New federal agency OFR stirs ‘Orwellian’ fears
April 20, 2012
It is the most powerful federal agency you’ve never heard of — and lawmakers from both parties on Thursday vowed to keep abreast of its astonishing growth and rein it in, if necessary.
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.
Starting in July, the OFR Fiscal Year 2013 budget, estimated at $158 million, will be funded entirely through assessments — also known as taxes — on bank-holding firms with consolidated assets worth at least $50 billion.
But as became clear at Thursday’s hearing by the House Financial Services Subcommittee on Oversight and Investigations, a close reading of the law the president signed provides no limit on the growth of OFR’s budget, nor on the taxes the agency can impose on big banks to fund it.
“We’ll call you on it,” said Rep. Michael Capuano, D-Mass., warning what would happen if he and his colleagues see the agency growing too large.
Yet the Congress’ prospects for doing that are at present limited, as it holds no power of the purse over OFR. Detractors call it “the CIA of financial regulators,” and conjure “Orwellian” visions of “an omniscient Soviet-style central risk manager.”