Pay inequities at the CFPB

The Consumer Financial Protection Bureau was established in 2011 to protect consumers from "unfair, deceptive, or abusive acts and practices and from discrimination" and "ensure that all consumers have access to markets for consumer financial products and services." Decades of discrimination and unequal access have contributed to a massive wealth gap in the United States, where in 2016, the net worth of a typical white household was nearly ten times greater than that of a typical Black household. In her testimony to the Senate Banking Committee on July 29, 2020, current CFPB director Kathy Kraninger acknowledged this gap and affirmed the CFPB’s commitment to closing it, stating: "Under my leadership, the CFPB is taking steps to help create real and sustainable changes in our financial system so that African Americans and other minorities have equal opportunities to build wealth and close the economic divide."

As the CFPB’s union, we believe that the CFPB should live up to its commitment to financial equality in the way it compensates its own employees. Since the CFPB has declined to release a comprehensive study on pay, members of NTEU 335 conducted their own study using the same analytic techniques they employ when examining the behavior of financial institutions. The results of this study show that, contrary to CFPB's stated goals of equity, there are clear racial disparities in pay at the CFPB.

Key findings

• We found disparities in base pay for minority employees across the CFPB. Black employees, for example, are paid a median $20,000 a year less than white employees.
• We found age, race, and gender intersectionalities in pay gaps, for example, the pay gap for Hispanic women is bigger, around $18,600 a year, than the pay gap for Hispanic employees of all genders ($16, 000).
• Disparities in base pay between white and minority employees exist even when job type, experience, and even grade are the same.
• Disparities in base pay are compounded by locality pay, merit increases, lump sum payments, and benefit contributions.

Disparities in base pay

When we examined the pay data, we found Bureau-wide pay gaps that impacted a number of protected-class groups.

• Black employees at the CFPB are paid a median $20,000 a year less than white employees.
• Hispanic women at the CFPB are paid a median $18,000 a year less than white male employees.
• Hispanic employees overall are paid a median $16,000 a year less than white employees.
• Native employees make $21,000 a year less than white employees. There are only 6 Native employees in the bargaining unit.
• Non-white employees of color as a whole (that's 334 bargaining unit employees out of 930 total, at the time of publishing) make a median $16,000 a year less than white employees.

Inequities within job types

For employees with the same job and same experience, there are large pay gaps in base salary between white and minority employees.

• Black CFPB employees are paid on average 10.2% less than white colleagues with the same job type and experience
• Hispanic employees are paid on average 8.8% less than white colleagues with the same job type and experience

Pay gaps exist for many jobs at CFPB, but the amount varies by job type.

For example:

• Non-white employees working in Communications are paid $20,547 less than their white peers
• Black analysts at the Bureau are paid $12,152 less in base salary than white analysts
• Black examiners are paid $7,606 less than white examiners
• Black operations specialists are paid $14,492 less than white operations specialists

Inequities within job grades

Base pay inequities persist even when comparing the base pay of protected groups and white employees within the same pay bands. Controlling for grade is problematic as racial disparities may manifest through differences in initial grade placement or promotion, and the union has found such disparities in its own analysis. However, we found that the racist pay gaps persist even when we hold grade constant.

• At grade 53, Black and Hispanic women are paid on average over $9,000 less per year in base salary than their white male peers
• At grade 60, Black employees are paid $10,527 less per year and Hispanic employees $14,979 less per year in base salary than white employees

• On average, Black employees make 5.9% less and Hispanic employees 6.6% less in base salary than white peers within the same job category and grade with similar federal service

Based on these findings, we ask Director Kraninger:

• Do you think that minority employees are paid less because they choose lower paying jobs?
• Are minority employees less qualified?
• Do minority employees do less work?
• Does the CFPB have a moral imperative to ensure that we do not perpetuate the Black wealth gap?

How can we address these pay inequities?

As part of contract negotiations for our 2021, NTEU 335 is proposing that the CFPB implement the following solutions to achieve equal pay:

1. Objective pay setting
2. A pay reset with new pay bands that close 2/3 of the pay gaps we document here*
3. Fair process for disputing pay

* Our data analysts estimate that 2/3 of the pay gaps result from the initial pay setting, and the remaining 1/3 result from disparities in hiring, grade placement, promotions, and retention.

November 2022 update 

During negotiations in late 2020, CFPB and the union agreed to overhaul pay-setting policies. The goal was to address racial inequity among staff members. This process was originally scheduled to be completed in 2021.

The pay overhaul has been plagued by delays caused by the CFPB and is still not complete even as 2023 approaches. CFPB staff, particularly people of color, have already missed out on nearly an entire year of increased salary, during a time when inflation has dramatically increased the price of goods and services nationwide.