Attacking Federal Employee Salaries at CFPB

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By on December 11, 2017 in Agency News, Pay & Benefits with 0 Comments

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The pay system for Federal employees is a mish-mash of systems. It did not start out that way but, over time, it has evolved into a system with exceptions, variations, geographic disparity and overall confusion.

The Federal Government’s GS Pay System

The primary federal pay system is the General Schedule or the GS system. It applies to most federal employees. There are often proposals in Congress to make changes to the overall system. Most do not become law.

The GS system contains employee pay grades and there are 10 “steps” within each grade. There are also different rates paid depending on the geographic location of an employee’s place of work. Check out our GS Pay Calculator to see how the pay system works in the designated geographic areas and the differences in the pay rates.

A former Obama administration appointee who works at the Consumer Financial Protection Bureau (CFPB) filed a lawsuit claiming she was the person who should assume the role of “Acting Director” of the agency. President Trump appointed another person, Mick Mulvaney, to run the agency. A Federal Judge stepped in and removed the former Obama administration appointee and Mulvaney is now the “Acting Director” of the agency. (For more on the dispute, check out Here’s What the Turf War Over The CFPB is Really About)

Salaries Are Different—And Much Higher—At CFPB

The CFPB is unlike most other agencies. Congress cannot set its budget or enact reforms at the agency due to restrictions in the Dodd-Frank Act. The purpose of the agency is to be a consumer agency protecting the poor against financial fraud.

Politics played a major role in its creation. The agency was placed inside the Federal Reserve Board. The salaries of employees who work there do not have to conform to the GS pay scale federal employees at other department and agencies—and they do not conform to the overall GS pay scales.

Federal employees in some states (or the city of Washington) make more, sometimes much more, than federal employees in other states. Topping the list is Washington, DC with an average federal worker salary of $112,601, not including benefits. In 2016, the national average for federal employee salaries was $81,578 with a median salary of $76,131. According to a Cato report, “In 2016 total federal compensation averaged $127,259….”

Working at the federal agency to protect Americans from financial fraud can be financially rewarding. The CFPB pays much higher salaries than most other agencies. In the latest salary data available, the average federal salary at CFPB was $132,965. The median salary was $128,275.

The highest salary at the agency is $259,500 for the Associate Director, Consumer Education. Over 165 employees out of the 1,537 employees in the database for the agency make at least $200,000. 240 CFPB employees earn more than all 50 governors. By comparison, the highest  salary for a sitting Democratic governor is Pennsylvania’s Tom Wolf. He is paid $187,818 according to Ballotpedia.

Legislation to Change the Salary Structure

A bill has now been introduced in the House to change the salary structure at the agency.

The CFPB Pay Fairness Act of 2017  was introduced recently by Sean Duffy (R-WI), Chairman of the Financial Services Subcommittee on Housing & Insurance, to set the rate of pay for employees of the Bureau of Consumer Financial Protection according to the General Schedule applicable to most other federal employees.

Congressman Duffy made this comment regarding the existing salary structure of the CFPB in a press release:

The CFPB is dangerously unaccountable to the American people because Democrats intentionally designed it that way. 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. 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.

Up to 25% Pay Cut for CFPB Employees

The legislation would result in a pay cut of 20% – 25% for some agency employees. The argument against a pay cut of this amount is that it would be harder to recruit employees at a lower pay scale.

A former lawyer for the agency was quoted as follows:

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. Going forward, I think it would have more of an effect on an ability to recruit.

Other employees would presumably keep working to help poor Americans at the agency by continuing to be employed at a lower salary than they currently receive.

Prognosis for Changing Salary Structure at the CFPB?

Will the CFPB Pay Fairness Act of 2017 become law? On November 30, the bill was referred to the Committee on Financial Services and to the Committee on Oversight and Government Reform. Unless or until the bill is referred to the House and out of committee, the chances of the existing system changing is relatively low.

As of this writing, the bill is only given a 7% chance of passing. That could change significantly when it goes to the House. The biggest hurdle would be the Senate where the Republicans hold a very small majority and it is unlikely the bill will be attractive to many Democrats there.

The high profile the agency has received due to the political fight regarding agency leadership may continue. Publicity for an agency can have a negative impact on proposed legislation. Whether that turns out to be the case for the employee salary structure while the agency works its way through another of its political rumbles in Congress remains to be seen.

© 2020 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.


About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47