U.S. Sens. Elizabeth Warren (D-MA) and Jack Reed (D-RI) recently forwarded correspondence to the Director of the Office of Financial Research (OFR), noting they are encouraging the office to use tools aiding financial system protections.
Warren and Reed, both members of the Banking, Housing, and Urban Affairs Committee, sent the letter to OFR Director Dino Falaschetti, citing the OFR was established to identify and analyze financial system risk sources while being empowered to collect financial stability risk data.
The legislators maintain the OFR is not taking the steps needed to fill the data gaps.
“Under Falaschetti’s leadership, OFR has overwhelmingly failed to collect data to provide regulators with the critical information they need to assess the risks to our economy,” Warren noted via a statement. “At the same time, OFR has failed to aggressively recruit and expand staff to carry out its functions.”
Reed said the COVID-19 pandemic has revealed new risks and vulnerabilities in the financial system and has reinforced the need for the OFR’s mission and monitoring capabilities.
“OFR must step up and use its power to safeguard consumers, businesses, and the economy,” he said. “OFR was designed to enhance financial stability by analyzing market trends, spotting potential gaps in regulators’ view of risks, and serving as an early detection and warning system. But I am concerned that OFR is not using all of the tools that Congress provided the agency to collect and examine data on key risks and vulnerabilities in the financial system.”
Warren and Reed have requested OFR provide plans to collect data needed to address the ongoing sources of risk no later than Jan. 28, 2022.