Financial Stability Oversight Council

FSOC Proposed Rule on Nonbank Financial Company Supervision

On January 18, the Financial Stability Oversight Council proposed a rule describing the criteria to be considered in determining whether a nonbank financial company is subject to supervision by the Board of Governors of the Fed. Under the Dodd-Frank Act, the FSOC is authorized to designate nonbank financial companies for enhanced supervision by the Board of Governors. The proposed rule is based on feedback received in response to an advance notice of proposed rulemaking regarding the designation criteria issued on October 6, 2010. Comments on the proposed rule must be received within 30 days after publication in the Federal Register. Treasury Release. Proposed Rule.

FSOC Risk Retention Study

On January 18, the Financial Stability Oversight Council released a study on the macroeconomic effects of the risk retention requirements under the Dodd-Frank Act. The study examines how risk retention can help reform the securitization market, protect the public against irresponsible lending practices, and facilitate economic growth by allowing for safe and stable credit formation for consumers, businesses, and home owners. Treasury Release. FSOC Study.

FSOC Volcker Rule Study

On January 18, the Financial Stability Oversight Council issued a study required by the Dodd-Frank Act entitled, “Study & Recommendations on Prohibitions on Proprietary Trading & Certain Relationships with Hedge Funds & Private Equity Funds”. The study recommends, among other things, that rulemaking agencies consider providing exceptions for certain funds that are within the Volcker Rule’s broad definition of “hedge fund” and “private equity fund”. FSOC Study.

Bair Testimony on Mortgage Servicing Deficiencies

On December 1, FDIC Chairman Bair testified at the Senate Banking Committee hearings on Problems in Mortgage Servicing from Modification to Foreclosure. In her statement, Chairman Bair (i) provided background on the robo-signing and related foreclosure documentation problems as well as other deficiencies in the mortgage servicing process, (ii) discussed the FDIC’s efforts to address servicing problems, and (iii) indicated that she believes the newly-established Financial Stability Oversight Council can play a central role in facilitating broad agreements among the major stakeholder groups. Bair Speech.