The agency, which is funded by fees from large financial institutions, is responsible for monitoring and collecting data to identify risks across the financial system, including from less regulated corners of the market. Its duties inform the work of the Financial Stability Oversight Council, an interagency panel of regulators created by the Dodd-Frank Act after the 2008 financial crisis and chaired by the Treasury secretary.
According to the documents, Treasury offered buyouts and early retirement to willing employees before the reduction in force goes into effect. The budget proposal suggested Treasury planned to reduce headcount by 124 full-time employees. In 2025, the office was listed as having 196 full-time employees. A prospective organizational chart also obtained by POLITICO shows roughly 70 remaining positions.
Republicans have long decried the research office as having overly expansive powers to gather all sorts of data on companies and individuals, but also as a waste of money, producing what they often see as duplicative research.
Senate Banking Chair Tim Scott (R-S.C.) proposed completely eliminating the office during the crafting of the GOP’s party-line tax bill last year, but the Senate parliamentarian struck down the move as unrelated to the budget process.
“Treasury maintains that the Office of Financial Research will be appropriately staffed to perform its duties to support the Financial Stability Oversight Council and its member agencies,” a Treasury spokesperson said in a statement.
The OFR, created and designed as an independent body in Dodd-Frank, collects underlying data used to calculate the Secured Overnight Financing Rate, an interest rate widely used as a benchmark for financial contracts. Senate Republicans’ proposal to eliminate the office last year would have provided Treasury with the necessary authority to continue collecting data for SOFR.
Since taking office, Treasury Secretary Scott Bessent has overhauled FSOC, in an effort to make it focus more on “economic growth” and less on “prophylactic” measures to address brewing financial risks.
The cuts come alongside brewing concern on Wall Street of turmoil in private credit markets. In recent months, major private credit funds have had to limit the amount of money that their investors can withdraw, as investors have tried to flee the asset class.
Last month, the research office penned a report examining the potential for spillover effects should private credit markets experience major disruptions. It estimated that total lending to private credit entities by banks and nonbanks ranges between $410 billion and $540 billion.
In remarks on Monday, Federal Reserve Chair Jerome Powell said the Fed is monitoring the turmoil, but that he does not think it poses a broader risk to the financial system.
Sen. Elizabeth Warren (D-Mass.), the top Democrat on the Banking Committee, blasted the cuts in a statement to POLITICO.
“As risks emerge in the financial system and cracks in credit markets spread, the Trump Administration is gutting the office designed to evaluate financial risks in a giveaway to Wall Street,” she said. “This is just the latest move by President Trump and his financial regulators to undermine financial stability and pave the way for another crash.”