Republicans on the Senate Banking Committee are urging Treasury Secretary Steve Mnuchin to pursue an end to the Financial Stability Oversight Council’s (FSOC) ability to designate systemically important financial institutions and stop future bank bailouts.
“We write in strong support of President Trump’s Executive Order setting core principles for regulating the United States financial system,” the Republican senators wrote in their letter to Mnuchin this week. “As part of your review and report on the existing laws, regulations, guidance and government policies “that inhibit Federal regulation of the United States financial system in a manner consistent with the Core Principles,” we hope that you will review the policies and procedures underlying the Financial Stability Oversight Council’s (FSOC) determination that a nonbank financial company shall be subject to supervision by the Board of Governors of the Federal Reserve System and subject to enhanced prudential standards.”
The letter was signed by Sens. Tim Scott (R-SC), Tom Cotton (R-AR), Pat Toomey (R-PA), Richard Shelby (R-AL), Mike Crapo (R-ID), Mike Rounds (R-SD), John Kennedy (R-LA), Ben Sasse (R-NE), David Perdue (R-GA), and Thom Tillis (R-NC).
“The FSOC’s process for designating non-bank systemically important financial institutions lacks transparency and accountability, insufficiently tracks data, and does not have a consistent methodology for determinations,” the senators wrote. “Consequently, the designation process has created substantial new regulatory costs while putting taxpayers on the hook for any future bailout to these firms. It frustrates the ability of American companies to be competitive with foreign firms, while thwarting economic growth.”
They urged Mnuchin to use all available tools as secretary of the Treasury to end “too big to fail” and ensure that hard-working individuals are not responsible for any new bailouts.