Financial Stability Oversight Council 2011 – Federal Register Recent Federal Regulation Documents

Section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank Act'') authorizes the Financial Stability Oversight Council (the ``Council'') to require a nonbank financial company to be supervised by the Board of Governors of the Federal Reserve System (the ``Board of Governors'') and be subject to prudential standards in accordance with Title I of the Dodd-Frank Act if the Council determines that material financial distress at the nonbank financial company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the nonbank financial company, could pose a threat to the financial stability of the United States. The proposed rule and attached guidance describe the manner in which the Council intends to apply the statutory standards and considerations, and the processes and procedures that the Council intends to follow, in making determinations under section 113 of the Dodd-Frank Act. The Council issued an advance notice of proposed rulemaking on October 6, 2010, and a notice of proposed rulemaking on January 26, 2011, regarding determinations under section 113.

The Financial Stability Oversight Council (the ``Council'' or ``FSOC'') proposes regulations to implement the Freedom of Information Act (the ``FOIA''). This proposed rule would implement the requirements of the FOIA by setting forth procedures for requesting access to FSOC records. The Dodd-Frank Act, which established the Council, provides that FOIA applies to data or information submitted to the Council.

Section 622 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``Act'' or ``Dodd-Frank Act'') establishes a financial sector concentration limit that generally prohibits a financial company \1\ from merging or consolidating with, acquiring all or substantially all of the assets of, or otherwise acquiring control of, another company if the resulting company's consolidated liabilities would exceed 10 percent of the aggregate consolidated liabilities of all financial companies.\2\ This concentration limit is intended, along with a number of other provisions in the Dodd-Frank Act, to promote financial stability and address the perception that large financial institutions are ``too big to fail.'' Section 622 of the Act also requires the Financial Stability Oversight Council (the ``Council'') to: (i) Complete a study of the extent to which the concentration limit would affect financial stability, moral hazard in the financial system, the efficiency and competitiveness of United States financial firms and financial markets, and the cost and availability of credit and other financial services to households and businesses in the United States; and (ii) make recommendations regarding any modifications to the concentration limit that the Council determines would more effectively implement section 622.\3\ On January 18, 2011, the Council approved and issued its concentration limit study and the recommendations on how to effectively implement section 622. The Council seeks public comment on the Council recommendations described below. The Council will review and, if appropriate, revise its recommendations in response to the public comments it receives.