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This week, Americans for Tax Reform submitted a comment letter responding to the Financial Stability Oversight Council’s (FSOC) newly proposed interpretive guidance and analytic framework outlining procedures for the designation of nonbank financial companies as systemically important financial institutions (SIFIs).
FSOC’s proposals are entitled, Authority to Require Supervision and Regulation of Certain Nonbank Financial Companies and Analytic Framework for Financial Stability Risk Identification, Assessment, and Response.
ATR is requesting that FSOC rescind the proposals and reinstate the provisions and procedures outlined in the 2019 interpretive guidance.
ATR’s letter concludes that:
As drafted, the Proposal deviates from Congressional intent and court precedent while simultaneously making it easier to impose new prudential regulations on nonbank financial companies. This will undoubtedly increase regulation and compliance costs on the affected firms and their investors. The Council should be wary of slapdash changes in how nonbank financial companies will be designated as SIFIs. The Proposal may not “depart from a prior policy sub silentio or simply disregard rules that are still on the books,” or the Council’s actions may be found to be arbitrary and capricious.
Click here to read the letter.