Office of Financial Research Nominee Gets Confirmation Hearing

Earlier this week, the U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing on four nominations, including that of Dr. Dino Falaschetti to be Director of the Treasury Department’s Office of Financial Research (OFR).

OFR is an independent bureau that was established by Dodd-Frank in 2010 to support the Financial Stability Oversight Council (also created by the Dodd-Frank legislation) by collecting data on behalf of the Council, performing applied research and essential long-term research, developing tools for risk measurement and monitoring, making the results of OFR activities available to financial regulatory agencies, and other services.

In an opinion column for American Banker, Gregg Gelzinis, a research associate for the economic policy team at the Center for American Progress, describes the OFR as “arguably the most important piece of the Dodd-Frank Wall Street Reform and Consumer Protection Act that is never discussed.”

The agency is important because “in the lead up to the 2007-2008 crisis, financial regulatory agencies did not have a good grasp of how risks that were building across and outside of their specific jurisdictions could threaten financial stability,” he writes. “Regulators were not sharing sufficient data with one another and there were significant pockets of the financial sector where data was not available to any regulator. The Dodd-Frank Act sought to address this issue, in part, by creating the Office of Financial Research.”

Falaschetti, President Trump’s nominee to lead the OFR, formerly served as chief economist of the House Financial Services Committee, where he was the architect of legislation that would destroy key pillars of the Dodd-Frank Act – including the section that established the OFR.