The Financial Stability Oversight Council is appealing a recent U.S. District Court decision overturning its designation of MetLife as a non-bank systemically important financial institution, arguing that “it leaves one of the largest, most complex and most interconnected financial companies in the country” without proper oversight.
On March 30, U.S. District Court for the District of Columbia Judge Rosemary Collyer ordered MetLife's December 2014 SIFI designation to be rescinded. In her order, Ms. Collyer said her decision was based on FSOC officials departing from their own standards for the SIFI designation process without explanation, and for failing to consider the costs to MetLife of being designated as such.
“Nothing in the District Court's analysis casts any doubts on the reasoning of the council's 341-page decision,” government lawyers argued in court documents filed Thursday, saying that Ms. Collyer's assessment of the guidance “was profoundly mistaken.” Nor were FSOC officials required to assess the likelihood of MetLife experiencing distress, or to consider the potential costs to MetLife, Department of Justice lawyers argued on FSOC's behalf.
MetLife has until Aug. 15 to reply, and the FSOC will have until Sept. 9 to answer any potential MetLife response. The government lawyers asked for oral arguments to be scheduled as early as possible in October, saying in court documents, “The issues presented in this case affect the council's ability to exercise” its designation authority.