Posted 7-18-18, U.S. Sen. Mike Enzi (R-Wyo) and U.S. Sen. David Perdue (R-Ga) — Enshrined in our Constitution is one of Congress’ most important responsibilities—the power of the purse. This requires lawmakers in Washington to review each and every dollar spent to ensure that the federal government is accountable to the American people. The most common way for Congress to exercise this power is through the annual appropriations process, in which lawmakers allocate money to agencies and programs. Unfortunately, there is one federal agency that operates with little or no public accountability, bypassing our system of checks and balances while collecting massive amounts of financial data on taxpayers: the Bureau of Consumer Financial Protection (BCFP), formerly known as the Consumer Financial Protection Bureau (CFPB).
The Federal Reserve gets most of its funding from interest on U.S. government securities. After paying its expenses, the Fed turns the rest of the earnings over to the U.S. Treasury which is appropriated by Congress – meaning the Fed turns all funds in except for money carved out by law for one entity, the BCFP. Since its inception in 2010, unlike every other financial regulator, the BCFP has operated completely outside of the regular congressional appropriations process because 100% of its funding comes directly from the Federal Reserve. This means a BCFP director can request up to 12 percent of the Federal Reserve’s expenses and Congress has absolutely no say in how this “watchdog” agency spends taxpayer money. There is little that elected representatives can do to oversee the unelected bureaucrats in charge of BCFP’s operations, except to ask questions and hope to get answers. The agency essentially runs on autopilot, unaccountable to any branch of government.
We both believe the BCFP is a redundant agency, but we also believe that as long as the agency persists, it should at least be subject to the annual appropriations process just like other federal agencies. Many policymakers, including BCFP Acting Director Mick Mulvaney, agree. In a recent Senate Banking Committee hearing, he asked Congress to “take away my power” by making the agency’s funding subject to congressional review. President Trump also supports this proposal, including it in his most recent budget request.
This lack of congressional control over BCFP’s budget has resulted in the agency throwing out the federal government’s General Schedule (GS) pay scale and dipping its hand deep into the cookie jar.
Currently, the average salary for BCFP employees is $136,303. That’s higher than the average salary of full-time civilian government employees ($85,285) and the average salary of all occupations ($50,620) —combined. And that does not include government benefits, which are also higher than the private sector.
Last October, 181 of the 1,548 employees at the BCFP had salaries above $200,000. Under federal law, Cabinet Secretaries are paid $199,700 so this means over one in 10 CFPB employees were making more than our nation’s Cabinet Secretaries.
According to the Office of Personnel Management (OPM), the salaries of the highest paid employees on the GS scale in 2018 are $164,200. Almost one in five employees at the BCFP are compensated $15,000 more than the highest-paid individuals on the government’s GS pay scale.
It’s clear the BCFP should be subject to regular Congressional oversight through the appropriations process, and another important reform would be to require its employees to adhere to the federal civilian employee General Schedule (GS) system in order to rein in these out-of-touch salaries. As the sponsors of the CFPB Pay Fairness Act (S. 2171), which would require BCFP employee compensation to follow the GS system, we believe rules and regulations only work if they apply to everyone.
As a government “watchdog” agency, the BCFP’s operations and funding should be subject to congressional review. By placing the agency under the appropriations process and subjecting it to the standard GS pay scale, Congress will be one step closer to ensuring the BCFP receives the oversight needed for an agency that collects enormous amounts of personal financial and consumer information.
More importantly, reigning in the BCFP will help make it more accountable and transparent to the American taxpayers—the real folks footing these salary checks.