WASHINGTON -- House Banking Committee Chairman Henry B. Gonzalez opened an investigation Tuesday into the pay practices of the regulatory agencies overseeing banks and thrifts.
The Texas Democrat initiated the probe after discovering that the National Credit Union Administration paid almost $500,000 in bonuses last year to its 39 senior staff members. The highest was $26,000 and the average $12,300.
Rep. Gonzalez said he plans to begin reviewing banking and thrift agency budgets regularly even though the Federal Deposit Insurance Corp., the Federal Reserve Board, the Comptroller of the Currency, and the Office of Thrift Supervision do not receive appropriations.
An industry newsletter, Credit Union Information Service, disclosed NCUA's liberal bonus program on April 13. That's when Rep. Gonzalez asked NCUA Chairman Roger Jepsen for an explanation.
Mr. Jepsen responded May 15, telling Rep. Gonzalez that NCUA had to increase compensation to make up the pay differential with other agencies. He said better pay slowed annual employee turnover to less than 6%, from 15.6% in 1985. Even with the bonuses, NCUA employees do not make as much as counterparts at other agencies, he said.
Mr. Jepsen said the agency canceled its bonus program for 1992. He said the goals set to gain a bonus were too weak, allowing every senior staffer to collect the maximum bonus possible.
Bonus Policy at Other Agencies
After the big bonuses at NCUA were uncvered in April, American Banker asked the banking agencies to reveal the bonuses they paid. The request was made under the Freedom of Information Act.
Only the Comptroller's office responded within the 10 days the law mandates. The national bank regulator spent $70,075 on bonuses for 44 people last year. The average bonus was $1,600, and the largest bonus paid in 1991 to an employee of the Comptroller's office was $3,000.
The Fed and the FDIC acknowledged receipt of the Freedom of Information Act request but have yet to provide any information on their pay practices.