June 18, 2025

ICYMI: Yellen, Bernanke, Over 50 Bipartisan Experts Urge Congress to Prevent the Elimination of Key Financial Stability Watchdog

“Eliminating the OFR and crippling the FSOC would not reduce the federal budget deficit but would undermine America’s capacity to maintain a stable financial system”

Text of Letter (PDF)

Washington, D.C. –  In case you missed it, former Treasury Secretary Janet Yellen, former Federal Reserve Chair Ben Bernanke, former FDIC Chair Sheila Bair, former Office of Financial Research (OFR) leaders, and more than 50 academics and experts across the political spectrum sent congressional leaders a letter highlighting concerns with the potential elimination of the OFR and harms to the Financial Stability Oversight Council (FSOC) – offices that help prevent future financial crises – in President Trump’s “Big, Beautiful Bill.”

“After the 2008 financial crisis, Congress created the OFR to collect comprehensive data across the U.S. financial system, including banks, broker-dealers, and nonbank firms, when the other financial regulatory agencies lacked the authority to do such a collection … (Congress) also recognized the benefit of having an entity without other regulatory or supervisory authority conduct such data collections. And Congress sought to make sure that any such collections would not duplicate existing data, would be done efficiently, and would not impose undue burdens on financial firms,” the letter reads.

The writers also outlined the dangers to the Financial Stability Oversight Council (FSOC): “The proposed legislation does more than end the OFR. It would also cripple FSOC, because FSOC relies heavily on the OFR for data and analysis and because the provision permanently caps FSOC’s budget at what will inevitably be much lower spending levels.”

The letter concluded: “History shows that financial crises have high socio-economic costs and that the economic recovery from such crises tends to be protracted. Defunding or significantly downsizing the OFR and its financial data and analytics would be a mistake, particularly so given today’s elevated macro-financial uncertainties.” 

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