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Dodd-Frank Act and the Office of Financial Research

Read up on this act and found some pretty interesting things. Overall it sounds good, keeping tabs on stuff to prevent another "crisis", but the power and sometimes more importantly the exemptions the agency that was created by this act has is amazing. It has a virtually unlimited budget, they answer more to The Federal Reserve than to the govt. with exemption from procedures other agencies have to follow. They can force a company that has been deemed to fit the liquidation criteria to liquidate even if the board members of said company refuse. The data collection and analysis parts are very concerning also. The wiki article on it is very long but worth looking through, here is a bit of what I thought was intriguing. The Office of Financial Research has power like no other agency.

The Financial Stability Oversight Council has ten voting members:[44]

[list=1][*]Secretary of the Treasury (chairs the Council)[/*][*]Chairman of the Federal Reserve[/*][*]Comptroller of the Currency[/*][*]Director of the Bureau of Consumer Financial Protection[/*][*]Chairperson of the U.S. Securities and Exchange Commission[/*][*]Chairperson of the Federal Deposit Insurance Corporation[/*][*]Chairperson of the Commodity Futures Trading Commission[/*][*]Director of the Federal Housing Finance Agency[/*][*]the Chairman of the National Credit Union Administration Board[/*][*]an independent member (with insurance expertise), appointed by the President, with the advice and consent of the Senate, for a term of 6 years.[/*][/list]
There are five non-voting advisory members who may go into the equivalent of executive session when discussing confidential supervisory information:

[list=1][*]Director of the Office of Financial Research (part of the Treasury Department and established in this Act) who is the Council's executive director[/*][*]Director of the Federal Insurance Office (part of the Treasury Department and established in this Act)[/*]

  • a state insurance commissioner, to be designated by a selection
    process determined by the state insurance commissioners (2-year term)
  • a state banking supervisor, to be designated by a selection process determined by the state banking supervisors (2-year term)
  • a state securities commissioner (or officer performing like
    function) to be designated by a selection process determined by such
    state security commissioners (2-year term)
  • [/list]
    [edit] Resources
    The Federal Advisory Committee Act,
    which limits the powers of advisory committees, does not apply to the
    council. The council has an almost unlimited budget in that the Council
    may draw on virtually any resource of any department or agency of the
    Federal government. Any employee of the Federal government may be
    detailed to the Council without reimbursement and without interruption
    or loss of civil service status or privilege. Any member of the Council
    who is an employee of the Federal Government serves without additional
    compensation. In addition, "An employee of the Federal Government
    detailed to the Council shall report to and be subject to oversight by
    the Council during the assignment to the Council, and shall be
    compensated by the department or agency from which the employee was
    detailed."[45] Additionally, "Any expenses of the Council shall be treated as expenses of, and paid by, the Office of Financial Research".[46]
    [edit] Authority
    The Council has very broad powers to monitor, investigate and assess
    any risks to the US financial system. The Council has the authority to
    collect information from any State or Federal financial regulatory
    agency, and may direct the Office of Financial Research, which supports the work of the Council, "to collect information from bank holding companies and nonbank financial companies".[47]
    The Council monitors domestic and international regulatory proposals,
    including insurance and accounting issues, and advises Congress and the
    Federal Reserve on ways to enhance the integrity, efficiency,
    competitiveness and stability of the US financial markets. On a regular
    basis, the Council is required to make a report to Congress describing
    the state of the US Financial System. Each voting member of the Council
    is required to either affirm that the Federal Government is taking all
    reasonable steps to assure financial stability and mitigate systemic
    risk, or describe additional steps that need to be taken.[48]
    Under specific circumstances, the Chairman of the Council (who is also
    the Secretary of the Treasury), with the concurrence of 2/3 voting
    members, may place nonbank financial companies or domestic subsidiaries
    of international banks under the supervision of the Federal Reserve if
    it appears that these companies could pose a threat to the financial
    stability of the US.[49]
    The Federal Reserve may promulgate safe harbor regulations to exempt
    certain types of foreign banks from regulation, with approval of the
    Under certain circumstances, the Council may provide for more stringent
    regulation of a financial activity by issuing recommendations to the
    primary financial regulatory agency, which the primary financial agency
    is obliged to implement – the Council reports to Congress on the
    implementation or failure to implement such recommendations.[51]
    [edit] Financial Reporting to the Council
    The Council may require any bank or non-bank financial institution
    with assets over $50 billion to submit certified reports as to the
    • financial condition
    • systems in place to monitor and control any risks
    • transactions with subsidiaries that are regulated banks
    • the extent to which any of the company's activities could have a
      potential disruptive impact on financial markets or the overall
      financial stability of the country

    The Comptroller General of the United States
    may audit the Council or anyone working for the Council, and may have
    access to any information under the control of or used by the Council.[53]
    [edit] Office of Financial Research
    Established as a department within the Treasury,
    the Office is tasked with providing administrative, technical, budget
    analysis and other support services to the Council and its affiliated
    The Director of the Office of Financial Research is appointed for a
    6-year term. To the extent that his or her duties are exclusively
    focused on the Council and the Office of Financial Research, the
    Director is in effect the executive director of the Council. The
    Director, in consultation with the Chairman of the Council (who is the
    Secretary of the Treasury) proposes the annual budget of the Office.[55] The Director may set salaries of the Office’s employees “without regard to chapter 51 or subchapter III of chapter 53 of Title 5 of the United States Code, relating to classification of positions and General Schedule pay rates.”[56]
    The Director has Subpoena power and may require from any financial institution (bank or non-bank) any data needed to carry out the functions of the office.[57]

    [edit] Financial Research Director's Independent Reports to Congress
    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."[58]
    [edit] 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."[59]
    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.[60]
    [edit] Authority
    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.[61] In many ways, the Office of Financial Research is to be operated without the constraints of the Civil Service system. For example, does not need to follow Federal pay scale guidelines (see above), and it is mandated that the office have:[62]
    • 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

    [edit] Data and Research & Analysis Centers
    The Office is supported by two entities:

      [*]The Data Center,[63]
      which collects, validates and maintains (and publishes some of) 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:[64]
    • 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
    • Conduct studies and provide advice on the impact of policies related to systemic risk; and
    • Promote best practices for financial risk management.

    [edit] 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.[60]
    [edit] 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:[65]
      [*]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
    • Part-time work
    • Job sharing
    • Parental leave benefits and childcare assistance
    • Domestic partner benefits
    • Other workplace flexibilities

    [/*][*]Recruitment and Retention Plan – that includes:
    • 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

    [edit] Title II – Orderly Liquidation Authority

    The New York City headquarters of Lehman Brothers at the time of its collapse in 2008.

    In addition to the supervised banks, insured depository institutions
    and securities companies that may be liquidated under existing law by
    the FDIC or Securities Investor Protection Corporation
    (SIPC), Covered Financial Companies that may be liquidated under this
    title include insurance companies and non-bank financial companies not
    covered elsewhere.[66]
    Once it is determined that a financial company satisfied the criteria
    for liquidation, if the financial company's board of directors does not
    agree, provisions are made for judicial appeal.[67]
    Some procedures for FDIC and the SIPC to liquidate companies are
    revised. In addition to the policies and procedures that are in place
    for the financial institutions covered by FDIC and SIPC, this title
    provides for the orderly liquidation of other financial institutions.
    Depending on the type of financial institution, different regulatory
    organizations may jointly or independently, by 2/3 vote, determine
    whether a receiver should be appointed for a financial company:[68]

    Provided that the Secretary of Treasury, in consultation with the
    President may also made a determination to appoint a receiver for a
    financial company.[69] And the GAO shall review and report to Congress about the Secretary's decision.[70]
    When a financial institution is placed into receivership under these
    provisions, within 24 hours the Secretary shall report to Congress, and
    within 60 days there shall be a report to the general public.[71]
    The report on the recommendation to place a financial company into
    receivership shall contain various details on the state of the company,
    the impact of its default on the company, and the proposed action.[72]

    Added: Apr-21-2012 Occurred On: Apr-21-2012
    By: Singlecoilsnap
    World News, Regional News, Other News, Politics
    Tags: NDAA, patriot act, dodd, frank, act, legistlation, federal reserve, homeland security, gestapo, tsa, ben, bernanke, no, money, debt, credit,
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