Republicans slam U.S. financial stability council as secretive

(Corrects Representative Garrett’s first name to Scott in paragraph 6, clarifies in paragraph 3 that Lew testified earlier this year and not Lew and Yellen)

Dec 8 Republican lawmakers on Tuesday lashed out at a major council of U.S. regulators charged with responding to threats to the financial system, saying the Financial Stability Oversight Council is secretive and unwilling to share information.

Financial Services Committee Chairman Jeb Hensarling, of Texas, depicted the council, which includes the heads of the Securities and Exchange Commission and Federal Deposit Insurance Commission, as “powerful government administrators, secretive government meetings, arbitrary rules, and unchecked power to punish or reward.”

This was the first time that as many as eight of the 10 voting members of the council testified before the House of Representatives committee. Federal Reserve Chair Janet Yellen was absent along with Treasury Secretary Jack Lew, who testified earlier this year.

Council members told the hearing they could not share much of the information used to monitor banks and financial companies because it is considered “non-public” or confidential.

Wisconsin Republican Sean Duffy pressed the council, created by the 2010 Dodd-Frank financial reform law, for analysis, memos and correspondence that led it to designate MetLife Inc, General Electric Co and American International Group as systemically important financial institutions, known as “too big to fail.”

“You need to become more like us – more transparent, more open to the American public,” New Jersey Republican Scott Garrett said.

MetLife has sued the council for designating it a “non-bank systemically important financial institution” last year, requiring it to hold more capital.

Last year, the non-partisan Government Accountability Office said the council needed to shed more light on its process to determine if a company is systemically important. (Reporting by Lisa Lambert; Editing by Richard Chang)
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