In late March, DC District Court judge Rosemary M. Collyer overturned the FSOC’s designation of MetLife as a SIFI. The district judge found that “FSOC’s unacknowledged departure from its guidance and express refusal to consider costs require the Court to rescind the final determination.”
The editorial board of the New York Times took issue, calling the decision “a setback to regulation intended to protect the economy from the inherent risks of an undersupervised financial system.” The editorial charged that because MetLife had also undertaken steps to shrink to “less threatening proportions” like other designated firms (AIG and GE Capital), the suit was “intended not to avoid downsizing but to weaken the council.” In addition, the New York Times expressed concern that the suit would have a “chilling effect on the council’s exercise of its power and consume valuable time and resources if it decides to appeal. All of which could undermine the panel’s ability to spot and tame systemic risks before they explode. “
Ricardo Anzaldua, the General Counsel of MetLife, responded, saying that MetLife has always been supportive of “robust regulation of the life insurance industry.” Instead of weakening the FSOC as the New York Times charged, MetLife stated that the court case was “furthering the standards and procedures that Congress created.” Anzaldua wrote, “Dodd-Frank sets forth a detailed set of criteria for determining whether an entity is systemically risky, or too big to fail. The oversight council’s designation of MetLife satisfied only one of those criteria, the obvious one: that MetLife is a large institution.”