Commentary Magazine


The CFPB Pays Itself—and Very Well Too

One of the reasons the compensation of CEOs has been rising so quickly in recent decades—much to the distress of the left—is that very often they get to determine for themselves what their compensation will be. To be sure, it is the board that actually sets the figure, but corporate boards are, all too often, effectively controlled by top management, not the other way around. And even in companies where the boards rule, the fact that other companies are paying their top executives more puts pressure on them to keep pace.

That doesn’t happen in the federal government, where the salaries and perks of the vast bureaucracy are set by act of Congress.

Except, of course, for the Consumer Financial Protection Bureau established by Dodd-Frank. The CFPB is not an agency of the executive branch of the government, but rather a part of the Federal Reserve, although not subject to any oversight by the Fed. Indeed, effectively it is not subject to any oversight at all, an open invitation to abuse its power. As the Founding Fathers understood, those sorts of invitations are always, sooner or later, accepted.

Nor is it funded by congressional appropriation. It simply tells the Federal Reserve how much money it needs and the Fed sends over a check.

And its employees’ compensation is not determined by congressional act. It is set by the CFPB.

So guess what. Just as with many CEOs, it pays its employees very well indeed. According to the Washington Examiner, there are no fewer than 56 CFPB employees who earn more than the $199,700 salary earned by Fed Chairman Ben Bernanke.  The average salary at the CFPB is $118,000, and fully 61 percent of the employees earn more than $100,000. The Examiner reports that, “The top grossing CFPB employee is Gail K. Hillebrand who receives $251,288. She is assistant director for consumer education and engagement. Previously, Hillebrand was a marketing manager at Consumers Union.”

The top-paid bureaucrats in the executive branch—GS-15, step 10—who are based in Washington earn $155,500 in salary.

The Nancy Pelosi 111th Congress abandoned its most potent constitutional powers, the power of the purse and the power of oversight, in creating this constitutional outrage. We’ll probably have to wait until at least 2017 to undo it.