Delaney Statement on MetLife SIFI Designation

WASHINGTON – Today, the Financial Stability Oversight Council (FSOC) announced that MetLife has been preliminarily designated as a Systematically Important Financial Institution (SIFI), triggering additional regulatory requirements.

Congressman John K. Delaney (MD-6) a member of the House Committee on Financial Services, issues the following statement:

“I won’t comment on the specific merits of the MetLife designation, but I do have concerns about the process behind the designation, particularly regarding the lack of communication and transparency. To best address systemic risk, maintain healthy markets, and protect American jobs, I believe we need to improve FSOC processes, which is why I introduced bipartisan FSOC reform. I generally support FSOC and its goals, but believe the details can be improved. SIFI designation is a relevant tool for FSOC to have at its disposal, but one it must employ with significant caution, as it has very material implications to companies designated. The Council should focus on the riskiness of the underlying activities at these entities, including how they are structured and capitalized.”

In July, Rep. Delaney and Rep. Dennis Ross (FL-15) introduced The Financial Stability Oversight Council Improvement Act (H.R. 5180) to address concerns about their lack of transparency in the SIFI designation process. The bill reforms specific elements of the FSOC and the Office of Financial Research (OFR), improving their ability to accurately respond to threats to financial stability while also maintaining the core function and mission of comprehensively monitoring the stability of our nation’s financial system.

The legislation directly reforms the SIFI designation procedure for FSOC.

Reforms include:

• Requiring FSOC to notify a nonbank financial company that it has been identified for SIFI evaluation with an explanation of their concerns, prior to a SIFI designation
• Codifying FSOC procedures for SIFI designation and voting requirements
• Requiring FSOC to consider the impact of SIFI designation
• Mandating that FSOC explain the basis of its designation to the institution
• Allowing an institution to submit a plan to modify its business prior to designation
• Allowing an institution to contest their SIFI designation every five years

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