What would the CFPB look like if it were subject to annual congressional appropriations?

If the Supreme Court rules in the CFSA case that the CFPB’s funding is unconstitutional, Congress might fund the Bureau via annual appropriations. I wondered what that would mean. The FTC, another consumer protection agency, offers a clue. Now the agencies are not identical; the FTC has antitrust responsibilities and while the two agencies have some areas of jurisdictional overlap (e.g., enforcing the Fair Debt Collection Practices Act), for the most part they regulate different sectors of the economy and enforce different statutes. But maybe we can find some clues in the FTC’s financing. In fiscal year 2023, the FTC estimated its full-time equivalent utilization at 1,217; during the same fiscal year, the CFPB reported 1677 employees. Notice that that’s a comparison of full-time equivalents to total employees, so it’s not the same, but given that the FTC’s consumer protection responsibilities occupy only one of its two principal responsibilities, while all the Bureau does is protect consumers, I think it is fair to say that if Congress had to appropriate the Bureau’s funding annually, the CFPB would have many fewer employees. That is especially likely to be the case as members of Congress routinely decry the Bureau’s very existence, while the FTC seems not to draw such opprobrium.

Bureau compensation, at $257,521 for pay and benefits in FY2023, also far exceeds FTC pay and benefits ($158,586 for FY2023). I don’t know enough to know why that is; it may be that the Bureau needs different expertise than the FTC and so the compensation is not that comparable. But both agencies use a lot of the same types of employees: attorneys, economists, etc. Conventional economic theory suggests that if the Bureau pays more, it can attract people the FTC can’t, but I don’t know if that is so in reality. In any event, it is difficult to resist the conclusion that the Bureau’s greater resources enable it to provide more consumer protection than the Commission. No wonder the industry wants the Bureau to be subject to annual appropriations!

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