MetLife filed suit recently to challenge the FSOC’s designation of the company as a nonbank SIFI. The complaint alleges that the FSOC’s process did not conform to statutory obligations under Dodd-Frank and that the process violated the company’s right to due process and violated the separation of powers. MetLife argues that the FSOC did not properly weigh the information before it, that it “consistently relied on vague standards and assertions, unsubstantiated speculation, and unreasonable assumptions,” and that it did not give the company a meaningful opportunity for rebuttal because the FSOC did not provide access to the data upon which it was drawing to make a conclusion.
The complaint also cites the (widely criticized) Office of Financial Research study on the effect of the asset management industry on financial stability, noting that, despite the conclusions in that report, no asset managers were currently being considered for SIFI designations. The complaint also highlights the difference between the activities-based approach that the Council is considering with respect to the asset management industry with the company specific inquiry taken in the MetLife designation.