MetLife Asks Appeals Court to Uphold Removal of 'SIFI' Label--Update
August 16 2016 - 11:08AM
Dow Jones News
By Ryan Tracy
A federal judge was right to rescind federal regulators'
oversight of MetLife Inc., the company argued to an appeals court
in the only legal brief it will file before a crucial hearing later
this year.
MetLife filed the brief late Monday responding to the Financial
Stability Oversight Council, the regulatory panel that earlier this
year told the appellate court it met legal requirements when it
designated the company as a "systemically important financial
institution" in 2014.
The oversight council, or FSOC, is scheduled to file a response
next month. Then the U.S. Court of Appeals for the District of
Columbia Circuit will appoint a panel of judges to hear the case,
and set a date for oral arguments.
The case goes to a central part of the 2010 Dodd-Frank law: the
government's authority to bring in large financial firms for
federal oversight if it deems their failure could put the economy
at risk.
A spokesman for Treasury Secretary Jacob Lew, who chairs the
FSOC, said Tuesday that "the district court's ruling leaves one of
the largest, most complex, and most interconnected financial
companies in the country with less oversight than before the
financial crisis. The Council acted well within its authority in
designating MetLife, and we will continue to vigorously defend the
Council's work on appeal."
The lawsuit began in 2015, when MetLife sued to overturn its
SIFI tag and the tougher oversight that comes with it. The company
said FSOC's decision was arbitrary and capricious, didn't follow
its own procedures, and didn't properly consider costs to the
company.
The FSOC strongly disputes those claims. But U.S. District Judge
Rosemary Collyer sided with the company in March.
FSOC quickly appealed, saying Judge Collyer's logic amounted to
asking the council to perform an "impossible task." Former senior
regulators and lawmakers, including former Fed Chairmen Ben
Bernanke and Paul Volcker, have written to the appeals court saying
Judge Collyer's decision would undermine efforts to bolster
financial stability.
MetLife dismissed those arguments Monday. "Far from demanding
clairvoyance or overriding FSOC's substantive conclusion about
MetLife's alleged systemic importance, the district court simply
required that FSOC adhere to its own regulatory standards and the
basic precepts of reasoned agency decision-making," the company
wrote.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
August 16, 2016 10:53 ET (14:53 GMT)
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