House lawmakers look to tweak financial research agency

A pair of House lawmakers wants to subject the government’s new financial research arm to stricter requirements and restrictions.

Reps. Ed Royce (R-Calif.) and Patrick Murphy (D-Fla.) unveiled legislation Thursday that would require the Office of Financial Research (OFR) to submit an annual work plan, coordinate with other regulators, and beef up its cybersecurity.

The push comes as the new agency, created by the Dodd-Frank financial reform law, has come under fire for its early research work and been accused of failing to take into account input from regulators with relevant expertise.

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“This bill ensures that the OFR works in concert with regulatory bodies while preparing reports and discloses its planned activities ahead of time so the public knows exactly what to expect,” Royce said in a statement. “Cybersecurity breaches are a major threat to our economy, and an Office that holds as much sensitive material as the OFR should be protected against bad actors attempting to steal information. This bill addresses the need for robust cyber defenses at the OFR.”

The OFR, housed within the Treasury Department, is charged with collecting data about the financial system and producing reports for Congress and regulators regarding potential threats or risks in that system.

But early going for the new unit has been rocky, with one of its first research projects coming under scrutiny from lawmakers.

A study by the OFR on risks posed by asset management firms received bipartisan criticism from lawmakers who said it was misguided and should not be relied on by regulators.

Some lawmakers accused the agency of refusing to appropriately consider input from the Securities and Exchange Commission, which primarily handles such firms. The new bill would mandate that the OFR consult any relevant agencies while conducting research.