Politics & MoneyMortgage

Republican lawmakers move to slash CFPB employees’ pay

Sen. Mike Enzi, Rep. Sean Duffy introduce bill to cut CFPB compensation

One of Mick Mulvaney’s first actions after he took over as acting director of the Consumer Financial Protection Bureau was to institute a hiring freeze, stipulating that the bureau could not hire any new employees for at least 30 days.

But if two of Mulvaney’s former Congressional colleagues have their way, the CFPB’s current employees could be left feeling a freeze of their own – vastly reduced salaries.

On Thursday, two prominent Republicans introduced a bill in both the Senate and the House of Representatives that would “rein in” the CFPB’s pay structure.

The bill, called the “CFPB Pay Fairness Act of 2017,” was introduced by Sen. Mike Enzi, R-Wyoming, who serves as chairman of Senate Budget Committee, and Rep. Sean Duffy, R-Wisconsin, who chairs the House Financial Services Subcommittee on Housing & Insurance.

The bicameral legislation would requires the CFPB’s director to set the basic rates of pay for bureau employees in accordance with the federal government’s General Schedule, which applies to most federal agencies.

The CFPB is funded by the Federal Reserve and its salaries are determined on a different scale, one that stipulates that bureau employees are paid more than other government agency employees, in some cases.

According to Enzi, some CFPB employees make more than prominent members of the government.

“The need for Congress to bring accountability to the Consumer Financial Protection Bureau is long overdue and the bureau’s lavish spending on employee salaries is a key example of why,” Enzi said in a statement.

“There are hundreds of employees at the Consumer Financial Protection Bureau making more than governors, Supreme Court justices and senior White House Staff, and Congress lacks the usual constitutional checks to rein in this behavior,” Enzi continued. “Although it might just sound like common sense, this bill would ensure the bureau is keeping employees’ salaries in line with the regular government pay scale. Hopefully this is the start of many needed reforms.”

Under Enzi and Duffy’s bill, the new rates of pay would go into effect for all employees 90 days after the enactment of the bill.

As Bloomberg noted about a year ago, this wouldn’t be the first time that Republicans have tried to curtail CFPB employee pay.

Duffy previously introduced the “CFPB Pay Fairness Act of 2013,” which passed out of committee and was then rolled into larger legislation that passed in the House in 2014, but did not pass in the Senate.

According to the Bloomberg report, Duffy’s language on CFPB employee pay was included in the Financial CHOICE Act, the Republican-crafted rollback of the Dodd-Frank Wall Street Reform Act.

The bill passed in the House earlier this year and is currently under consideration in the Senate.

The Bloomberg article notes that by switching from the CFPB’s current pay scale to the general schedule, many bureau employees would see their salaries cut by as much as 25%.

From Bloomberg:

The pay-scale reclassification could amount to a 25 percent reduction in the annual salary of a CFPB employee, Tom Pahl, a former CFPB lawyer who is a partner at Arnall Golden Gregory LLP in Washington, told Bloomberg BNA.

“If you were to see a 20 to 25 percent drop in the pay of an existing employee, I think people would give some thought as to how well they could do with other options—a private law firm, for example,” he said. “Going forward, I think it would have more of an effect on an ability to recruit.”

While Enzi and Duffy say that putting a damper on CFPB hiring is not the goal of this bill, one would have to assume they’d be pleased if the CFPB suddenly found it hard to recruit new employees or witnessed a mass employee exodus due to reduced salaries.

“The CFPB is dangerously unaccountable to the American people because Democrats intentionally designed it that way,” Duffy said.

“As a result, they can act as a bully to small banks and credit unions, push a far-left agenda, and spend lavishly on bureaucrat salaries that are obscenely higher than the vast majority of public servants,” Duffy continued. “The agency must be reined in and held accountable, and the Pay Fairness Act, which sets basic pay rates in accordance with the federal government’s General Schedule, is an important step in giving the American people a say in how this rogue agency functions.”

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