Oversight Committee Holds First Meeting, Faces Legislators' Doubts
WASHINGTON-The Financial Stability Oversight Council, which includes NCUA, held its first meeting and faced open doubts from lawmakers and others about how fast it can move and what it can accomplish.
Lawmakers wondered aloud whether the council members would be hamstrung by interagency disagreements, and whether they could even agree on their top priorities, as regulators testified before the Senate Banking Committee. "I want to know very specifically the areas of conflict that have arisen and the areas of conflict that you anticipate arising as you implement this legislation," said Sen. Mike Johanns (R-NE), according to American Banker, an affiliate of Credit Union Journal.
Regulators tried to assure Congress that the new council was getting along fine. "I don't think, senator, there are disagreements as such," said Treasury Deputy Secretary Neal S. Wolin. "I think on the question of what should be the appropriate transparency policy of the council, what should be the structure by which votes are taken, all those things, people have different views, but...I don't think I'm in a position to say there's been, you know, controversies or fault lines. It's been a good, cooperative effort in that respect."
Not Just A Happy Face
Federal Reserve Board Chairman Ben Bernanke agreed. "I have to tell you honestly, and I'm not just trying to put [on] a happy face here, is that in terms of the substance of the rule writings that we have so far addressed, I don't see any deep or principled controversies at this point," he said.
Yet there were signs of strife. The Office of the Comptroller of the Currency protested a move by the FDIC to complete its own securitization rule ahead of the requirements mandated by the Dodd-Frank reform act, American Banker reported.
For the Fed's part, Bernanke told lawmakers that the central bank is giving the Treasury Department technical and policy advice on how to set up the council. "We are working with the Treasury to develop the council's organizational documents and structure," he told the panel. "We are also assisting the council with the construction of its framework for identifying systemically important non-bank financial firms and financial markets utilities, as well as with its required studies on proprietary trading and private fund activities of banking firms and on financial-sector concentration limits."