Wall Street still pays for the watchdog it just gutted

Congress built the Office of Financial Research inside the 2010 Dodd-Frank Act for one job: see the next 2008 coming before it arrives.▸ It answers to the Financial Stability Oversight Council, and — unusually for a federal office — it doesn't cost taxpayers a cent. Under Section 155(d) of Dodd-Frank, its entire budget is billed directly to the largest bank holding companies and to nonbank financial firms the Federal Reserve supervises. In 2026, Treasury cut the office's staff by nearly two-thirds anyway — and the bank money kept arriving regardless.

None of OFR's money is appropriated tax revenue.▸ It is billed twice a year to bank holding companies with more than $250 billion in assets and to nonbank financial companies the Fed designates for supervision, at a rate Treasury publishes ahead of each assessment period. For fiscal 2026, per the OFR's FY2026 Congressional Budget Justification, those assessments bring in $72.3 million, on top of $44.9 million rolled over from prior years, $2.7 million in interest, and $6.0 million in recoveries and restored sequestration funds — $125.9 million available to the office in total.

Only $85.5 million of that $125.9 million actually gets spent — split across the Data Center, the Technology Center, the Research and Analysis Center, and leadership and operations.▸ The remaining $40.4 million is unobligated, carried forward into fiscal 2027, per the same budget document. The office isn't short on money. Banks keep paying the same assessment regardless of headcount, and the office is now collecting more than it spends even after the cuts.

The dollars didn't shrink; the staff did.▸ OFR's own budget filing shows the office grew to 196 full-time employees in the FY2025 revised estimate, then was cut to a 72-FTE estimate for FY2026 — a 63% reduction in a single budget cycle.

The real-time version of that cut arrived in a March 2, 2026 notice to staff, reported by Government Executive, telling employees OFR was "transitioning to a new organization structure."▸ The office started the year with roughly 196 people, was down to about 100 within weeks of the notice, and is targeting 70 by September 2026, when employees who accepted deferred resignation — paid leave until they leave the payroll for good — finally exit. Treasury told staff the cuts were necessary because of the office's shrinking fiscal 2026 budget. But the budget only shrank by 23%; the staff shrank by 63%. The gap between those two numbers is the story: an office that watches the financial system for warning signs before they become crises now runs on less than a third of its analysts, examiners, and technologists — funded by a bank fee no smaller than before.

Budget and staffing figures are Treasury's own FY2026 estimates, filed before the fiscal year closes; actual FY2026 obligations and headcount may differ modestly from the estimate once the year is final.