ATR led a coalition letter supporting Senators Ted Cruz (R-Texas), Thom Tillis (R-N.C.), and Tom Cotton (R-A.R.) and Congressmen Ted Budd (R-N.C.) Alex Mooney (R-W.V.) and Warren Davidson’s (R-Ohio) legislation that would eliminate the Office of Financial Research, S. 1478 and HR 2743.
Established under Dodd-Frank, the OFR was created with the purpose of using data provided by financial institutions to examine risks to the financial markets. This data for the most part is volunteered by private financial institutions, like bank holding companies, but the alternative is OFR using its subpoena power to demand these institutions hand over the data. That alone is a cause for concern for why a “research” agency should have subpoena issuing capabilities.
OFR is also funded through fees collected from these same financial institutions providing the agency with their data. By intention, this set up avoids direct congressional oversight and allows OFR to determine almost unanimously on their own what their budget should be and go to their financial backers with their hands out as their regulator. For example, under the Obama administration’s appointed Director, OFR’s budget was $101.4 million, as opposed to $75.3 million for fiscal year 2019.
The agency is duplicative in nature as there are roughly 20 other federal agencies that conduct the same research as OFR, most notably the Department of the Treasury, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and the Federal Reserve. The creation of OFR is another example of expanding the government to find a solution to a problem that does not exist.
The organizations who joined this coalition letter are proud to support Senator Cruz and Representatives Budd, Mooney and Davidson and their efforts to stop government intervention and protect taxpayers from future overreach.
Americans for Tax Reform led the coalition letter supporting their legislation, which can be found here and below.
May 15, 2019
Dear Senators Cruz, Tillis and Cotton and Representatives Budd, Mooney and Davidson:
On behalf of the undersigned organizations, we write to express our support for your legislation to eliminate the Office of Financial Research, a duplicative and opaque agency created from Dodd-Frank and without congressional oversight.
In 2018, Congress passed bipartisan landmark legislation addressing numerous regulatory shortcomings and agency overreach stemming from Dodd-Frank. To complement this reform effort, Congress should consider terminating the OFR. As directed under Section 153 of Dodd-Frank, its mission is to support the Financial Stability Oversight Council and its member agencies by collecting and analyzing data and risk toward financial markets. However, this objective already exists within roughly 20 other agencies, departments, bureaus and committees, most notably within the Department of the Treasury, the Federal Deposit Insurance Corporation and the Federal Reserve.
OFR’s capabilities also raise serious questions regarding data and privacy security for financial institutions forced to turn over similar information to federal agencies, often already available with the institution’s primary regulator. In order for the agency to have access to this data, Congress granted OFR sweeping authority to collect information from the companies that fund it, including regulatory agencies, using subpoena power. Concerningly, this allows OFR to gather information for any reason and with no accountability.
OFR is funded outside the appropriations process, receiving its funding through fees collected from predominantly bank holding companies and some non-financial companies with little oversight of how the fees are spent. For fiscal year 2019, OFR’s budget was $75.3 million, compared to its budget under the previous administration of $101.4 million for fiscal year 2017.
For these reasons, we, the undersigned organizations, strongly support your legislation which would eliminate the redundancies created through the establishment of OFR and its underlying provisions produced from Dodd-Frank.
President, Americans for Tax Reform
Brent Wm. Gardner
Chief Government Affairs Officer, Americans for Prosperity
President, Consumer Action for a Strong Economy
Andrew F. Quinlan
President, Center for Freedom and Prosperity
President, American Commitment
President, National Taxpayers Union
President, Council for Citizens Against Government Waste
Executive Vice President, Freedom Partners Chamber of Commerce
President, The American Consumer Institute
Vice President, Competitive Enterprise Institute