(Bloomberg) — MetLife Inc.’s lawsuit challenging its designation by regulators as critical to the economy should be thrown out, U.S. Justice Department lawyers said without making public their arguments to the judge.
MetLife on January 13 became the first nonbank to challenge a decision by a panel of regulators, led by the Treasury secretary, that it is a systemically important financial institution, or SIFI, subject to stricter oversight. The phrase more commonly used to describe such institutions is “too big to fail.”
The insurer argued that it’s already subject to comprehensive supervision on the state level and that enhanced federal oversight will raise the cost of financial protection for consumers.
In a federal court filing Friday in Washington, the Justice Department asked that the case be dismissed. The U.S. filed its supporting reasons for the request under seal.
MetLife was the fourth company other than banks to receive the SIFI label from the Financial Stability Oversight Council.
The label means that regulators think the company’s failure could pose risks to the financial system, though it doesn’t imply that the firms currently face difficulty.
In response to a request by the judge in the case, the Federal Reserve and the Federal DepositInsurance Corp. in March extended by six months, to Dec. 31, 2016, MetLife’s deadline to file a so-called living will which details how if would unwind itself in a bankruptcy.