The U.S. House may be getting close to holding a vote on H.R. 4061, a bill that could help life insurers and other financial services companies fight back when the Financial Stability Oversight Council (FSOC) designates them as “systemically important financial institutions” (SIFIs).
Members of the House Rules Committee agreed Wednesday, without bothering to record the vote, to create a rule for floor consideration of H.R. 4061, the ”Financial Stability Oversight Council Improvement Act” bill. The bill was introduced by Rep. Dennis Ross, R-Fla.
Links to information about the House Rules meeting, including a video recording of the meeting, are available here.
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Lawmakers created FSOC in the Dodd-Frank Act, in response to the Great Recession. The act requires FSOC to monitor and address potential threats to the U.S. financial system. FSOC developed the SIFI system in an effort to identify financial services companies other than banks that might be critical to the financial system.
FSOC’s organizers wanted FSOC to have the tools needed to keep tabs on any problems developing at SIFIs, and to step in if it looked as if a SIFI were facing difficulties that the SIFI’s usual regulators were unable to control.
The officials who developed the SIFI system argued that they needed to keep the system as flexible and as opaque as possible, to keep SIFI managers from using loopholes to escape from FSOC’s jurisdiction.
The large life insurers and other companies FSOC designated as SIFIs, such as MetLife Inc., have argued that the SIFI system has ended up being unreasonably mysterious, and has subjected them to complicated rules without giving them a clear explanation of how they can shed SIFI status.