For more than two years, lawmakers in Congress fought over the Consumer Financial Protection Bureau’s structure. At issue was the uncontested power of the bureau’s one director and the bureau’s freedom to set its own budget, which gave the CFPB power previously unknown to a bank regulator. On July 16, with the confirmation of Richard Cordray as the bureau’s director, the battle came to a close and the bureau’s structure remains intact.
When it comes to the agency’s budget, Cordray now wields nearly indisputable power. The bureau can draw more than $550 million annually from the Federal Reserve. No one can prevent these funds from being paid out. Congress cannot stop it through appropriations, the Fed cannot withhold the money, not even the president’s Office of Management and Budget can intervene. The only check would be a new piece of legislation which would have to pass in the current Congress with bipartisan support.
Already, the bureau’s structure has proven a recipe for inflated compensation packages and multi-million-dollar renovations of the bureau’s headquarters.
While the Dodd-Frank Act requires the bureau’s compensation must be comparable to that of the Federal Reserve Board, the reality is CFPB officials are paid considerably more than their Fed counterparts. In fact, when data collected by the Washington Examiner is compared with the Fed’s pay scale, at least 47 of the CFPB’s 970 staff make more than $205,570 a year, which is the maximum amount allowed in the highest tier of the Fed’s salary structure. Over 729 of the bureau’s employees make more than $100,000 a year.
Overall, the bureau spent $134.2 million on salaries and benefits in 2012. That’s 45 percent of the agency’s $299.8 million in obligations that year and nearly 40 percent of the $343 million transferred from the Fed, according to the CFPB’s 2012 financial report completed by the U.S. Government Accountability Office.
In June, Stephen Agostini, the CFPB’s chief financial officer, told the House Committee on Financial Services that the bureau planned to renovate its Washington headquarters. The amount the bureau initially planned to spend was $55 million. The budget for the 1,200-employee bureau’s headquarters now has reached $95 million.
The CFPB created these expenditures while Richard Cordray still had to convince Congress to bestow its confirmation. One can only wonder the number of digits to come on the CFPB price-tag in the future.