WASHINGTON — The judge’s decision barring federal regulators from overseeing MetLife imposed “novel requirements” on federal regulatory agencies that Congress never enacted, according to a brief submitted to an appeals court reviewing the decision by two former Federal Reserve Board chairmen.
Indeed, the judge “substituted” her judgment “for that of the U.S. financial regulatory agency heads specifically designated by Congress to make such judgments,” said Ben S. Bernanke and Paul A. Volcker in their brief to the Appeals Court reviewing the decision.
Moreover, the former chairmen said, in practice the decision “undermine both the letter of the relevant authorizing documents and the intent of the designation process embodied “in the Dodd-Frank Act (DFA).”
See also: MetLife defends its SIFI challenge
They said they wrote their brief because “we are concerned about the implications of the District Court decision with respect to the designation of MetLife by FSOC as subject to Federal Reserve oversight. “In sum, it is unfortunate that the District Count ruling fails to recognize the compelling logic of the FSOC designation process,” the brief added.
The brief was prepared by Michael Bradfield, who served as general counsel to the Fed under Volcker in the 1980s. He also recently served as general counsel of the Federal Deposit Insurance Corp.
The brief was submitted U.S. Court of Appeals for the D.C. Circuit. The brief was filed in MetLife v. Financial Stability Oversight Council (FSOC).
The April 30 decision by Judge Rosemary Collyer declared that the FSOC’s designation of MetLife as a systemically important financial (SIFI) was arbitrary and capricious.
The FSOC filed its first brief in the case June 16 through the Department of Justice on behalf of the Federal Financial Oversight Council.
MetLife must file its reply brief by Aug. 15. The government is pushing for oral arguments in the case in September.
The brief follows submission of the FSOC’s original brief to the Appeals Court June 16. It was the opening step in the government’s appeal of the March 30 decision of Collyer to declare that the FSOC’s designation of MetLife as a systemically important financial (SIFI) was arbitrary and capricious.