Office of Financial Research

The Office of Financial Research (OFR) is an independent bureau within the United States Department of the Treasury that was established by the Dodd–Frank Wall Street Reform and Consumer Protection Act, whose passage in 2010 was a legislative response to the financial crisis of 2007–08 and the subsequent Great Recession. Established as a department reporting to the Treasury, the Office is tasked with (1) collecting and standardizing data, (2) performing applied research and essential long-term research; and (3) developing risk measurement and monitoring tools. The OFR is also responsible for providing support work to the Financial Stability Oversight Council (FSOC).
Director.
The Director of the Office of Financial Research is appointed for a 6-year term. Under President Trump, the agency has become less independent and the Director of the OFR is now directly subordinate to the Secretary of the US Treasury. The Director, in consultation with the Chairman of the Council (who is the Secretary of the Treasury) proposes the OFR annual budget. The Director may set salaries of the Office’s employees “without regard to chapter 51 or subchapter III of chapter 53 of Title 5 of the United States Code, relating to classification of positions and General Schedule pay rates”.
Authority.
The Director has Subpoena power and may require from any financial institution (bank or non-bank) any data needed to carry out the functions of the office. However, this power has not been used or tested.
Responsibilities.
Section of the Dodd-Frank Act charged the Office of Financial Research with supporting the Financial Stability Oversight Council and member agencies by:
Resources.
Like the Council, the Office of Financial Research may request, from department or agency of the United States, "such services, funds, facilities, staff, and other support services as the Office may determine advisable. Any Federal Government employee may be detailed to the Office without reimbursement, and such detail shall be without interruption or loss of civil service status or privilege." Within the Treasury Department, there is a revolving fund, the "Financial Research Fund" into which all appropriations, fees, and assessments that the Office receives are deposited. Surplus funds may be invested. It is contemplated that within 2 years of establishment that the Office will be self-funding.
Financial Research Fund.
The Financial Research Fund is a quasi-revolving fund that the Office uses to fund its operations. All appropriations and assessments are deposited into the Fund; surpluses may be invested. Funds are not subject to apportionment for any other purposes. Within 2 years of enactment, the Office should become self-funding. During the 2-year time following date of enactment, the Federal Reserve shall fund the Office.
In fiscal 2016, the bureau had 225 employees and a budget of $99 million. In 2018 the OFR went through substantial Reduction In Force and employees leaving. Trump claimed he was saving tax payers money even though the funding is not from tax payers. At year end, 2018, the OFR had slightly over 100 employees.
Workforce development.
The Office has broad latitude in performing support services for both the Council and other Member Agencies, including data collection, applied research and essential long-term research, and developing tools for monitoring risk. The Office can also issue guidelines to standardizing the way data is reported, constituent agencies have three years to implement data standardization guidelines. In many ways, the Office of Financial Research is to be operated without the constraints of the Civil Service system. For example, it does not need to follow federal pay scale guidelines (see above), and it is mandated that the office have:
Temporary management reporting.
For a period of five years after enactment, the Office shall submit an annual report to the Senate Committee on Banking, Housing and Urban Affairs, and the House Committee on Financial Services, what amounts to a management report, including:
Sections.
Data and Research & Analysis Centers.
The Office is supported by two entities:
Reporting.
The Director reports to and testifies before only the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services of the House of Representatives. Testimony shall be annual on the activities of the Office, including the work of the Data Center and the Research and Analysis Center and the assessment of significant financial and market developments and potential emerging threats to the financial stability of the Country. These reports to Congress are independent of any political influence in that "No officer or agency of the United States shall have any authority to require the Director to submit the testimony ... for approval, comment, or review prior to the submission of such testimony."