‘TOO BIG TO FAIL’ FINANCIAL RULES:
Voting 297 for and 121 against, the House on April 11 passed a bill (HR 4061) making it more difficult for the Financial Stability Oversight Council to regulate large nonbank financial institutions, such as insurance groups and mutual funds, whose failure could seriously damage financial markets and the overall economy. Under the bill, the FSOC would have to clear newly imposed bureaucratic hurdles before it could designate a nonbank institution for closer federal supervision and potentially new limits on its activities.
Comprised of the heads of the government’s nine financial-agencies, the FSOC was created by the 2010 Dodd-Frank law to give another layer of scrutiny to “systemically important” banks and nonbank institutions popularly deemed “too big to fail.” The council can require potentially unstable institutions to increase capital and liquidity levels and refrain from certain high-risk business practices, among other steps.
Randy Hultgren, R-Ill., said, “Let’s remember that investors bear the costs of inappropriate regulation being applied to nonbanks. … We should be providing nonbanks like mutual funds a chance to work with the FSOC to address their concerns before slapping investors with new regulatory costs.”
Maxine Waters, D-Calif., said, “One of the reasons Congress created the FSOC was to make sure that large, interconnected firms like Bear Stearns, AIG or Lehman Brothers would never again devastate the stability of our financial system and jeopardize our country’s strong economy with … relentless demand for profits over safe and sound operations.”
A yes vote was to send the bill to the Senate.
ARKANSAS
Voting yes: Westerman
TEXAS
Voting yes: Gohmert, Ratcliffe