Gentleman bank robber Willie Sutton is famously (and incorrectly) remembered for saying he robbed banks “because that’s where the money is.”

Turns out though, the real money is in being a bank regulator.

Or a financial regulator of most any type, at least at the federal level.

Paul Kupiec is a resident scholar at the American Enterprise Institute, and he writes in the Wall Street Journal that 93% of the employees at federal regulatory agencies including the Consumer Financial Protection Bureau and the Federal Deposit Insurance Corp.earned more than the average banker's salary in 2012, the latest year for data.

That’s all employees, not just executives, including secretaries and drivers.

(Update: Matt Levine at Bloomberg takes a ham-fisted and transparent swipe at Kupiec today, completely dodging the facts when the reality is that the Bureau of Labor Statistics shows that the average annual salary of a bank employee was $49,540 in 2012, not the high rate of the top investment banks he cherry picks. He also conspicuously ignores the fact that the salaries at the primary regulatory agencies isn't for highly skilled positions, but even the most pedestrian jobs. Judge for yourself if you can get past the weak-sauce lead.)

Kupiec would know something of the subject. He used to be a federal regulator. Kupiec held senior positions at the FDIC, the International Monetary Fund, and the Federal Reserve Board, and served as chairman of the research task force of the Basel Committee on Banking Supervision.

Before the Dodd-Frank Act, the average employee of a federal bank regulatory agency received 2.3 times the average compensation of a private banker. By 2013 this ratio increased to more than 2.7—and in some cases considerably more.

The average compensation at the (OCC, FDIC) and the Consumer Financial Protection Bureau exceeded $190,000 in 2012. The staff at the Federal Reserve is likely even better compensated, but the Fed refuses to release employee salaries.

You might think high-paying jobs at these agencies require special skills. Not so. At the OCC, secretaries make on average $79,182 per annum. … Human resources management trainees at the CFPB make $110,759 a year.

This state of affairs came about as the result of good intentions with unintended consequences.

These bloated salaries trace back to the savings-and-loan crisis of the 1980s, which was attributed in part to regulators' inability to attract and retain experienced bank supervisors. The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 permitted federal bank regulatory agencies to establish their own compensation and benefits without the approval of the Office of Personnel Management.

This is not just a matter of a few senior regulation executives skewing the numbers with high salaries, either.

In 2012, 68% of FDIC and CFPB staff—and 66% at the OCC—earned above $100,000 a year. Nearly 19% of the CFPB and OCC staff earn more than $180,000 a year. At the OCC, 10.5% of workers earn above $200,000 a year, at the FDIC 9.3%.

Fewer than 7% of employees in any of these regulatory agencies earned less than $50,000.

Bank shareholders pay the freight for these salaries for bank regulators, which get passed on to customers.

In the case of the CFPB?

The high compensation of CFPB employees is funded by taxpayers through the Federal Reserve.

Kupiec isn’t saying regulators shouldn’t be paid well and accordingly. It’s just that these ridiculously high salaries are so far out of whack with the industry they regulate.

The runaway labor costs of these regulator agencies are not subject to congressional control, and they add up. Employee compensation accounts for about 80% of the operating costs of bank regulatory agencies. If the average regulatory employee's compensation were equalized between bankers and regulators, the direct cost of bank regulation would fall by more than 50%.

Willie Sutton should get with the times?