Reality Check: Shadowy Front Group Running Grossly Misleading Ads About CFPB Pay and Office Construction Costs

RHETORIC: CFPB Employees Make More Than Biden.

“A group called Protect America’s Consumers began running ads in Montana this week, urging residents to be concerned about practices at the Consumer Financial Protection Bureau (CFPB). Protect America’s Consumers spokesman Steve Gates explains: “[The CFPB was set up in 2011 to protect taxpayers when it comes to their finances. What has happened since its inception is that it is just overrun with overspending. There are a lot of things that taxpayers in Montana and around the country probably don’t know about the CFPB. You know, they have any number of employees that make more than [Vice President] Joe Biden.” Protect America’s Consumers is targeting Senators Jon Tester and Gates believes he could be the key to reform.” [Newstalk KGVO: “Group Asks Montana To Question Salaries At CFPB, Call Senator Tester,” 2/23/16]

REALITY: The CFPB Compensates Employees in Line with Federal Reserve Employees, As Required by Law

The CFPB Is Required by Law to Compensate Employees in Line with The Federal Reserve Board’s Average Salary for Employees with Similar Skills and Experience.

“The CFPB responded to the revelations by noting the Dodd-Frank bill, which created the agency itself in 2011, requires that compensation be comparable to Federal Reserve employees. “CFPB’s pay design and pay setting methodology places our employees in line with the Federal Reserve Board’s average salary for employees with similar skills and experience,” spokeswoman Michelle Person told The Daily Caller.” [Daily Caller, 7/18/13]

Consumer Protection Expert: “I Have No Quarrel Whatsoever with The CFPB’s Salary Structure…They Need to Pay the Salaries They Do in Order to Attract Top-Notch Talent.”

“Consumer protection expert Alan Kaplinsky told TheDC the high compensation of CFPB employees is nothing unusual. “I have no quarrel whatsoever with the CFPB’s salary structure,” said Kaplinsky, chair of the Consumer Financial Services Group. “They need to pay the salaries they do in order to attract top-notch talent.” [Daily Caller, 7/18/13]

REALITY: CFPB Employee Salaries In-Line with Other Federal Banking Regulators, Far Less Than The FDIC

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[Bloomberg View, “Are Bank Regulators Overpaid?,” 4/22/14]

RHETORIC: CFPB Office Building Cost More to Build Than the Bellagio.

“According to Gates, the office building for CFPB features a waterfall and cost more to build than the Bellagio Hotel.” [Newstalk KGVO: “Group Asks Montana To Question Salaries At CFPB, Call Senator Tester”, 2/23/16]

REALITY: Renovation Won’t Cost Taxpayers a Dime

The Renovation for The CFPB Will Cost Taxpayers “Precisely Zero” Since Its Paid for by The Federal Reserve Which “Is Self-Financed, Largely with Income On Securities Such as Government Bonds.”

“Republicans have cast the project as a misuse of public dollars in a time of tight budgets. “The CFPB is funded by the Federal Reserve, which happens to be taxpayer money,” Hensarling said in a February speech that denounced the renovation. But the Federal Reserve is self-financed, largely with income on securities such as government bonds, so the amount Congress needs to set aside for the office redo is precisely zero.” [Bloomberg, 7/10/14]

REALITY: Protect America’s Consumers Wildly Overestimates the Cost of the Renovation, Which Is in Line with Other Government Renovation Projects

Bloomberg: The GOP Estimated That The CFPB Headquarters Renovation Would Cost $216 Million but “Their Numbers Don’t Add Up.”

“The GOP members say their calculations show the renovation will cost $215.8 million, or $590 per square foot—more than double the CFPB estimate, and more than it cost per square foot to construct the lavish Bellagio Hotel and Casino in Las Vegas. These figures were picked up by newspapers and conservative websites, which ran them under headlines like “Elizabeth Warren’s Brainchild Builds HQ Costlier Than Trump Tower.” There’s just one hitch: Their numbers don’t add up.” [Bloomberg, 7/10/14]

  • The Inspector General of the Federal Reserve Estimated the Cost of the Renovations at $145.1 Million. “At McHenry’s request, the inspector general of the Federal Reserve, the CFPB’s parent agency, prepared a report in June examining the project’s price tag. It said the job would cost an estimated $145.1 million for construction, construction management, and GSA fees. The report said the renovation covers 512,000 sq. ft., bringing the estimate to $283 per square foot. The renovation has since been scaled back to 503,000 sq. ft.” [Bloomberg, 7/10/14]

The GSA Has Said the Costs Are in Line with Other Government Renovation Projects and The CFPB Followed Proper Contracting Procedures.

“The GSA has said the costs are in line with other government renovation projects, and the inspector general concluded the CFPB followed proper contracting procedures.” [Bloomberg, 7/10/14]

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