The Office of Financial Research, or OFR, was created by the Dodd-Frank financial services overhaul that President Obama signed into law in July 2010. Technically housed under the Treasury Department, the agency has until now received its funding not from the Congress, but directly from the Federal Reserve.An agency with no oversight and unlimited funding? What could go wrong?
Detractors call it "the CIA of financial regulators,” and conjure "Orwellian" visions of "an omniscient Soviet-style central risk manager."
The agency’s official mission is to collect financial data and funnel it to another Dodd-Frank creation: the Financial Stability Oversight Council. These agencies were designed with the idea of preventing another systemic shock of Lehman Brothers magnitude.
Toward that end, OFR was invested with virtually unlimited subpoena power. It can compel just about any company in America to turn over to the federal government sensitive internal data, even proprietary information.
“We're only going to be collecting the data that we absolutely need, to fulfill our mission,” testified Michele Shannon, the new agency’s chief operating officer. “We're trying to fill data gaps. We're not going to be collecting for collection's sake. We're going to be making sure that only those people who absolutely need to have access to sensitive data have that access.”
But Republicans on the panel remained skeptical about the potential for abuses of power.
“You're able to tax corporations without any oversight by the U.S. Congress,” said Rep. Steve Pearce, R-New Mex. “Our Constitution is pretty clear, and so if we're a little scratchy on our side, just understand it's because you're conducting things that we feel like are completely unconstitutional.”
Thursday, April 19, 2012
You may not have heard of them, but chances are they know you: