Treasury Secretary Jack Lew fired back following the DC District Court’s Decision to overturn the FSOC’s designation of MetLife as a SIFI. In a press release after the decision was made public, Lew stated
“[s]ome opponents of financial reform have hailed the court’s decision as a win for our financial system. This is wrong and dangerously ignores the lessons of the financial crisis. FSOC’s authority to designate nonbank financial companies is a critical tool to address potential threats to financial stability, and it has made our financial system safer and more resilient. We intend to continue defending vigorously the process and the integrity of FSOC’s work, and I am confident that we will prevail.”
Following that statement, the FSOC elected to appeal the decision.
In an editorial, the Wall Street Journal criticized Lew’s response, calling his reaction (including the quick decision to appeal the decision) a “tantrum.” According to the editorial, “Mr. Lew is treating Judge Collyer’s reasoned analysis as a judicial micro-aggression, but he won’t necessarily find his safe space at the appellate level.” The Journal is skeptical that the appellate court will overrule the decision based on the facts of the case – in large part because of the FSOC’s failure to define “systemic risks.” The WSJ also notes that given that the decision was based on the factual and administrative arguments, constitutional arguments about the FSOC were not considered. However, the editorial warns that on appeal,
“the court would be free to consider whether the Constitution’s separation of powers can possibly be compatible with this new council. The same people at the council write rules, interpret them, enforce them and adjudicate them. This makes Mr. Lew the Judge Dredd of the U.S. economy. He would be wise not to give federal courts too many opportunities to reconsider his sweeping authority.”