U.S. Judge Questions Regulators on MetLife Designation
February 10 2016 - 1:10PM
Dow Jones News
WASHINGTON—A U.S. District Judge questioned government lawyers
in a hearing on MetLife Inc.'s push to overturn its designation as
a "systemically important financial institution"—a tag created by
the 2010 Dodd-Frank law that comes with strict oversight.
Judge Rosemary Collyer told Justice Department lawyers,
representing the Financial Stability Oversight Council, or FSOC,
that she was "trying to figure out" how their process for tagging
the company was reasonable, while also stating that the legal
standard for their decision was a relatively low bar.
The court was set to resume arguments later Wednesday morning. A
decision from the U.S. District Court for the District of Columbia
would likely be appealed by the losing side, so the case could drag
on for months without a final resolution.
MetLife, the largest U.S. life insurer by assets, contends that
regulators erred when they declared the firm to be a so-called
systemically important financial institution, or SIFI, in December
2014. But the company is also mounting a broader legal attack that
could limit future actions by FSOC, the regulatory group created by
Dodd-Frank to identify firms for which failure could bring down the
entire economy.
MetLife is the first and only SIFI to sue the oversight council.
But three other SIFIs—insurers American International Group Inc.
and Prudential Financial Inc. and General Electric Co.'s financing
arm, GE Capital—could file similar lawsuits if MetLife prevails.
Those firms have been facing investor pressure to shrink in light
of tighter SIFI regulation.
An FSOC victory, on the other hand, would protect a major plank
of Dodd-Frank designed to extend tighter supervision to the
nation's largest financial firms.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
February 10, 2016 12:55 ET (17:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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