Who pays for these generous salaries? Bank shareholders pay directly through insurance premiums on deposits and examination fees levied by the bank regulatory agencies. These costs are passed on in higher customer fees and loan rates. The high compensation of CFPB employees is funded by taxpayers through the Federal Reserve. 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%. Targeted compensation exceptions to the government's general salary schedule offer a potential solution. These exceptions have been used successfully by NASA, the National Institutes of Health and other agencies to recruit and retain specialized staff without inflating the salaries of all employees. It is up to Congress to re-establish control of bank regulators' compensation. There is no reason these agencies should be allowed to impose unnecessarily large fees on banks and their customers to fund largess for their employees.

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