Bank Regulators Earn More than Double the Bankers they Regulate

Federal bank regulatory agencies are on top of the banking world. Not only are they in charge of setting standards and enforcing regulations, but on average earn more than double what bank employees make.

In 2012, the average salary of a bank employee was $49,540, not far from the average $45,790 across all occupations, according to the Bureau of Labor Statistics. That same year, the average salary for employees of the Office of the Comptroller of the Currency (OCC), Consumer Financial Protection Bureau (CFPB), and the Federal Deposit Insurance Corporation (FDIC) was a whopping $119, 798 per year.

According to Paul Kupiec of the Wall Street Journal, “in 2012, 68% of FDIC and CDPB 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%.”

Furthermore, 93% of employees in these regulatory agencies earned more than $50,000 in 2012, while only 7% are making less than the average bank employee.

How and why can federal agencies get away with paying their employees so much? According to Kupiec, the inflated salaries were created by The Financial Intuitions Reform, Recovery, and Enforcement Act of 1989 which permitted federal bank regulatory agencies to set their own compensation and benefits without approval from the Office of Personnel Management (OPM). The reform was originally intended to alleviate the savings-and-loan crises of the 1980s by allowing the agencies to obtain and afford highly specialized talent, but has led to salaries of all employees in the agencies sky rocketing.

In 2012, the CFPD had 945 full-time employees, the OCC employed 3,823, while the FDIC had a staggering workforce of 7,701. These institutions are intended to protect and serve consumers, but instead consumers are subjected to higher fees and rates due to employees receiving far too much compensation. So remember that next time a member of the Administration tires to blame the 'fat cats' in finance for the country's economic malaise – those 'fat cats' aren't on Wall Street, they're in Washington. 

TAGS: Spending, Regulation, Budget Reform

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