The bill, by New Jersey Representative Scott Garrett, comes just a
day after a top U.S. securities regulator raised similar concerns
about the Financial Stability Oversight Council.
"It has become increasingly apparent that the Financial Stability
Oversight Council ... is in serious need of reform," said Garrett, a
high-ranking member of the House Financial Services Committee.
"The council meets in secret, refuses to disclose substantive
transcripts, and blocks any requests by other regulators or members
of Congress for a more open and transparent process," he said.
The FSOC was created by the 2010 Dodd-Frank reform law to keep an
eye on emerging systemic risks following the U.S. financial crisis
It comprises the heads of all the top regulatory agencies including
the chair of the Federal Reserve, and is chaired by Treasury
Secretary Jack Lew.
The group can impose additional regulations on large financial firms
that could destabilize the economy if they failed.
Three of the Securities and Exchange Commission's five commissioners
have complained publicly that they are unable to participate in
FSOC's deliberations, even as the FSOC has continued to push for
more regulations on asset management firms that are overseen by the
As chair of the SEC, Mary Jo White serves as the member who
represents the interests of the SEC on the council.
Each member, including White, regularly attends closed-door sessions
to discuss regulatory matters. Staffers from all of the FSOC-member
regulatory agencies who are tapped as "deputies" of the council also
But the law does not consider the other four SEC commissioners to be
FSOC members, so they do not participate in FSOC's decision-making.
Garrett said Thursday that the he recently sought permission from
the U.S. Treasury to attend a March 27 FSOC meeting, but was denied.
He said his bill contains a number of measures to make the council
more transparent. It would, for instance, permit certain members of
Congress to attend FSOC meetings, and allow other regulators who are
not technically FSOC members to participate.
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A Treasury spokesperson did not have an immediate comment on the
bill, but pointed to a two-page transparency policy statement issued
by the council.
That policy statement says the FSOC will open their meetings to the
public whenever possible, but that the council needs to exercise
caution because many discussions involve "supervisory and other
market-sensitive data" that must be protected.
As for who can attend meetings, a Treasury spokesperson told Reuters
on Wednesday that the council usually defers to the member agencies
to determine who attends top-level meetings.
"For deputies' meetings, we try to keep it to two attendees per
agency to allow for a more productive conversation," the
spokesperson said in an email.
Other FSOC member agencies, including the Commodity Futures Trading
Commission, also have multiple commissioners who do not attend the
Garrett's bill could potentially make it to the floor of the U.S.
House of Representatives, which is controlled by Republicans, for a
But while the Democratically-controlled Senate is not likely to take
up such a bill, the proposal is seen as likely to stir up the debate
over FSOC's structure and governance.
(Reporting by Sarah N. Lynch; editing by G. Crosse)
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