The House Financial Services Committee (“House Committee”) issued a report on February 28, 2017 calling into question the process by which the Financial Stability Oversight Council (FSOC) designates certain non-bank companies as "too big to fail.” Based on subpoenaed documents requested by the House Committee and the sworn testimony of Treasury Department officials, the report concludes that the FSOC is "inconsistent and arbitrary" in exercising its power to designate certain nonbank companies as systemically important. The report echoes criticisms made by government watchdogs and courts of the FSOC's transparency and its nonbank SIFI designation process.  

Over the objections many, including asset managers, insurance companies, and even legislators and other regulators, the Financial Stability Oversight Council (FSOC) has pushed ahead with its mandate to identify risks to financial stability that could arise from the material financial distress or failure, or ongoing activities, of nonbank financial companies (Non-bank SIFIs). Thus far, the FSOC has designated four firms as Non-bank SIFIs: On July 8, 2013, the FSOC voted to designate American International Group, Inc. and General Electric Capital Corporation, Inc.; on September 19, 2013, the FSOC voted to designate Prudential Financial, Inc.; and on December 18, 2014, the FSOC voted to designate MetLife, Inc.  MetLife is not taking the FSOC's action lying down, however.  The firm has taken to the courts to challenge its Non-bank SIFI designation. And more influential industry voices are speaking out against not only the designation process, but the very need for prudential oversight of Non-bank SIFIs.