Corporate Accountability

Dodd, Frank, And Other Leading Current And Former Members Of Congress Defend Landmark Law Protecting Nation From “Too Big To Fail” And Risk Of Financial Crisis

Washington, DC – Today, on behalf of former Senator Christopher Dodd, former Representative Barney Frank, Democratic Leaders in both chambers of Congress, current Ranking Member of the Senate Banking Committee Sherrod Brown, and other leading current and former Members of Congress, Constitutional Accountability Center filed a brief in MetLife v. Financial Stability Oversight Council in the U.S. Court of Appeals for the D.C. Circuit, in defense of the landmark Dodd-Frank banking law and its system of regulations written to help prevent another financial crisis.

 

Read the brief here: http://theusconstitution.org/sites/default/files/CAC-MetLife-Amicus.pdf 

 

By way of background, the Financial Stability Oversight Council (FSOC) is a creation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In order to help protect the stability of our financial system, the FSOC can designate – by a supermajority vote – a non-bank company as a “systemically important financial institution” (known as “SIFI”). Such a designation subjects that company to regulation, after a notice and comment process, by the Federal Reserve Board. The FSOC designated MetLife with SIFI status in 2014 by a vote of 9-1. MetLife challenged that designation in a D.C. federal district court and won with a deeply flawed decision.

 

Former Representative Frank said, “I was surprised that the district court judge substituted her judgment for the FSOC’s on a specific issue that is solely within its jurisdiction and competence. But I was shocked that the judge went on to substitute her judgment for that of the entire Congress, by effectively amending the statute. And I was very troubled that she amended it by adding two requirements that Congress rejected – and that have the effect of rendering a significant part of the law unworkable.”

 

Senator Brown continued, “We must remember that giant non-bank institutions like AIG and Lehman Brothers took unacceptable risks that helped fuel the worst financial crisis since the Great Depression. Wall Street Reform was created to protect working Americans from once again paying the price when ‘too-big-to-fail’ institutions are left unchecked. Any legislative or legal actions to weaken that critical oversight mission could jeopardize our ability to address risky Wall Street practices in the future, leaving taxpayers and our economy vulnerable to another crisis.”

 

CAC President Elizabeth Wydra added, “This challenge to Dodd-Frank’s efforts to protect consumers and our economy is cut from the same cloth as the politically-motivated legal attacks on other progressive milestones, including the Affordable Care Act and climate change regulation. Like those other lawsuits, this one should also fail. The text, history, and legislative plan of this law clearly give the FSOC the power to designate certain very large nonbank financial institutions as exceptionally threatening to the stability of the financial system as a whole, and I look forward to the Court of Appeals overturning Judge Collyer’s deeply flawed ruling.”

 

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Resources

 

CAC “friend of the court” brief on behalf of former Senator Christopher Dodd, former Representative Barney Frank, current Senate Democratic Leader Harry Reid, Senate Banking Committee Ranking Member Sherrod Brown, Senate Banking Committee Members Jeff Merkley, Jack Reed, Charles Schumer, and Elizabeth Warren, Senate Judiciary Committee Ranking Member Patrick Leahy, former Senators Tom Harkin and Tim Johnson, House Democratic Leader Nancy Pelosi, House Judiciary Committee Ranking Member John Conyers, House Financial Services Committee Members Michael Capuano, Keith Ellison, and Al Green, Representatives Elijah Cummings and Luis Gutierrez, and former Representatives Paul Kanjorski and Brad Miller: http://theusconstitution.org/sites/default/files/CAC-MetLife-Amicus.pdf 

 

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Constitutional Accountability Center (www.theusconstitution.org) is a think tank, public interest law firm, and action center dedicated to fulfilling the progressive promise of the Constitution’s text and history.

 

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