On Fox News' Fox & Friends, Fox Business host Stuart Varney, Fox's self-avowed conservative, Republican financial analyst attacked the Office of Financial Research (OFR), an organization planned by the financial regulatory reform bill but not yet created. During the segment, Varney falsely claimed that the OFR "answers to the Federal Reserve," and suggesting that the office may be unconstitutional because it usurps Congress' taxation authority by "plac[ing] a tax on banks." From Fox & Friends:
BRIAN KILMEADE (co-host): Tell me about this powerful agency that no one's ever heard of.
VARNEY: Oh, you are talking about the Office of Financial Research.
STEVE DOOCY (co-host): Never heard of it.
VARNEY: OK. It's going to be set up in July. It's all part of this financial reform. It can go into any big bank and demand any information of any kind at any time. Worst yet, it's funded by the -- by the big banks themselves. And this new agency does not answer to Congress, it answers to the Federal Reserve. And the Federal Reserve places a tax on banks to fund this agency. In other words, is it constitutional? Surely Congress is the only authority that can tax people in America and now suddenly you've got the Federal Reserve taxing the banks.
But even after the creation of the OFR, Congress will be "the only authority that can tax people in America." The legislation creating the agency makes it clear that it will generate operational revenue not through taxation, but through assessments on large financial institutions, a funding method the Treasury Department has been using for years. Through powers legislated by Congress, the Federal Reserve (Fed), Office of the Comptroller of the Currency (OCC), Farm Credit Administration (FCA), Office of Federal Housing Enterprise Oversight (OFHEO), Office of Thrift Supervision (OTS), Federal Deposit Insurance Corporation (FDIC), and National Credit Union Administration (NCUA) all use forms of assessments for funding.
The Wall Street Reform and Consumer Protection Act (Dodd-Frank) outlines the funding mechanisms for OFR, explaining that in the first two years, the agency will receive funding from the Federal government. After that banks with assets totally $50,000,000,000 and greater will be charged an assessment by the OFR. This money will endow the "Financial Research Fund" which in turn funds the OFR.
Varney's falsehoods on the OFR weren't restricted to the assessments. The financial regulatory reform bill clearly states that the OFR is housed in the U.S. Department of the Treasury and not in the Federal Reserve.