDATE SELECTION SUPPORT Invest in candidate outreach, sourcing, recruiting, and selection support services to reach, attract, and hire high-performing, diverse staff, using both traditional and digital outreach strategies. Maintain strategic focus on developing diverse pipelines of talent and utilizing tailored candidate assessment methods to enhance quality of hire. Build and maintain strategic partnerships with colleges, universities, professional organizations, and affinity groups that serve diverse populations. DIVERSITY, INCLUSION, AND EQUAL OPPORTUNITY INITIATIVES Strengthen senior leadership engagement in personnel and organizational matters by establishing an internal executive governance group to oversee the development, implementation, and communication of critical workforce and culture-related initiatives across the Bureau. Through this group, raise awareness of systemic opportunities to enhance Bureau culture, foster greater cross-divisional collaboration, and set Bureau-wide metrics for employee engagement. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 79 Performance goals The CFPB will assess the progress on achieving outcome 4.1 through the following two performance goals: Performance goal 4.1.1: Recruit and retain high-performing, diverse employees with the right skills and abilities to meet mission driven goals and objectives. A wide array of skills and abilities that represent diversity in organizational makeup is required for success in achieving the Bureau's mission. The CFPB assesses progress and performance on this goal by measuring employee perceptions of 1) the technical competence of the workforce and 2) diversity and inclusion. Strategies to improve in these areas target organizational effectiveness, workforce planning, and diversity and inclusion interventions at the office, division, and organizational levels. PERFORMANCE MEASURES23 41: Annual Employee Survey (AES) rating on perceptions of technical competence of the CFPB staff (% favora ble)" TABLE FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 68.5% 68.5% 63% 64% 68.5% Actual 65% 66.7% 62.3% 674% NA NA In the FY 2014 annual performance plan and report, the performance measure for perceptions of workplace diversity and inclusiveness of the UTE staff (% favorable), a two-item metric, was replaced by the 'Inclusion Quotient." OPM has defined the Inclusion Quotient as comprised of five habits (Fair, Open, Cooperative, Supportive and 23 Empowering) that together help to enable a diverse, inclusive workplace. The CFPB now uses this metric in lieu of the more limited two-item metric. The technical competence composite is comprised of ratings on three items from the AES, including "the workforce has the job-relevant knowledge and skills necessary to accomplish organizational goals: 24 80 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Inclusion Quotient Annual Employee Survey rating on perception of inclusion and diversity (% favorable) TABLE 42: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Targets NA NA NA 63.5% 65% 67% Actuals NA 65.3% 61.6% 65.8% NA NA PROGRESS UPDATE AND FUTURE ACTION In FY 2015, the Office of Minority and Women Inclusion (OMWI) conducted activities to enhance diversity and inclusion at the Bureau including: • Developing the Mentoring Bank Program pilot to facilitate professional development for staff; • Continuing mandatory diversity and inclusion training for staff, managers, and senior leaders; and • Providing technical assistance to leaders on setting diversity and inclusions goals in their divisional strategic plans. These efforts helped support diversity and inclusion at the Bureau in FY 2015. The Inclusion Quotient, which rates employees' perceptions of inclusion and diversity, increased by 4.2% from last year and exceeded the FY 2015 target by 2.3%. In FY 2016, OMWI will continue to build on these programs to support diversity and inclusion. In FY 2015, the Bureau recruited and hired approximately 225 new employees. The Offices of Human Capital (OHC), OMWI, and Civil Rights (OCR) collaborated to develop targeted recruiting strategies and to enhance workplace diversity. Strategies applied in FY 2015 included: • Partnering with affiliate organizations to reach qualified diverse professionals. • Recruiting at 26 minority-focused career events. • Using the Partnership for Public Service's "Student Ambassador Program," and programs such as The Washington Center to staff academic year internships to reinforce the Bureau's diverse talent pipeline. These efforts enabled the CFPB to build a stronger student hiring pipeline to employment with the Bureau. The Bureau continued to apply enhanced candidate assessment tools to support hiring at all CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 81 levels of the organization. OHC, OMWI, and OCR provided structured interview training to hiring managers and those involved in hiring interviews across the Bureau to facilitate hiring decisions that are made on job-related factors. In FY 2015, 50 interviewers were trained in conducting structured interviews to add to the capacity of the 200 interviewers trained in 2014, and trainings will continue in an on-demand approach going forward. In addition to maintaining a strong focus on recruiting and hiring high-performing diverse employees, the Bureau also placed a special emphasis in FY 2015 on expanding tools, resources, and opportunities to help existing staff accelerate their career development. Examples include: creating a Career Path Guide that profiles the roles available within the Bureau and the skills required to be successful in those roles; launching a Career Planning Framework that provides tools and resources for individual development planning; and a Centralized Detail Posting Process that advertises internal detail opportunities to Bureau employees. Finally, the Bureau launched a new Leadership Competency Model that defines expectations and requirements for leaders at all levels of the organization. The competency model is currently utilized for selection and learning and development of Bureau leaders. A new competency model for non-supervisory staff will be launched in FY 2016. Performance goal 4.1.2: Increase the level of employee engagement. Engagement has been described as a state of passion and commitment to the organization's goals on the part of each employee, which leads to their willingness to invest discretionary effort to ensure success. In the case of the CFPB, maintaining the initial motivation and excitement of the new workforce is critical to our future success. Individual employees' perception of the level of employee engagement's one way to measure the Bureau's success in engaging its employees. PERFORMANCE MEASURE TABLE 43: Annual Employee Survey engagement composite rating (% favora bier FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 76.5% 76.5% 72% 73% 75% Actual NA 73% 70.5% 74.1% NA NA 25 The employee engagement composite is comprised of ratings on nine items from the AES survey, such as "my work gives me a feeling of personal accomplishment" and "the work do is important: 82 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT PROGRESS UPDATE AND FUTURE ACTION As the Bureau matures as an organization, senior leadership is choosing to focus on building a work environment where we are more deliberate about how we invest our time and work together in order to do our best work for sustainable, long-term impact. This group oversees the development, implementation, and communication of a number of culture initiatives and management excellence practices. The following initiatives are currently underway: norms implementation, measurement and evaluation of norms implementation, employee outreach and involvement, and integrated planning of people-related programs. The Bureau puts a special emphasis on activities surrounding the Annual Employee Survey. This includes encouraging broad participation, providing robust analysis of results at the division level in a structured and consistent manner, further improving on successes started or achieved as a result of previous year action planning efforts, and working directly with leaders of all divisions to initiate action planning based on most recent findings. The CFPB will continue to work in a sustainable, focused fashion to develop and reinforce action and communication across the organization. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 83 Outcome 4.2 Enable the innovative use of technology for the benefit of efficient internal processes and effective public engagement. Outcome leader: Associate Director, Operations Background The CFPB is committed to staying on the leading edge of technology and leveraging its technological resources to provide significant business value with lower costs. From developing online products that help inform consumers to making critical data available internally and to the public, technology is and will continue to be core to the CFPB accomplishing its mission. Strategies and investments The following strategies and investments have been put in place to help the CFPB achieve outcome 4.2. Strategies • Establish a secure, responsive and cost-effective technology infrastructure to enable a 21st century agency. • Continue to build, develop and improve next-generation online tools that help consumers get answers to questions, make financial decisions, and confront difficult financial circumstances. • Maintain a robust platform for the public to visualize and make use of data maintained by the Bureau such as consumer complaint data. • Create a suite of enterprise-wide technology capabilities that maximizes the efficiencies of resources and minimizes costs. Investments PERSONNEL Hire additional staff to enable the organization's continued support of Bureau activities including managing, operating, and safeguarding the IT systems that host and store the CEPB's data; designing and developing tools to facilitate data-driven analysis and consumer education; 84 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT and implementing a 21st century cloud-based infrastructure that serves as the foundation for innovative technology. TECHNOLOGY INFRASTRUCTURE Manage and continue to build out CFPB s technology infrastructure, ensuring that it is flexible, scalable, and capable of sustaining the Bureau's present needs and future growth. TECHNOLOGY INFRASTRUCTURE-SHARED SERVICES In FY 2015, the CEEB continued towards independence from DO Treasury services, with a majority of services transitioned in FY 2015. The FY 2016 and FY 2017 budgets reflect a modicum of investment in this area to ensure the transition to independence from DO Treasury services is completed as orderly and efficiently as possible. CYBERSECURITY Continue to enhance a robust cybersecurity program that secures and safeguards communications, data, and IT resources through a combination of comprehensive policies, continuous monitoring, and leading technologies. IT PORTFOLIO MANAGEMENT Enhance the successful deployment of projects through the continued use of disciplined methodologies including project management and agile development and facilitate the development of the long-term technology strategy that guides future mission capabilities. DATA INFRASTRUCTURE AND ANALYSIS Continue to build and develop a data-driven strategy that is deployed on a technology architecture with scalable capabilities that will allow the Bureau to use and manage data in order to conduct predictive analytics and aid in decision making. DESIGN AND SOFTWARE DEVELOPMENT SUPPORT Continue to strengthen the Bureau's capacity to design, develop, implement, and maintain new tools with enhanced capabilities, features, and functionalities for a variety of business applications that support the Bureau's mission. E-DISCOVERY SERVICES IMPLEMENTATION Create a shared service center to support the legal needs and obligations of the Bureau. This includes Congressional requests, Enforcement and Fair Lending investigations and actions, CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 85 MIA requests, internal investigations and litigation, managing regulatory comments, Supervision requests for information, and market studies with unstructured documents. This investment also includes the necessary technology and resources needed to collect internal documents as well as store and process large amounts of documents to be reviewed in order to discover specific and responsive documents relevant to an external investigation, internal investigation, or third-party request. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEM Develop customer relationship management tools that will enable the Bureau to better coordinate internal and external interactions and workflows. The CEM System will enable staff to share contacts and coordinate interactions to bolster communications with stakeholders. This investment will also support the management and measurement of engagement and outreach efforts. EXTRANET Develop infrastructure to streamline the data intake process with external entities. This investment will also support maintaining strong data security that will be able to scale with the Bureau's evolving data-intake needs, especially in collecting materials from supervised institutions, file sharing with partner agencies, managing public comments for proposed rulemaking, and developing consumer education and empowerment tools. DOCUMENT MANAGEMENT SYSTEM Develop a streamlined enterprise file system to better manage, synchronize, and share documents within the Bureau. This investment will support improved coordination between stakeholders, as well as systematic improvements in version control, document storage, collaboration, user permissions, reductions in human error, and document templates. Examples of expected improved processes include streamlining documentation requirements for the rulewriting process, tracking official documentation for enforcement matters, and centralizing and responding to oversight requests and engagements. 86 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Performance goals The CFPB will assess the progress on achieving outcome 4.2 through the following two performance goals: Performance goal 4.2.1: Release new datasets to the public, where legally permissible and appropriate, to allow for innovative uses of the data by individuals, non-profit entities, and businesses for the benefit of consumers. The public uses data released by the government to build tools and provide resources to consumers to help them make the best financial decisions. The CFPB wants to support a culture of information and transparency by releasing useful data to the public when doing so is legally permissible and appropriate. PERFORMANCE MEASURE TABLE 44: Provision of data to the public in legally permissible and appropriate instances" FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 5 7 7 9 9 Actual 3 4 7 8 NA NA PROGRESS UPDATE AND FUTURE ACTION In FY 2013, the CFPB released four datasets including the Consumer Complaint Database, the Credit Card Agreement Database, the College Credit Card agreements, and the Survey of Credit Card Pricing Plans. Additionally, in September 2013, the CFPB provided access to the HM DA data via its website. In FY 2014, the CFPB launched its public data platform for HMDA data and updated the information with 2013 mortgage originations. This information will be available for use by industry advocates and consumers to intuitively search and work with the data and conduct analysis. The CFPB also released eRegs, a searchable tool for federal financial regulations. eRegs currently covers two major regulations for the financial industry, Reg Z and Reg E, and the Bureau is looking at potential opportunities for expansion. Also in FY 2014, the CFPB built out its Paying for College web site, with cost information on over 2,000 educational institutions. 26 Datasets are reported on a cumulative basis. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 87 In FY 2015, the Bureau launched the Owning a Home tool. This tool includes Rate Checker—a data-driven tool that helps consumers benchmark against current mortgage rates and terms in the market. Also, in 2015, the Bureau expanded the Consumer Complaint Database. The latest release now includes consumer complaint narratives for which the consumer has consented to have his or her narrative published once it has been scrubbed of personal information. The release also includes the company's public response. Performance Goal 4.2.2: Improve the efficiency of internal processes and procedures. Technology can help us improve the efficiency of the CFPB so that the Bureau serves more consumers in a better way. PERFORMANCE MEASURE TABLE 43: Efficiency of internal processes and procedures Target Actual FY 2012 NA Launched AskCFPB; Launched an upgrade of the Intranet including an upgraded wiki, personnel directory, and internal news feed; Deployed a performance management system FY 2013 Deploy a business intelligence tool; Deploy a business process automation platform and develop applications leveraging it Development of Business Intelligence Tool; Debt Collection Product Launch; Paying for College; Infrastructure Independence Phase I FY 2014 Continue to build out core infrastructure services Established a change management process governed by a Change Control Board; Re-engineered AWS environment and continued to mature digital platforms and infrastructure; Made key steps in becoming independent from the Department of the Treasury FY 2015 Operate and maintain core infrastructure services; Deploy mission capabilities to support Supervision and Enforcement activities Achieved full DO independence and established CFPB-managed technology infrastructure 88 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Target Actual FY 2016 Stabilize and further build out core infrastructure services; streamline, monitor, and report on processes to deliver key technology services across the Bureau NA FY 2017 Continue to stabilize, build out, and maintain core infrastructure services; streamline, monitor, and report on processes to deliver key technology services across the Bureau. Begin rolling out next-generation devices for CFPB staff NA PROGRESS UPDATE AND FUTURE ACTION In FY 2013, the Bureau developed a business intelligence tool that provides a user-friendly platform for exploring and analyzing data. This platform was implemented in the first quarter of FY 2014. During FY 2013, the Bureau initiated an effort to prioritize and manage the Bureau's information technology needs resulting in more streamlined and disciplined processes. The results of the prioritization efforts allowed for the successful deployment of over 50% of technology projects, including the Debt Collection and Paying for College product launches. In FY 2014, the Bureau continued the work to build out the core infrastructure capabilities and create a long term technology strategy that guides future mission capabilities. The Bureau developed a five-year long-term plan to build out infrastructure capabilities and improve technology service levels across IT support services. The Bureau also migrated its clgov platform to a more secure, scalable environment and made significant progress re-engineering the AWS environment to prepare for future digital activities. The Bureau also made key steps in becoming independent from the Department of the Treasury by migrating email, Blackberry, service desk ticketing, and the active directory to CFPB-ownership and began migration to a CFPB-owned laptop image. In FY 2015, the Bureau continued to monitor progress against its long-term plan and continued to focus on core infrastructure activities. The Bureau also completed DO independence and now manages its own technology infrastructure. The Bureau also deployed technologies associated with infrastructure independence, such as communications technologies. In FY 2016, the Bureau will continue to execute against its long-term technology plan. It will focus on upgrading and improving the CFPB-managed technology infrastructure. It will also deploy enterprise tools to support Bureau-wide business needs. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 89 Outcome 4.3 Enable the operation of a high-performing organization by ensuring effective and efficient management, protection of the CFPB resources, rigorous internal controls, and full compliance with the law. Outcome leader: Associate Director, Operations Background The CFPB has the obligation to act as a good steward of public funds. The CFPB will monitor its operations and conduct periodic evaluations to ensure it maintains good financial practices and robust internal controls. Strategies and investments The following strategies and investments have been put in place to help the CFPB achieve outcome 4.3. Strategies • Use data to supervise and coordinate all financial operations of the Bureau consistent with the requirements of laws and regulations. • Develop a team of high-performing professionals with expertise in budget, financial management, procurement, internal controls, and travel operations. • Develop and maintain integrated accounting and financial management, and travel systems in order to support the effective execution of resources. Investments PERSONNEL Maintain staff to ensure resources continue to be used efficiently and effectively, and transparency and accountability are upheld. AUDITS OF THE BUREAU Continue to work with the Office of Inspector General (OIG) of the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection, the Government 90 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Accountability Office (GAO), and an independent contractor for external auditing and oversight of the Bureau's operations and budget. FINANCIAL MANAGEMENT SUPPORT SERVICES Continue to provide financial management services in the areas of budget execution, purchasing, accounts payable, accounts receivable, and general ledger and fixed assets. PROCUREMENT SERVICES & SUPPORT Ensure proper adherence to all relevant federal acquisitions regulations and guidelines while continuing to develop a flexible, efficient, and responsive procurement environment. INTERNAL CONTROLS Continue to invest in resources that maintain effective internal controls, and follow appropriate models for internal controls, such as the Federal Managers' Financial Integrity Act of 1982 (FMFIA), and the objectives on financial reporting as established under Dodd-Frank and best practices derived from OMB Circular A-123. Performance goals The CFPB will assess the progress on achieving outcome 4.3 through the following three performance goals: Performance goal 4.3.1: Obtain an unmodified "clean" audit opinion on the CFPB's financial statements? An unmodified opinion from GAO of the CFPB s internal operations confirms that the Bureau maintains sound financial practices and robust internal controls. 27 The American Institute of Certified Public Accountant's Auditing Standards Board updated sections of the Statements of Auditing Standards with respect to the definition of the types of audit reports issued. Based on these changes, reports on audited financial statements will use the term 'unmodified opinion' instead of 'unqualified opinion beginning in fiscal year 2013. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 91 PERFORMANCE MEASURE TABLE 46: Unmodified "clean" audit opinion on financial statements FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA Unmodified audit opinion Unmodified audit opinion Unmodified audit opinion Unmodified audit opinion Unmodified audit opinion Actual Unqualified audit opinion Unmodified audit opinion Unmodified audit opinion Unmodified audit opinion NA NA PROGRESS UPDATE AND FUTURE ACTION received an unmodified opinion from the GAO on its FY 2015 financial statements. GAO also previously provided unmodified opinions on the Bureau's FY 2014, 2013, 2012 and 2011 financial statements. In FY 2014, GAO identified one material weakness in CFPB s internal control over financial reporting related to the accrual process and in FY 2015, CFPB remediated this finding. In FY 2015, GAO identified one significant deficiency regarding the recordation of property and equipment and cited no instances of non-compliance with laws and regulations. The CFPB will continue to take appropriate steps to implement a timely corrective action. The CFPB Performance goal 4.3.2: Award 90% of contracts competitively. Competing procurement actions allow for competitive market pricing, stronger proposal submissions, and a distributed vendor base in support of the Bureau. Public value is also derived when money is spent effectively. PERFORMANCE MEASURES TABLE 47: Percentage of contracts competitively awarded overall FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 90% 90% 90% 90% 90% Actual 93% 83% 86% 94% NA NA 92 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Percentage of professional, administrative, and management services contracts competitively awarded TABLE 48: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA NA NA 90% 90% 90% Actual NA NA 92% 83% NA NA Percentage of automatic data processing and telecommunication services contracts competitively awarded TABLE 49: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA NA NA 90% 90% 90% Actual NA NA 76% 91% NA NA PROGRESS UPDATE AND FUTURE ACTION The CFPB is currently tracking competition and reporting data measurements within the agency on a quarterly basis. At 9o%, the CFPB's competition goals for FY 2013 through FY 2017 are ambitious but realistic and designed to position the Bureau as a leader-by-example in stewarding public money. The CFPB does not aim for 100% competition, as the Bureau has a range of routine exempt needs including expert witness services, conferences, and subscriptions. In addition to the principle of competition, the Office of Procurement partners with the OMWI to develop tools and resources for increasing opportunities to minority-owned and women-owned businesses. In FY 2015, out of approximately $242 million that CFPB awarded in contracts, $226 million, or 94%, were awarded on a competitive basis. Of CFPB's contracting dollars spent for FY 2015, CFPB s Office of Procurement oversaw the expenditure of 25% of the contracting dollars, the General Services Administration (GSA) oversaw the expenditure of 44% of the contracting dollars, and the Bureau of the Fiscal Service (BFS), under CFPB s direction, oversaw the expenditure of 31% of the contracting dollars. The Office of Procurement met the target of 90% competitive awards for the contracting funds it awarded. GSA, which is overseeing the construction of the renovated building at 1700 G Street, competitively awarded nearly all of its contracting dollars in FY 2015. BFS supports the Office of Procurement under a yearly inter-agency agreement as part of a shared-service package which also includes human resources, finance, and travel support services. Of the dollars awarded on CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 93 CFPB's behalf by BPS, 89% were awarded competitively. The top two service categories for FY 2015, exclusive of construction, were Professional, Administrative, and Management support and Automatic Data Processing and Telecommunication support. Of the dollars awarded in FY 2015 for professional, administrative and management support service contracts, 83% were awarded on a competitive basis. 91% of the dollars awarded for automatic data processing and telecommunication support service contracts were competitive. The CFPB will continue working strenuously inside the agency, as well as with the BFS partners, to bring the percentage of competitive awards in line with the Bureau's go% goal for FY 2016 through FY 2017. Performance goal 4.3.3: Distribute funds collected through enforcement actions to identified victims within 24 months. This goal tracks the disbursement of Bureau-administered redress funds and CPF payments to eligible identified victims within 24 months of identifying victims. The Dodd-Frank Act authorizes the CFPB to enforce Federal consumer financial laws. Under this authority, the CFPB brings cases which may result in redress to harmed consumers. In some cases, the Bureau will be responsible for obtaining redress funds from the defendant and distributing those funds to the harmed consumers. In addition, the Dodd-Frank Act gives the Bureau the authority to obtain civil money penalties in enforcement actions and to deposit those penalties in the CPF. It may then use amounts in the CPF for payments to the victims of activities for which civil penalties have been imposed. PERFORMANCE MEASURE Percentage of funds collected through the enforcement of Federal consumer financial laws that is distributed to identified victims within 24 months TABLE 50: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA Baseline 100% 100% 100% 100% Actual NA" Baseline under development 100% 100% NA NA " The Bureau did not collect redress funds on behalf of victims in FY 2012. 94 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT PROGRESS UPDATE AND FUTURE ACTION In FY 2014, the Bureau distributed CPF and Bureau-administered redress payments to all eligible identified victims within 24 months of identifying the victims. In FY 2014, the Bureau made payments totaling $10.2 million to consumers in three cases involving CPF and Bureauadministered redress funds. In FY 2015, the Bureau made payments totaling $22.4 million to consumers in three cases involving CPF and Bureau-administered redress funds. Outcome 4.4 Increase public confidence in consumer financial markets by maintaining the CFPB's transparency, accountability, and meaningful channels for feedback Outcome leader: Associate Director, External Affairs Background Since transparency is at the core of how the CFPB operates, the CFPB will provide clear information both on the use of resources and on its performance. To that end, the CFPB will communicate substantively and frequently across a wide and diverse range of external stakeholders, including industry and consumer groups. The CFPB aims to actively engage all stakeholders that could potentially be affected by the Bureau's work, with the understanding that there is much insight to be gained from varied stakeholders representing distinct points of view. Strategies and investments The following strategies and investments have been put in place to help the CFPB achieve outcome 4.4. Strategies • Gather input from stakeholders on the CEPB's policies and operations to ensure the Bureau is effectively communicating its activities, meeting transparency goals, and actively soliciting feedback. • Enhance program efficiency through regular analysis of operations data. • Maintain and enhance a highly effective and usable online presence that supports multiple digital services. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 95 Investments EXTERNAL STAKEHOLDER ENGAGEMENT Continue to increase capacity to allow the Bureau to solicit a broad range of perspectives from a wide variety of stakeholders, to further amplify the Bureau's work externally including through live-streaming events and providing video links to past events on the Bureau's website, and to coordinate, support, and inform the work of the Bureau. Performance goal The CFPB will assess the progress on achieving outcome 4.4 through the following performance goal: Performance goal 4.4.1: Engage the public by hosting public field hearings, town hall meetings, Consumer Advisory Board meetings, and other events on consumer finance issues. The CFPB aims to engage with the public on consumer finance issues (a) to ensure that consumers and interested parties have visibility into the Bureau's work and have meaningful opportunities for public input and (b) to ensure that the Bureau's work is informed by regular input from varied perspectives representing distinct points of view. PERFORMANCE MEASURE Number of public field hearings, town hall meetings, Consumer Advisory Board meetings, and other public events hosted annually TABLE 51: FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Target NA 8 9 13 13 13 Actual 8 11 13 15 NA NA PROGRESS UPDATE AND FUTURE ACTION The Bureau hosted is public events in FY 2015, focused on key issues affecting consumer financial markets such as student loans, debt collection, mortgages, arbitration, and payday lending. These included two meetings of its Consumer Advisory Board (CAB), three meetings of its Community Bank Advisory Council, and two meetings of its Credit Union Advisory Council: 1. Washington DC Credit Union Advisory Council meeting in October 2014 2. Washington DC public forum on checking accounts in October 2014 96 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT 3 Washington DC Community Bank Advisory Council meeting in October 2014 4 Long Beach, California public event on debt collection in October 2014 with FTC 5 Wilmington, Delaware field hearing on prepaid cards in November 2014 6 Oklahoma City field hearing on medical debt in December 2014 7. Washington DC Consumer Advisory Board meeting in February 2015 8. Newark, New Jersey field hearing on arbitration in March 2015 9. Washington DC Credit Union Advisory Council meeting in March 2015 10. Richmond, Virginia field hearing on payday lending in March 2015 D. Washington DC Community Bank Advisory Council meeting in April 2015 12. Milwaukee, Wisconsin field hearing on student loans in May 2015 13. Omaha, Nebraska Consumer Advisory Board meeting in June 2015 14. Washington DC public event on mortgages (Know Before You Owe) in August 2015 15. Washington DC Community Bank Advisory Council meeting in September 2015 The Bureau also participated in dozens of public events hosted by others in FY 2015, including testifying before Congress on four occasions to discuss policy, operations, and budget matters. As of the end of FY 2015, the Bureau had testified before Congress 56 times since the Bureau's inception. In FY 2016 and beyond, the Bureau will continue to host events on issues having an impact on financial consumers. The Bureau will also continue to testify on important issues at the request of Congress. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 97 Appendix Appendix A: Program evaluation, data validation, and management challenges Program Evaluations and Research The CFPB has launched program evaluation efforts across its four Strategic Goals to ensure continuous identification of opportunities for enhancement and increased effectiveness of its supervision and enforcement programs, research and regulations efforts, consumer education and engagement initiatives, as well as internal operations in the areas of procurement, talent management, technology and innovation, and others. The Bureau utilizes internal and external resources and a variety of processes to conduct regular evaluations and introduce course corrections as necessary. The following highlights key evaluation efforts undertaken by the CFPB across the four Strategic Goals in FY 2015, identifies areas for planned assessments and research in FY 2016-2017, and summarizes review, audit and program performance management processes implemented by the Bureau for cross-goal assessments. 98 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT Goal 1 In support of Outcome LL the Bureau's Research, Markets, and Regulations Division (RMR) executed actions that served as evaluative efforts to improve Bureau rulewriting deliverables, associated analyses, and procedures. These included: • Continued disclosure testing for major rulemakings, which informed the draft and final regulations; and • Reviewing and renewing the Bureau's Paperwork Reduction Act (PRA) burden estimates for inherited regulations, identifying areas for improvements. In support of Outcomes 1.2 and 1.3, during FY 2015, the Bureau's Supervision, Enforcement, and Fair Lending Division (SEEL) executed a comprehensive program evaluation effort involving a third-party consultant to study the current planning measures, techniques, and administrative duties leading up to the commencement of enforcement work. The project also included analysis and evaluation of how final work products are created, edited, and cleared within Enforcement as well as by other stakeholders across the Bureau. The primary goal of this study was to find and eventually implement potential efficiencies in Enforcement's administrative, planning, and review processes. This project built on the successes of an FY 2014 evaluation and performance improvement effort surrounding the Bureau's exam report writing and review process. SEFL continues to monitor, review, and improve policies and procedures around this process on an ongoing basis. Goal 2 In FY 2015, the Bureau's Consumer Education and Engagement Division (CEE) began assessing its consumer outreach initiatives in both its Consumer Engagement Office and the Office for Older Americans to advance Outcome 2.2. In both efforts, the Offices use website analytics and academic research to evaluate the impact of initiatives on consumers. In particular: • Consumer Engagement began to measure the impact that its Paying for College web tool has on viewers. This effort involves tracking consumer use of the tool through website analytics and determining the impact that various levels of engagement have on consumers. The result of the evaluation is an assumed base savings to consumers driven by website engagement and student loan and banking metrics. Based on analysis of web traffic and potential cost savings from avoiding costly default, the team found that the tool had its highest impact in Repay Student Debt. The team also used the analysis to explore potential updates for the Student Loans and Student Banking guides, as well as ways to improve the process in the future, particularly around benchmarking performance for updates or creation of new tools. CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT 99 • The Office for Older Americans uses a similar approach to assess the impact that its Money Smart for Older Adults guide—in both paper and digital formats—has on its users. Incorporated in this analysis is the Office's outreach through training sessions and any subsequent paper orders of the materials. The result is an assumed base savings to older adults driven by engagement both digitally and in paper form with the product and metrics associated with preventing scams and fraud targeting older adults. The team has been able to target low-cost and high-impact strategies for promoting the materials that it can leverage in the future. For example, specific events highlighting the guides in FY 2014 led to improvements in the estimated return on investment from 2:1 to 10:1. In FY 2016 and onward, GEE plans to employ similar methodologies to help track the outcomes of additional initiatives, including a consumer education campaign facilitating parents' discussions with children about money, the Ask CFPB database of frequently asked consumer financial questions, and the Your Money Your Goals program. Goal 3 RMR undertook several efforts in FY 2015 to assess the effectiveness of its programs and facilitate achievement of Outcomes 3.1 and 3.2. RMR's program evaluation efforts contributed to the improvement of internal processes, as well as influenced the impact of external, missiondriven programs. These efforts included: • Continuing the development of the National Mortgage Database and the Consumer Credit Panel that will allow the Bureau to monitor markets and conduct research to surface financial trends and emergent risks relevant to consumers. • Completing procurements to establish capabilities for conducting formal surveys and controlled trials in economic laboratory settings and conducting initial experiments that will allow the Bureau to improve its knowledge on consumer finance decision-making. RMR will continue to maintain its data and research capabilities in support of the Bureau's research mission. Goal 4 To support achievement of Outcome 4.1, in FY 2015, the CFPB's Operations Division engaged an independent third-party consulting firm to conduct a rigorous evaluation of the Bureau's FY 2012 and FY 2013 performance management programs. The project focused on examining potential root causes for distributional differences in FY 2012 and FY 2013 in employee performance ratings. The evaluation considered multiple perspectives 100 CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT and inputs including but not limited to: statistical diversity reports, testimony, listening session reports, focus groups, and performance management policies. Based on the evaluation, findings, and recommendations from the engagement and from a joint labor-management working group, the CM made several program enhancements on performance standards, communication and training, system simplification, and program compliance and evaluation. The Bureau will continue to make additional improvements to its performance management program in FY 2016. Cross-goal audits and performance management reviews Government Accountability Office (GAO): The GAO conducts studies or investigations related to the CFPB's programs every year. In addition, GAO performs an annual audit of the CFPB s financial statements and internal controls, as required by the Dodd-Frank Act. Office of the Inspector General of the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau (OIG): The OIG is an independent oversight authority within the Board of Governors of the Federal Reserve System that conducts audits, inspections, evaluation, and other reviews of programs and operations of the CFPB and investigations into allegations of potential misconduct by staff or contractors. The mission of the OIG is to detect fraud, waste and abuse, and to promote integrity, economy, efficiency and effectiveness in the CFPB's programs and operations. The OIG's audit reports are available on the OIG's website. Independent Performance Audit: In accordance with the Dodd-Frank Act, the CFPB orders an annual independent audit of the operations and budget of the Bureau. The purpose of this audit is to provide objective analyses to improve program performance and operations, reduce costs, facilitate decision-making, and contribute to public accountability. The audits for prior years are available on the Bureau's website. Quarterly Performance Reviews: On a quarterly basis, the CFPB executives, including all Goal Leaders, review progress toward achieving the Bureau's strategic goals and outcomes, in part using the performance goals and measures outlined in this plan. At these points, course corrections are made as needed. CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT 101 Data Validation Following the Bureau's Data Accuracy and Reliability policy, the CFPB takes steps continuously to ensure that performance information is complete, accurate, and reliable. The following captures key efforts by Strategic Goal and specifically focuses on data sources, summarizes levels of accuracy and data verification approaches, and identifies data limitations along with compensatory counteractions. Strategic Goal 1 OUTCOME 1.1 • Data sources: To advance Outcome 1.1, the Bureau utilized a range of data sources, including the Federal Register, regulations.gov, and the CFPB website (consumerfinance. goy/notice-and-comment). Rulemakings are considered finalized when a final rule is issued by the Bureau and posted to the Bureau's website (see Procedure Related to Rulemaking, Docket No. CFPB-2012-0051). • Level of accuracy and data verification: The data sources listed above were reviewed to determine all proposed rulemakings covered by the performance metrics. This includes all consumer protection related rulemakings conducted solely by the CFPB in which the final public comment period closed between January 1, 2014 and December 31, 2014 (and thus could have been finalized or otherwise resolved within a 9 month period occurring in FY 2015 (from October 1, 2014 through September 30, 2015)) and all significant consumer protection-related, notice-and-comment rulemakings informed by public outreach processes. • Advantages, limitations, and mitigating actions: No limitations and reasonable level of accuracy - the Federal Register and Regulations.gov provide an accurate and extensive record of all rulemakings promulgated by the Bureau. OUTCOMES 1.2 AND 1.3 • Data sources: The CFPB captures and stores data about its supervision and enforcement activities in several systems of record, including LawBase and the Supervision and Examination System (SFS). Metrics and measures for the performance goals in support of Strategic Goal 1 are updated based on data housed in these systems on a quarterly basis, followed by focused management reviews to assess progress toward achieving the Bureau's Strategic Goals and Outcomes. • Level of accuracy and data verification: CFPB provides training to users on proper use of the data systems described above to ensure data verification and validation. 102 CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT Effective early FY 2015, the SES Data Access Policy ensures user permissions remain in alignment with the SES Data Entry Policy In addition, SES user permissions were thoroughly reviewed and updated. The SES Data Entry Policy was updated near the end of FY 2015. Revisions included additional SES fields to ensure data used to track supervisory activities are entered into SES on a timely basis. For example, the headquarters Office of Supervision Examinations conducts analysis and notifies appropriate parties if there are any data validation issues, as outlined for performance goals 1.2.4/1.3.4. Additionally, senior management conducts quarterly data quality and validation reviews to further assess and re-affirm data accuracy. • Advantages, limitations, and mitigating actions: Although the data is frequently reviewed for accuracy, as discussed above, the CFPB continues to improve its ability to track its supervision and enforcement activities. For example, SES was recently enhanced to allow for accurate tracking of supervisory and applicable enforcement actions. These modifications have significantly enhanced the CFPB's ability to measure its supervision and applicable enforcement activities. Continued improvements to SES and LawBase, as needed, will assist in capturing key supervisory and enforcement data. Strategic Goal 2 OUTCOME 2.1 • Data sources: The Bureau's Office of Consumer Response tracks progress against Outcome 2.1 using data from its case management system. Level of accuracy and data verification: The management of the Bureau's Consumer Response function conducts regular data reviews and cross-checks accuracy for all key performance measures, including Intake Cycle Time, Company Cycle Time, and Consumer Cycle Time. The team also tracks the proportion of complaints routed through the dedicated company portal and the number of consumer complaints handled by Consumer Response. • Advantages, limitations, and mitigating actions: No data limitations are known to affect this indicator. OUTCOME 2.2 • Data sources: To identify key success factors in financial health, the CFPB has embarked on a rigorous, multi-year effort to determine the nature of consumer financial wellbeing, and to learn what factors support it. The first stage of research laid the theoretical groundwork for later quantitative research: CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT 103 • Reviewed more than 150 articles from a dozen fields;28 • Conducted one-on-one interviews with adult consumers and financial practitioners— professionals who provide financial advice, education, services or products to consumers; • Transcribed and analyzed 1,600 pages of interview transcripts, from which responses were sorted, coded, and then cataloged using qualitative data analysis software. This first phase culminated in the public release of a definition of financial well-being grounded in the experiences of consumers. In FY 2014, the research focused on developing a new, psychometrically sound, reliable and valid survey scale to measure financial well-being. The development of such a scale was completed in FY 2015 and is anticipated to be released to the public for use by financial education researchers and practitioners in FY 2016. User activity on consumerfinance.gov is tracked by the Digital Analytics team using Google Analytics. For more detail see Outcome 4.2. • Level of accuracy and data verification: The first element of the Bureau's strategy to obtain quality data and analysis was to procure third-party vendors with specialized expertise in all elements of the desired research activities. In addition, a team of subject matter experts from Consumer Education and Engagement, the Data Analytics Team, and the CFPB's Office of Research review, provide feedback, and ensure the quality of research processes and deliverables. • Advantages, limitations, and mitigating actions: The Bureau's efforts build on rigorous research and quality data. In the next phase, survey scales and hypotheses will be validated through consumer testing at scale. Throughout FY 2015, the CFPB tested and finalized metrics of financial well-being identified in FY 2014 and prepared for large scale quantitative testing of the hypotheses for success. This quantitative testing effort started at the end of FY 2015 and is expected to conclude in FY 2017. Strategic Goal 3 OUTCOME 3.1 • Data sources: The CFPB Credit Card Database is sourced from Office of the Comptroller of the Currency (OCC) and the CFPB's supervisory data collection. The Bureau currently uses several resources for monitoring the mortgage markets including primarily, data gathered under HMDA and commercially available data regarding originations and servicing. The Bureau is preparing to use the National Mortgage Database (NMDB) as a 28 These include Consumer Finance, Economics, Behavioral Economies, Psychology (cognitive and developmental), Health, Education, Philosophy, Conservation, Environmental Science, Sociology, and Marketing. 104 CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT new source for monitoring the mortgage market. • Level of accuracy and data verification: For credit card data, the data verification and validation process occurs in two main phases. In the first instance, the external contractor responsible for collecting and processing the supervisory data on behalf of the CFPB puts the data through a systematic validation process to ensure that the data is coded correctly and uniformly across issuers. In the second main phase of data verification, the CFPB staff reviews the data productions by examining emerging trends and analyzes the data for unusual patterns. For data related to mortgages, the data sources described above are widely used by government and private-sector analysts in understanding the mortgage market. The HMDA data are statutorily required and are carefully collected and verified by the agencies collecting the data. • Advantages, limitations, and mitigating actions: During the development of the NMDB, the Bureau currently relies upon the combination of public and proprietary datasets described above to analyze the market. Of these data, the HMDA data provides the highest level of coverage at a commonly referenced level of 90% of the market. We supplement these data with the commercial and regulatory datasets described above which individually have more restricted coverage but include additional variables and are reported more frequently and with shorter delays. Once developed, the NMDB will have a greater set of reported variables than the currently available data. OUTCOME 3.2 • Data sources: Data source used was the CFPB website for reports dated between October 2014 and September 30, 2015. Reports are considered finalized when the Bureau issues and posts the final report to the Bureau's website. • Level of accuracy and data verification: The data source listed above was reviewed to account for all major research reports published by the Division of Research, Markets, and Regulations in FY 2015. • Advantages, limitations, and mitigating actions: The number of reports published does not necessarily equate to influence in the field. The Bureau may explore and track metrics which may better reflect the influence of our research. Such metrics may include, but are not limited to: the number of comments on blog posts announcing the report, popular press citations of Bureau reports, or academic citations of Bureau reports. CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT 105 Strategic Goal 4 OUTCOME 4.1 • Data sources: Annual Employee Survey (AES) results are captured through an online survey administered under an Interagency Agreement (IAA) for reimbursable government services offered by the Office of Personnel Management's (OPM) Human Resources Solutions group. The IAA provides warranties that services provided for AES meet professional and legal standards. OPM's USASurvey branded online survey administration tool is used to gather data. This tool is subject to the variety of information security guidelines for government information technology projects and systems. To ensure that all intended employees are invited to complete the annual employee survey, email addresses for the employee population are provided to OPM as the basis for survey invitation. • Level of accuracy and data verification: The following steps are taken to verify data summaries for item and index level results. • OPM provides independent verification and reporting of Bureau-wide AES results prior to releasing data to the Bureau. • The CFPB's Office of Human Capital (OHC) conducts analysis and generatessummary reports. • Any and all discrepancies between posted and calculated results are subject to 100% verification in collaboration with OPM vendor. • At a broader level of verification, comparison data from OPM for government-wide results is monitored and verified through data cross checking. • In the final steps of survey processing, CFPB posts results to external website and sends internet link and posted results to OPM to meet regulatory guidance. • Advantages, limitations, and mitigating actions: The Bureau continues to monitor and evaluate the reliability and validity of these metrics as additional baseline data become available. Adjustment to outcomes, components, or targets may be necessary as measures are better understood. OUTCOME 4.2 • Data sources: All data reported from the Digital Analytics team comes from Google Analytics. Data is collected on an as-needed basis through an API that connects directly with Google Servers and stores the data in an Excel template. • Level of accuracy and data verification: Data is pulled by a Google Analytics Certified analyst who performs thorough quality control checks to ensure all data reported is accurate. The data is then sent to a second Google Analytics Certified analyst who does 106 CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT an additional Quality Control check to re-verify that all data reported is accurate. The data is checked against the user interface on Google Analytics. • Advantages, limitations, and mitigating actions: No data limitations are known to affect this indicator. OUTCOME 4.3 • Data sources: For the audit opinion performance goal, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 require that GAO conducts an audit of the Bureau's annual financial statements. The data for this measure comes from the audit report issued by GAO after the close of the fiscal year, which is provided to the CFPB directly and published on GAO's website. For the performance goal related to distribution of funds, the data is provided on an ongoing basis by the payments administrator assigned to each case. • Level of accuracy and data verification: For the audit opinion performance goal, the data comes from and is verified against the audit report issued by GAO annually. GAO performs its review in accordance with Generally Accepted Government Auditing Standards. For the distribution of funds performance goal, the CFPB reviews the data continuously and reviews up front the timelines by which the victim lists are approved and the date distributions commence. • Advantages, limitations, and mitigating actions: No data limitations are known to affect this indicator. OUTCOME 4.4 • Data sources: The CFPB's External Affairs Division tracks progress toward the outcome through the division's Quarterly Performance Reviews. • Level of accuracy and data verification: The CEPB's External Affairs Division verifies and validates data quarterly by reviewing the CFPB s blog, newsroom, and other materials (which are publicly available on the Bureau's website) that announce, report on, and otherwise provide information about public events hosted by the CFPB. • Advantages, limitations and mitigating actions: No data limitations are known to affect this indicator. CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT 107 Management challenges As identified by CFPB's OIG, the CFPB faces challenges in the areas of information security, workforce management, controls over management operations, and physical infrastructure.29 As part of its ongoing, continuous improvement efforts, the CFPB is addressing these challenges. 1. Ensuring an Effective Information Security Program The 0-TB's OIG has identified information security as a major management challenge for the CFPB due to the advanced, persistent threat to government information technology (IT) infrastructure. IMPROVING THE INFORMATION SECURITY PROGRAM The CFPB continues to mature and improve its information security program to align with new guidance provided by the National Institute of Standards and Technology. Improvements include enhancements to automation, centralization, and implementation, including in the area of continuous monitoring, to ensure that the requirements of the Federal Information Security Management Act of 2002, as amended by the Federal Information Security Modernization Act of 2014 (FISMA), are met. While improvements have been made, additional work is needed in four high-priority security risk areas: continuous monitoring, configuration management, security training, and incident response and reporting. ENSURING THE SECURITY OF CONTRACTOR-OPERATED INFORMATION SYSTEMS The CFPB also faces challenges in ensuring that contractors implement information security controls that meet agency requirements. The risks associated with contractor-provided services can be heightened in cloud computing-based environments because the agency may have limited insight or knowledge of the security processes of contractors. TRANSITIONING INFORMATION SECURITY AND IT RESOURCES FROM TREASURY TO THE CFPB'S INFRASTRUCTURE Although the CFPB has made significant progress, the Bureau still faces challenges in transitioning information security and IT resources from Treasury and building its IT infrastructure. PROTECTING PERSONALLY IDENTIFIABLE INFORMATION While protecting consumers, ensuring regulatory compliance, and monitoring the consumer financial marketplace for risks to consumers, the CFPB collects, processes, stores, and shares 29 Office of Inspector General: Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, ems List of Major Management Challenges for the CFPB, http://oigiederalreserve.govireports/cfpb-management-challenges-sepems.pdf 108 CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT privacy-related information associated with consumer financial products and services. The CFPB may share PII to fulfill its enforcement responsibilities or statutory or regulatory requirements. CFPB has signed memorandums of understanding with federal, state, and local government entities regarding the potential sharing of data and the treatment of shared data. GAO conducted an audit of the CFPB in September 2014 and found that the CFPB lacks written procedures and comprehensive documentation for a number of processes and has not yet fully implemented a number of privacy control steps and information security practices. AGENCY ACTIONS The CFPB has taken steps to develop, document, and implement an information security program. The Bureau has also made progress in centralizing its information security program by building out its Cybersecurity Program Management Office, which engages with oversight teams to implement the cybersecuritv program at the CFI% The CFPB has also taken steps to promote collaboration among security, IT, and procurement staff to ensure that security requirements for third-party contractors are identified and accounted for during solicitations. The CFPB developed a phased approach to transitioning IT services from Treasury and developing its IT infrastructure. The CFPB has already transitioned e-mail, file shares, mobile devices, Active Directory, remote access, the wide area network, SharePoint, and laptop images to CFPB-managed infrastructure. The CFPB hired a Chief Data Officer, who leads a set of teams that work closely with the Chief Information Security Officer to ensure that data are protected. One primary focus of the Chief Data Officer is to provide centralized data governance and management of CFPB data sets. In this role, the Chief Data Officer is also charged with implementing the CFPB's Information Governance Policy and addressing many of GAO's findings. Further, the CFPB has a Chief Privacy Officer, who is responsible for the agency's privacy compliance and operational activities. 2. Building and Sustaining a High-Performing and Diverse Workforce A key outcome for the CFPB's strategic goal of advancing the agency's performance by maximizing its resource productivity and enhancing its impact is attracting, engaging, and deploying a high-performing and diverse workforce. The CFPB faces challenges in meeting this goal, however, due to competition from other employers for the highly qualified staff that the CFPB needs to fulfill its mission. Further, as the Bureau seeks to build and sustain a highperforming and diverse workforce, it will need to strengthen workforce planning and develop an improved performance management system. CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT 109 RECRUITING AND RETAINING A HIGHLY SKILLED, DIVERSE WORKFORCE In order to remain competitive, the CFPB must successfully address evolving expectations regarding diversity, workplace flexibility, career progression, communication, and continuous learning. Another important consideration for the CFPB in recruiting and retaining staff is engaging in succession planning. The CFPB supports the development of a diverse, highly qualified employee base and recognizes that there is an opportunity to increase minority representation, specifically in certain missioncritical positions. Although the CFPB has taken steps to enhance its diversity and inclusion practices, there are opportunities that exist for the CFPB to enhance diversity and inclusion efforts, such as implementing a diversity and inclusion strategic plan as well as a formal succession planning process. DEVELOPING AND IMPLEMENTING A NEW PERFORMANCE MANAGEMENT SYSTEM The CFPB faces challenges in developing and implementing a new performance management system. The OIG's prior audit work noted that there were statistically significant differences in CFPB employees' performance ratings for FY 2012 and FY 2013 based on gender, race/ethnicity, and age. The CFPB has taken several actions to address these differences in its performance ratings. Specifically, the CFPB commissioned an independent third-party review to analyze the potential root causes of the rating disparities and to examine the sufficiency of the CFPB's efforts to understand and address these disparities. Also, the CFPB transitioned to a two-level performance management system for FY 2014 and FY 2015, and it has been working with the National Treasury Employees Union to develop a new performance management system for FY 2016 and beyond. AGENCY ACTIONS The CFPB has made a number of improvements to its human capital processes. For example, the CFPB developed more robust competency models for all CFPB positions. This effort resulted in the development of competency models that help to support a variety of human resource practices and functions, such as the succession planning process and performance management system. In addition, the CFPB has begun the Workforce of the Future initiative, which is intended to ensure that the CFPB has a skilled and productive workforce to fulfill its mission for the long term. This initiative includes an articulation of how the CFPB s practices should evolve to create the workforce experience that enables people to do their best work for sustainable, long-term impact. The CFPB also placed the Office of Minority and Women Inclusion and the Office of Civil Rights under a newly formed Office of Equal Opportunity and Fairness within the Office of the Director. The CFPB has taken several steps to recruit and retain a highly qualified, diverse workforce. For 110 CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT example, the CFPB recruited applicants from a broad range of geographical areas, continued to review data to identify underrepresentation, and targeted its recruiting to ensure that the agency reaches a diverse pool of talent. To ensure workforce retention, the CFPB has taken a number of steps, including using career ladders, providing opportunities for cross-functional work within and outside the agency, providing training opportunities, and fostering a mission-focused work environment. The CFPB has also conducted listening sessions with its employees to identify and respond to perceptions of fairness, equality, diversity, and inclusion. The CFPB has made progress in developing a new performance management system. In addition to creating new standard operating procedures for performance management program evaluation, compliance, training attendance, and training evaluation, it established a joint labormanagement working group with the National Treasury Employees Union to further improve the performance management program. 3. Strengthening Controls Over Management Operations The CFPB continues to implement management processes and controls as it seeks to provide effective oversight of the consumer financial marketplace. Recognizing the importance of internal controls, the CFPB established a team in the Office of the Chief Financial Officer to review, monitor, and improve internal control. CFPB's OIG noted that the CFPB needs to strengthen its controls over contract management and can improve its information system security controls and management controls related to the Consumer Complaint Database. STRENGTHENING OPERATIONAL CONTROLS The OIG's recent work identified several areas to strengthen operational controls: reviewing and revising policies and procedures governing travel and improving contract management controls and oversight. STRENGTHENING CONTROLS FOR THE CONSUMER COMPLAINT DATABASE In June 2015, the CFPB enhanced the Consumer Complaint Database to include consumer complaint narratives. CFPB s OIG audit and evaluation work identified opportunities to improve information system security controls and management controls related to the Consumer Complaint Database. AGENCY ACTIONS The CFPB has made progress in implementing internal controls for its key management operations. For example, in response to the control deficiencies that were identified in the CFPB s contracting activities, the agency has started implementing corrective actions. Further, the CFPB identified several areas on which to focus, including the development, review, and revision CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT 111 of policies and procedures for procurement. In addition, the CFPB has taken steps to improve the reliability and timeliness of the data in the Consumer Complaint Database and the related secure information systems. 4. Maintaining Physical Infrastructure The CFPB is currently renovating its headquarters building, managing swing space until the renovation is complete, and planning to establish office space in its Southeast region. HEADQUARTERS RENOVATION The headquarters building that the CFPB is leasing has not undergone significant renovation since it was constructed in 1976. The CFPB headquarters renovation is a multi-year project that poses several challenges for the CFPB, including managing and mitigating schedule and cost risks. The CFPB has partnered with GSA to assist with the renovation project. As the renovations move forward, the CFPB will need to ensure that management control activities associated with the renovation project are operating effectively. SPACE PLANNING CFPB employees are currently occupying office space in two locations while the headquarters renovation is ongoing. Once the renovation is complete, the headquarters building will only accommodate a portion of the displaced employees; thus, additional space will still be required. The CFPB will need to determine an optimal location for those employees not returning to the headquarters building while managing and mitigating schedule and cost risks. The CFPB should continue to ensure that its space needs are managed appropriately as it seeks to obtain office space for its Southeast region. AGENCY ACTIONS The CFPB established a memorandum of understanding with GSA to provide assistance with its renovation needs. The construction management contract includes specific controls aimed at managing costs throughout the design and construction phases of the renovation project so that the renovation budget is not exceeded. In addition, the construction contract type and delivery method is expected to help ensure that the budget is not exceeded and to give the CFPB additional control over the design and corresponding costs. The CFPB plans to coordinate with GSA regarding its space needs for personnel at the headquarters location and in the Southeast region 112 CFPB STRATEGIC PLAN BUDGET, AND PERFORMANCE PLAN AND REPORT Appendix B: Organizational chart cy. ydanne,. rarer- 1011‘. [IItO Last updated January 11 2016 CFPB STRATEGIC PLAN, BUDGET, AND PERFORMANCE PLAN AND REPORT 113 Contact us Online consumerfinance.gov er- By phone Toll free: (855) 411-CFPB (2372) TTY/TDD : (855) 729-CFPB (2372) By fax (855) 237-2392 E By mail Consumer Financial Protection Bureau 1700 G Street, NW Washington, D.C. 20552 Consumer Financial Protection Bureau JEB HENSARLING. TX CHAIRMAN Unitob 'tate ipotiOt of ikrproOrntatawS MAXINE WATERS. CA RANKING MEMBER Committic on financial ScrtOrt5 11),151ungtan, aC. 20.313 May 17, 2017 The Honorable Richard Cordray Director Bureau of Consumer Financial Protection 17006 Street NW Washington, D.C. 20552 Dear Director Cordray: Thank you for your letter dated April 28, 2017 responding to House Financial Services Committee ("Committee") Chairman Jeb Hensarling's request that your agency decline to produce any Committee communications, agency responses to Congressional inquiries, or any other congressional records in response to Freedom of Information Act ("FOIA") requests. While 1 understand that you have agreed to comply in part with the Chairman's policy, 1 write to clarify that I do not share the Chairman's position. I have long understood that my and my staffs communications with executive branch agencies are subject to FOIA disclosure barring an explicit assertion on my part to retain control over such documents. While Chairman Hensarting has chosen to make this assertion, I want to be clear that he does not speak on my behalf in this instance. It is my position that my correspondence with your agency, should you deem it responsive to public FOIA requests, not be subject to exemption. If you have any questions, please contact Kevin Burris or Jennifer Read at (202) 225-4247. Sincerely, ters Ranking ember Committee on Financial Services cc: The Ilonorable Jeb Hensarling, Chairman