Proposed amendments to interpretive guidance on nonbank financial company designations as posing a risk to financial stability is on the agenda for the first 2019 open meeting of the Financial Stability Oversight Council (FSOC) when it gets together Wednesday in Washington.
The council – which counts among its membership the leaders of all five of the federal financial institution regulatory agencies (plus the federal supervisors of the securities, commodities and government-sponsored enterprises) – will also hold an executive session regarding U.S. nonfinancial corporate credit and proposed amendments to the Council’s interpretive guidance on nonbank financial company designations, according to a release by Treasury Secretary Steven Mnuchin, who chairs the FSOC.
According to FSOC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) sets forth the standard for the council’s designation of a nonbank financial company as posing a risk to financial stability, requiring FSOC to take into account 10 specific considerations when evaluating those companies.
In 2012, FSOC approved a final rule and interpretive guidance on its authority to require supervision and regulation of certain nonbank financial companies. Since then, the council has both designated certain nonbank firms for enhanced supervision, and rescinded such designations, which has been the trend since 2015. Since that year, the council has rescinded the designations for three firms (GE Capital, American International Group (AIG), and Prudential Financial, Inc.)
Open-session FSOC meetings are made available to the public via live webcast.