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 proposes the OFR annual budget. The Director may set salaries of the Office’s employees “without regard to or 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 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:
Collecting data on behalf of the Council, and providing such data to the Council and member agencies;
Standardizing the types and formats of data reported and collected;
Performing applied research and essential long-term research;
Developing tools for risk measurement and monitoring;
Performing other related services;
Making the results of the activities of the Office available to financial regulatory agencies; and
Assisting Council member agencies in determining the types and formats of data authorized by the Act to be collected by the member agencies.
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, and it is mandated that the office have:
Training and Workforce Development Plan that includes training, leadership development and succession planning
Workplace Flexibility Plan that includes telework, flexible work schedules, job sharing, parental leave benefits and childcare assistance, domestic partner benefits
Recruitment and Retention Plan
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:
Training And Workforce Development Plan – that includes:
* Identification of skill and technical expertise needs and action taken to meet the requirements
* Steps taken to foster innovation and creativity
* Leadership development and succession Planning
* Effective use of technology by employees
Workplace Flexibility Plan – that includes:
* Telework
* Flexible work schedules
* Phased retirement
* Reemployment annuitants
* Parental leave benefits and childcare assistance
* The steps necessary to target highly qualified applicant pools with diverse backgrounds
* Streamlined employment application process
* Timely notification of employment applications
* Measures of hiring effectiveness
Sections
Data and Research & Analysis Centers
The Office is supported by two entities:
The Data Center, which collects, validates and maintains the data required to support the Council; which may be obtained from commercial data providers, publicly available data sources and the financial entities supervised by state and federal agencies; and
The Research and Analysis Center, which conducts independent analysis of available information to identify financially destabilizing effects, and develops and maintains independent analytical capabilities and computing resources to:
* Develop and maintain metrics and reporting systems for risks to the financial stability of the United States
* Monitor, investigate, and report on changes in systemwide risk levels and patterns to the Council and Congress
* Conduct, coordinate, and sponsor research to support and improve regulation of financial entities and markets
* Evaluate and report on stress tests or other stability-related evaluations of financial entities overseen by the member agencies
* Maintain expertise in such areas as may be necessary to support specific requests for advice and assistance from financial regulators
* Investigate disruptions and failures in the financial markets, report findings, and make recommendations to the Council based on those findings;
* Conduct studies and provide advice on the impact of policies related to systemic risk; and
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."
