[House Report 113-349]
[From the U.S. Government Publishing Office]
113th Congress Rept. 113-349
HOUSE OF REPRESENTATIVES
2d Session Part 1
======================================================================
CFPB PAY FAIRNESS ACT OF 2013
_______
February 10, 2014.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 2385]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 2385) to amend the Dodd-Frank Wall Street Reform
and Consumer Protection Act to set the rate of pay for
employees of the Bureau of Consumer Financial Protection in
accordance with the General Schedule, having considered the
same, report favorably thereon without amendment and recommend
that the bill do pass.
Purpose and Summary
H.R. 2385, the CFPB Pay Fairness Act of 2013, amends the
Dodd-Frank Wall Street Reform and Consumer Protection Act (the
``Dodd-Frank Act'') to require the Consumer Financial
Protection Bureau (CFPB) to pay its employees according to the
General Schedule set forth in section 5332 of title 5 of the
United States Code.
Background and Need for Legislation
Under current law, the rates of basic pay for CFPB
employees are set and adjusted by the Director of the CFPB.
Compensation (including benefits) for classes of employees must
be comparable to the compensation and benefits being provided
by the Board of Governors of the Federal Reserve System for
corresponding classes of employees.
As of September 30, 2013, the CFPB had 1,335 employees and
spent $190.2 million on employee salaries and benefits,
according to the Fiscal Year 2013 Financial Report of the
Consumer Financial Protection Bureau.\1\
---------------------------------------------------------------------------
\1\Fiscal Year 2013 Financial Report of the Consumer Financial
Protection Bureau (Dec. 11, 2013) http://files.consumerfinance.gov/f/
201312_cfpb_report_financial-report.pdf.
---------------------------------------------------------------------------
Based on the foregoing numbers and report, the CFPB pays
its employees an average of $142,000 per employee, or 3.3 times
the mean per capita personal income in the United States
($43,000). According to a July 2013 article in the Washington
Examiner:
``Six-figure salaries go to 741 employees . . .
Fifty-six CFPB officers earn more than all presidential
cabinet secretaries who earn $199,500.
There are 173 agency staff who earn more than all elected
Members of Congress and 209 employees who earn more than all 50
U.S. governors. . . .
Fourteen agency staffers are paid more than Vice President
Biden who earns $227,000.
Nineteen CPFB staffers earn more than Speaker of the House
John Boehner, who is third in line for succession to the
presidency and is paid $223,500.
Thirty-seven CFPB employees get more than eight Supreme
Court justices, who are paid $213,500. Nineteen CFPB staffers
make more than Chief Justice John Roberts who gets $223,500.
Top White House salaries are capped at $172,200, but 181
employees are paid more than the president's chief of staff,
senior counsel and press secretary.''\2\
---------------------------------------------------------------------------
\2\Richard Pollock, ``Fat paychecks for CFPB officials, hundreds
paid more than Fed Chairman, congressmen, Supreme Court justices,''
Washington Examiner (July 18, 2013), available at http://
washingtonexaminer.com/fat-paychecks-for-cfpb-officials-hundreds-paid-
more-than-fed-chairman-congressmen-supreme-court-justices/article/
2533189.
---------------------------------------------------------------------------
H.R. 2385 curbs these excessive salaries by requiring CFPB
to follow the salary schedule used by most agencies in the
Federal government.
Hearings
The Committee on Financial Services' Subcommittee on
Financial Institutions and Consumer Credit held a hearing on
H.R. 2385 on October 29, 2013. The Subcommittee on Oversight
and Investigations held a hearing on the CFPB's budget
generally on June 18, 2013.
Committee Consideration
The Committee on Financial Services met in open session on
November 20, 2013, and ordered H.R. 2385 to be reported
favorably to the House without amendment by a recorded vote of
31 yeas to 23 nays (recorded vote no. FC-41), a quorum being
present.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
1. A motion by Chairman Hensarling to report the bill (H.R.
2385) without amendment to the House with a favorable
recommendation was agreed to by a record vote of 31 yeas to 23
nays (recorded vote no. FC-41).
RECORD VOTE NO. FC-41
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Hensarling................. X ........ ......... Ms. Waters....... ........ X .........
Mr. Bachus..................... X ........ ......... Mrs. Maloney (NY) ........ X .........
Mr. King (NY).................. X ........ ......... Ms. Velazquez.... ........ X .........
Mr. Royce...................... X ........ ......... Mr. Watt......... ........ X .........
Mr. Lucas...................... X ........ ......... Mr. Sherman...... ........ X .........
Mr. Gary G. Miller (CA)........ X ........ ......... Mr. Meeks........ ........ X .........
Mrs. Capito.................... X ........ ......... Mr. Capuano...... ........ X .........
Mr. Garrett.................... X ........ ......... Mr. Hinojosa..... ........ X .........
Mr. Neugebauer................. X ........ ......... Mr. Clay......... ........ ........ .........
Mr. McHenry.................... X ........ ......... Mrs. McCarthy ........ ........ .........
(NY).
Mr. Campbell................... ........ ........ ......... Mr. Lynch........ ........ X .........
Mrs. Bachmann.................. X ........ ......... Mr. David Scott ........ X .........
(GA).
Mr. McCarthy (CA).............. X ........ ......... Mr. Al Green (TX) ........ X .........
Mr. Pearce..................... X ........ ......... Mr. Cleaver...... ........ X .........
Mr. Posey...................... ........ ........ ......... Ms. Moore........ ........ X .........
Mr. Fitzpatrick................ X ........ ......... Mr. Ellison...... ........ X .........
Mr. Westmoreland............... X ........ ......... Mr. Perlmutter... ........ ........ .........
Mr. Luetkemeyer................ X ........ ......... Mr. Himes........ ........ X .........
Mr. Huizenga (MI).............. X ........ ......... Mr. Peters (MI).. ........ X .........
Mr. Duffy...................... X ........ ......... Mr. Carney....... ........ X .........
Mr. Hurt....................... X ........ ......... Ms. Sewell (AL).. ........ X .........
Mr. Grimm...................... X ........ ......... Mr. Foster....... ........ X .........
Mr. Stivers.................... X ........ ......... Mr. Kildee....... ........ ........ .........
Mr. Fincher.................... X ........ ......... Mr. Murphy (FL).. ........ X .........
Mr. Stutzman................... X ........ ......... Mr. Delaney...... ........ X .........
Mr. Mulvaney................... X ........ ......... Ms. Sinema....... ........ X .........
Mr. Hultgren................... X ........ ......... Mrs. Beatty...... ........ X .........
Mr. Ross....................... X ........ ......... Mr. Heck (WA).... ........ X .........
Mr. Pittenger.................. X ........ .........
Mrs. Wagner.................... X ........ .........
Mr. Barr....................... X ........ .........
Mr. Cotton..................... X ........ .........
Mr. Rothfus.................... X ........ .........
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Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has held hearings and
made findings that are reflected in this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 2385
requires the CFPB to pay its employees according to the General
Schedule.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimates
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 7, 2014.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2385, the CFPB Pay
Fairness Act of 2013.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susan Willie.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
H.R. 2385--CFPB Pay Fairness Act of 2013
Summary: H.R. 2385 would set basic compensation rates for
employees of the Bureau of Consumer Financial Protection (CFPB)
according to the General Schedule (GS) for federal employees.
Under current law, pay rates at the CFPB are comparable to
rates paid to employees of the Federal Reserve System in
corresponding job classes.
CBO estimates that enacting H.R. 2385 would reduce direct
spending by $280 million over the 2014-2024 period; therefore,
pay-as-you-go procedures apply. CBO estimates that enacting
H.R. 2385 would not affect revenues, and implementing the bill
would not affect spending subject to appropriation.
H.R. 2385 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2385 is shown in the following table.
The costs of this legislation fall within budget function 370
(commerce and housing credit).
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By fiscal year, in millions of dollars--
-------------------------------------------------------------------------------------------------------------
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014-2019 2014-2024
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CHANGES IN DIRECT SPENDING
Estimated Budget Authority................ 0 -25 -26 -27 -27 -28 -29 -30 -30 -31 -32 -133 -285
Estimated Outlays......................... 0 -21 -26 -27 -27 -28 -29 -30 -30 -31 -32 -130 -280
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Note: Components may not sum to totals because of rounding.
Basis of estimate: For this estimate, CBO assumes that the
bill will be enacted near the middle of fiscal year 2014, that
its provisions will become effective at the start of fiscal
year 2015, and that spending will follow historical patterns
for the CFPB. The CFPB is permanently authorized to spend
amounts transferred from the Federal Reserve; because that
activity is not subject to appropriation, CFPB expenditures are
recorded in the budget as direct spending. CBO estimates that
enacting the provisions of H.R. 2385 would reduce direct
spending by installing a new salary schedule at the CFPB with
lower rates at every pay grade.
When the CFPB was established in 2010, employee
compensation rates were set based on the salary structure then
in place at the Federal Reserve System for corresponding
classes of employees. The CFPB compensation system is made up
of 17 pay bands that can be compared with the General Schedule.
At the start of fiscal year 2014, the bureau employed about
1,375 individuals at salaries ranging from an average of about
$31,000 in the lowest pay band to an average of almost $250,000
in the highest pay band; the average annual salary for all
bureau employees was approximately $116,000. For 2014, average
GS salaries range from about $25,000 in the lowest pay band to
about $143,000 per year in the highest pay band.
For this estimate, CBO assumes that the bureau would make
the necessary changes in the pay structure to ensure that each
employee is paid at the appropriate GS rate for the work that
employee performs. Without detailed information about the
distribution of salaries within each pay band, we compared the
average salary in each pay band of the bureau with the average
salary for the comparable GS pay band to determine the average
difference in annual salary at each level. That calculation
shows that there is about a 13 percent difference between the
salaries under the two compensation systems.
Based on information provided in annual budget reports of
the CFPB, CBO estimates that about 33 percent of the bureau's
total obligations represent employee compensation, or almost
$200 million per year, on average, over the 2014-2024 period.
CBO estimates that enacting H.R. 2385 would reduce direct
spending by about $30 million per year, or $280 million over
the 2014-2024 period, reflecting lower salary rates under the
General Schedule as well as lower costs for employee retirement
benefits that are based on salary levels. Savings in future
years would increase as total employee compensation costs for
the bureau are expected to grow.
Those savings could be lower depending on, for example, how
employees respond to the pay rate differences, whether the
agency changes the amount of work performed by employees and
private contractors, or whether the agency increases other
sources of compensation such as bonuses. CBO has no information
indicating whether those or similar actions would be taken by
the bureau, and therefore has no basis for determining the
magnitude of such effects. We expect that implementing the new
pay structure would take several months; therefore, savings
would not start until 2015.
Pay-As-You-Go Considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 2385, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON FINANCIAL SERVICES ON NOVEMBER 21, 2013
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By fiscal year, in millions of dollars--
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2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014-2019 2014-2024
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NET DECREASE IN THE DEFICIT
Statutory Pay-As-You-Go Impact............ 0 -21 -26 -27 -27 -28 -29 -30 -30 -31 -32 -130 -280
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Note: Components may not sum to totals because of rounding.
Intergovernmental and private-sector impact: H.R. 2385
contains no intergovernmental or private-sector mandates as
defined UMRA.
Estimate prepared by: Federal costs: Susan Willie; Impact
on state, local, and tribal governments: Melissa Merrell;
Impact on the private sector: Paige Piper/Bach.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
H.R. 2385 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Duplication of Federal Programs
Pursuant to section 3(j) of H. Res. 5, 113th Cong. (2013),
the Committee states that no provision of H.R. 2385 establishes
or reauthorizes a program of the Federal Government known to be
duplicative of another Federal program, a program that was
included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance.
Disclosure of Directed Rulemaking
Pursuant to section 3(k) of H. Res. 5, 113th Cong. (2013),
the Committee states that H.R. 2385 does not direct any
rulemaking.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section cites H.R. 2385 as the ``CFPB Pay Fairness Act
of 2013.''
Section 2. Rate of pay for employees of the Bureau of Consumer
Financial Protection
This section requires the CFPB to pay its employees
according to the General Schedule set forth in section 5332 of
title 5, United States Code. The section states that the pay
rate change shall apply to service by an employee of the CFPB
following the 90-day period after enactment.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
* * * * * * *
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION
* * * * * * *
Subtitle A--Bureau of Consumer Financial Protection
* * * * * * *
SEC. 1013. ADMINISTRATION.
(a) Personnel.--
(1) * * *
[(2) Compensation.--Notwithstanding any otherwise
applicable provision of title 5, United States Code,
concerning compensation, including the provisions of
chapter 51 and chapter 53, the following provisions
shall apply with respect to employees of the Bureau:
[(A) The rates of basic pay for all employees
of the Bureau may be set and adjusted by the
Director.
[(B) The Director shall at all times provide
compensation (including benefits) to each class
of employees that, at a minimum, are comparable
to the compensation and benefits then being
provided by the Board of Governors for the
corresponding class of employees.
[(C) All such employees shall be compensated
(including benefits) on terms and conditions
that are consistent with the terms and
conditions set forth in section 11(l) of the
Federal Reserve Act (12 U.S.C. 248(l)).]
(2) Compensation.--The rates of basic pay for all
employees of the Bureau shall be set and adjusted by
the Director in accordance with the General Schedule
set forth in section 5332 of title 5, United States
Code.
* * * * * * *
Waiver of Consideration by the Committee on Oversight and Government
Reform
MINORITY VIEWS
By tying compensation for employees of the Consumer
Financial Protection Bureau (CFPB or Bureau) to the General
Schedule for federal employees and eliminating the requirement
for the Bureau to provide employees with benefits and
compensation that are comparable to the corresponding class of
Federal Reserve employees, the bill undermines the Bureau's
ability to hire and retain qualified staff who may otherwise
seek employment at another financial regulator or within the
private sector. We note that all other financial regulators,
including the Farm Credit Administration (FCA), Federal Housing
Finance Agency (FHFA), Federal Deposit Insurance Corporation
(FDIC), Federal Reserve (FRB), Commodity Futures Trading
Commission (CFTC), Securities and Exchange Commission (SEC),
National Credit Union Administration (NCUA) and the Office of
the Comptroller of the Currency (OCC), are all able to offer
more competitive compensation packages than those provided
under the General Schedule.
Consumer protection is a critical element of financial
regulation, and we believe the CFPB should have the same
flexibility to set employee compensation and benefits as other
financial regulators. As a matter of fact, the CFPB is required
under the Financial Institutions Reform, Recovery and
Enforcement Act (FIRREA) to offer compensation that is
comparable to and consistent with other financial regulators,
which would be impossible under the General Schedule.
In addition to competing with other federal agencies, the
Bureau must compete for staff with the financial services
industry, which is willing to pay a premium for professionals
with the expertise and skills necessary to perform complicated
regulatory analysis. Reducing the Bureau's ability to
compensate staff appropriately would make it harder for the
CFPB to attract and retain the qualified, experienced staff
that is needed to ensure the use of CFPB's supervisory,
enforcement and rulemaking authority is balanced and
appropriate.
Maxine Waters.
Keith Ellison.
David Scott.
Stephen F. Lynch.
Michael E. Capuano.
Kyrsten Sinema.
Carolyn B. Maloney.
Bill Foster.
Joyce Beatty.
Al Green.
Daniel Kildee.
Denny Heck.
James A. Himes.
John Carney.
Gregory W. Meeks.
Gwen Moore.
Terri Sewell.
Wm. Lacy Clay.
Patrick Murphy.
Ed Perlmutter.
Ruben Hinojosa.
Brad Sherman.
Emanuel Cleaver.