Senators Introduce Bill to End Lavish Pay of Employees at Consumer Financial Protection Bureau

March 3, 2020 Updated: March 5, 2020
FONT BFONT SText size

WASHINGTON—Senate Budget Committee Chairman Mike Enzi (R-Wyo.) and four Republican colleagues say it’s time to “rein-in” the “lavish” salaries of hundreds of employees of the Consumer Financial Protection Bureau (CFPB).

“The CFPB is a dangerously unaccountable agency, and its lavish spending on employee salaries is just one example,” Enzi said March 3 in a statement announcing the bill.

The measure—The CFPB Pay Fairness Act—is co-sponsored by Sens. Thom Tillis of North Carolina, Ben Sasse of Nebraska, John Barrasso of Wyoming, and David Perdue of Georgia.

“There is little that elected representatives can do to oversee the unelected bureaucrats in charge of CFPB’s operations, except to ask questions and hope to get answers,” Enzi said.

“The agency essentially runs on autopilot, unaccountable to any branch of government. This common-sense legislation would be one step toward bringing much-needed oversight and transparency to the CFPB.”

The CFPB was created by President Barack Obama and a Democratic Congress through the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Instead of making it an executive branch agency subject to congressional oversight, the CFPB answers to the Federal Reserve Board, which also funds it, making CFPB virtually a regulatory island unto itself, answerable to no elected assembly.

The bureau regulates banks, credit card companies, mortgage firms, securities companies, debt collectors, and other financial institutions offering consumer products.

Sen. Elizabeth Warren (D-Mass.) conceived of CFPB and first proposed it in 2007 while teaching at Harvard University. She then became an assistant to Obama and was CFPB’s chief advocate in working with Congress during its creation. She began serving as a junior senator from Massachusetts in 2013.

The bureau’s novel regulatory and oversight status made it controversial from the day it opened its doors in 2011, with former Ohio Democratic Attorney General Richard Cordray as its director.

The extremely high salaries paid to many CFPB employees have been a particularly frequent target of critics. In 2017, an investigation by the Daily Caller News Foundation’s (DCNF) watchdog team found that “pay is flowing so generously at CFPB that hundreds of bureaucrats there receive more than most members of Congress.” Congressional pay was then $174,000 annually for most senators and representatives.

The DCNF also found that 201 CFPB employees made more than the $193,000 then paid to Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Chuck Schumer (D-N.Y.).

“Another 170 CFPB employees earn more than the secretaries of defense and state, the attorney general, and the Director of National Intelligence,” the DCNF said. Cabinet salaries are capped at $199,700.

Thirty-nine CFPB employees are paid higher salaries than the $230,000 earned each year by Vice President Mike Pence. Then-Federal Reserve Board Chairman Janet Yellin’s $201,700 annual salary was lower than those paid to 198 CFPB employees, according to the DCNF investigation.

“The CFPB is long-overdue for more accountability and oversight from Congress and allowing their federal bureaucrats to make significantly more money than other federal workers should end immediately,” Tillis said in the statement.

“This legislation would rightfully end this senseless waste and ensure CFPB employees are under the federal pay scale like every other government agency.”

Sasse said in the statement: “Folks shouldn’t get into government to make a quick buck.

“Public service is about serving for a time and making things better. The CFPB has gotten out of control and wants to become our fourth branch of government. We need to make sure that CFPB salaries match public servants at other agencies. The workers at this powerful agency are not above any other government employee.”

Perdue described CFPB as “a rogue agency that’s more focused on expanding its power than protecting the public.”

“Time and again, the agency has dished out malicious financial policy and created new rules and regulations without any oversight from Congress. No regulator should ever have this kind of autonomy,” he said.

The agency has also been sharply criticized for spending more than $200 million on renovations of the building it took over from the Office of Thrift Supervision.

A 2014 Federal Reserve Board Inspector General report said CFPB’s initial $55 million renovation estimate ballooned to $95 billion and that the agency also spent $150 million on improvements.

A report by the House Financial Services Committee the same year said the renovations and improvements cost “more per square foot than it cost to build the Trump World Tower ($334/square foot), the Bellagio Hotel and Casino ($330/square foot), and the Burj Khalifa in Dubai ($450/square foot).”

Contact Mark Tapscott at Mark.Tapscott@epochtimes.nyc