Federal Agency Hands Out Participation Trophies | Citizens Against Government Waste

Federal Agency Hands Out Participation Trophies

The WasteWatcher

According to the website for the Consumer Financial Protection Bureau (CFPB), the mission of the agency “is to make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.”  The agency came into existence following the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Until recently the agency rated its employees on a scale of one to five, with higher rated employees earning more money.  However, a May 28, 2014 article has indicated that the previous relationship between ratings and pay has little relevance.

The CFPB has made the decision to retroactively give employees a Five Star performance rating regardless of whether or not employees earned such a rating, according to a May 25, 2014 article published by The Daily Caller.  The Bureau is currently evaluating the viability of a new rating system.  The reason behind this ratings adjustment is an allegedly flawed employee evaluation system.

A June 2, 2014 article appearing in The Weekly Standard noted that the original employee evaluation found that the average for nonunion employees was higher than union employees.  In addition, women outperformed men, and younger employees were rated higher than older employees.  The response by Director Cordray was to grant “any employee who received a 3 or 4 in the last two years the same salary and benefit increases as an employee who received a 5 on the evaluation.”

Unfortunately, lowering the standards in this manner will have real fiscal consequences.  A May 19, 2014 article by American Banker projected that the costs of this decision will be north of $5 million.  The cost increase will occur because employees with higher ratings earn higher salaries.

According to Cordray, “there were broad-based disparities in the way performance ratings were assigned across our employee base in both 2012 and 2013,” and these disparities are representative of “a systemic disadvantage to various categories of employees that persisted across divisions, offices, and other employee characteristics.”

For the sake of argument let’s set aside the possibility that Director Cordray is confusing correlation with causation and assume the ratings were biased and therefore illegitimate.  The way to deal with a broken scoreboard is to fix the scoreboard, not start handing out touchdowns that were never scored.

The response to this situation by CFPB encapsulates the attitude by many government officials when presented with an issue.  When in doubt, throw money at the problem and hope things will sort themselves out.  Not only is the remedy used by CFPB inappropriate, but it also sets a dangerous precedent for how allegedly flawed employee evaluations will be dealt with going forward.

This is not the first time the CFPB has made the news for overpaying employees.  A July 18, 2013 article by The Daily Caller found that at the time “more than 60 percent of the CFPB’s 1,204 employees made six figures.  Fifty six CFPB employees made more than $199,700, the salary of [then] Federal Reserve Chairman Ben Bernanke….”

One can only hope that CFPB will be more successful in protecting American consumers than they appear to be at protecting the American taxpayer.