The Democrats were really proud when they passed the Dodd-Frank banking regulation bill that I call FrankenDodd. I guess this was another bill they needed to pass to find out what was in it, seeing that some of those Democrats are now expressing concern about the Office of Financial Research (OFR) the law created.
Congress has created another monster. The OFR does not receive its funding from Congress. It’s funded through taxes levied on financial institutions. According to Fox News, lawmakers found out at a recent hearing that there are no fiscal or regulatory limits placed on this office.
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.”
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.”
There’s much more at the link, and LD Jackson has added insight into this unconstitutional agency. Of course, this isn’t something you’re going to hear much about on your evening news, so be sure to share this information.