Rep. Scott Garrett (R-NJ), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, issued the following statement today after the passage of the FY2015 Financial Services and General Government (FSGG) Appropriations Bill, H.R. 5016, which included his amendment to ensure that non-bank financial institutions cannot be designated as Systemically Important Financial Institutions (SIFI) by the Financial Stability Oversight Council (FSOC).
"With every reckless designation of a non-bank company as a SIFI, FSOC makes our economy more dangerous and unstable. FSOC is not working out as intended, so I'm glad to see that the House adopted my amendment today. We must prevent government regulators from expanding the doctrine of too-big-to-fail into other parts of our economy. And we must not allow too-big-to-fail to take root in the non-bank financial sector. These companies are too important as a counterbalance to the mega-banks for us to ruin them with crony capitalism."
Rep. Garrett's amendment would prohibit the Secretary of the Treasury and the Chair of the Securities and Exchange Commission (SEC), in their roles as members of the FSOC, from designating non-bank financial companies as SIFIs. The FSOC, as created under the Dodd-Frank Act, has the ability to label non-banking financial companies as systemically important and has essentially codified an endless cycle of too-big-to-fail.