(Bloomberg) — U.S. bank regulators are scheduled to vote next week on whether to extend MetLifeInc.’s deadline for filing a so-called living will as the insurer sues the government for subjecting it to stricter oversight.
The Federal Reserve and the Federal Deposit Insurance Corp. are “actively considering the possibility” of pushing back MetLife’s July 1, 2016, date for submitting a plan explaining how it would unwind itself if it were to enter bankruptcy, according to a court document released Friday night.
The request stems from MetLife’s suit against the Financial Stability Oversight Council, a group of regulators led by Treasury Secretary Jacob J. Lew. The panel in December deemed the insurer a systemically important non-bank, subjecting it to Fed oversight. Companies designated by the council must draw up a resolution plan, known as a living will.
The U.S. District Court in Washington has asked the FSOC to push back the deadline by about six months so that it can hear arguments on the case before MetLife “begins to expend time and money to prepare its resolution plan.” The Fed and FDIC are expected to vote in the next week on whether to grant an extension, according to the court filing.
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MetLife’s lawsuit against the council, whose members include Fed Chair Janet Yellen and FDIC Chairman Martin Gruenberg, is the first challenging an FSOC decision. The council has labeled three other non-banks systemically important: insurers American International Group Inc. and Prudential Financial Inc., and General Electric Co.’s finance arm.
New York-based MetLife prefers that the court rule on the case in the first few months of 2016 because of the “substantial preparation and investment of resources” needed to comply with the FSOC designation. The systemically important label means that regulators think the company’s failure could pose risks to the financial system, though it doesn’t imply that the firm is currently facing difficulty.