New Rules for Financial Regulators: Considering Alternatives Before Fed Oversight.
This bill changes how the government monitors large financial companies that are not banks. Before the Financial Stability Oversight Council (FSOC) can place a nonbank company under strict supervision by the Federal Reserve, it must first prove that less severe regulatory actions or plans proposed by the company itself are insufficient. This aims to ensure that federal regulators use the least burdensome methods necessary to protect the stability of the US financial system, potentially affecting the cost and availability of financial services.
Key points
Requires the Financial Stability Oversight Council (FSOC) to explore alternative regulatory measures before subjecting a nonbank financial company to Federal Reserve supervision.
Alternatives include applying heightened standards by existing regulators or implementing written risk mitigation plans submitted by the company itself.
FSOC can only proceed with Federal Reserve supervision if all alternative actions are deemed insufficient to mitigate the threat to financial stability.
Introduced
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