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A little noticed section (Section 152, page 63) of the Obama administration's Financial Reform bill would create a new 1,000-employee office within the Department of the Treasury, the Office of Financial Research, which is raising alarm bells among Senate GOP staff, who say the entity would have broad powers to invade the privacy of American citizens and monitor their finances and financial activity at a level never before allowed by the federal government. The OFR is a companion entity to the Consumer Financial Protection Bureau (CFPB), which is also proposed in the legislation (section 1001, page 1030). Under the bill's current language, according the Senate Banking Committee sources, the OFR under the new federal law would be allowed to collect any financial data it chooses, whether from individual citizens or businesses. Under the language of the bill, the data center can collect and maintain "all data necessary" to monitor the financial system. Wall Street executives are also concerned, because of the kind of "competitive intelligence" such an entity could collect. Under the bill, all Americans would be required to provide the CFPB with written answers, under oath, to any question posed by the agency regarding their personal financial information, and the Office of Financial Research would have subpoena power and funding to mine and monitor those financial transactions it chose to examine. Perhaps more chilling, the data collected by these new entities would not be protected or necessarily confidential.Perhaps most outrageous to taxpayers: many of the employees of this agency would be exempt from General Schedule (GS) pay scales, thus ensuring that their salaries could far exceed those of traditional government bureaucrats.
The director of the OFR is not accountable to the Congress, the President, or the Treasury Secretary. The director of the OFR has sole discretion on all OFR matters. The director of the OFR could contradict the President and the Treasury Secretary publically on all matters related to financial stability (e.g. dollar policy, fiscal policy, and monetary policy). The OFR will have full "tax and spend" powers on the financial industry and it will have access to Federal Reserve proceeds that are otherwise used to reduce the national debt. The director of the OFR will set the budget of the OFR without obtaining approval from any other government official. Industry and academic OFR advocates say the office will require $400 to $500 million annually for operational costs. In addition the advocates think it will cost $500 million to purchase the computers and servers required store the OFR's information and data. The Director will set the salary for the 1000 or more OFR employees. OFR employees are exempted from the General Schedule for federal employees so many OFR employees will earn in excess of $200,000. The OFR will provide domestic partner benefits, flexible work schedules, and telework options.
The OFR will have full "tax and spend" powers on the financial industry and it will have access to Federal Reserve proceeds that are otherwise used to reduce the national debt.
