WASHINGTON MetLife plans to argue its case before regulators that they were wrong to designate the life insurance giant for a new supervision regime meant for giant firms.
The company said in a securities filing Friday it was requesting a hearing before the Financial Stability Oversight Council to contest the FSOC's Sept. 4 decision to preliminarily designate MetLife as a "systemically important financial institution." Under the Dodd-Frank Act, bank holding companies with over $50 billion in assets and any FSOC-designated nonbank firm are eligible for special Federal Reserve Board supervision meant to limit the impact of financial behemoths on the economy.
If FSOC makes the designation final, which is expected, MetLife would become the fourth nonbank firm to get the SIFI label. But its decision to seek a "written and oral evidentiary hearing" delays the process at least. The council, which includes heads of the banking regulators and is chaired by Treasury Secretary Jack Lew, now has 30 days to schedule the hearing. A final determination is made within 60 days of the hearing taking place.
A Treasury spokesperson confirmed that a company has sent a request for a hearing but declined to comment further. (Officials will not publicly disclose the name of any firm until its designation by the FSOC becomes final.)
Besides MetLife, Prudential Financial was the only other firm to have formally protested receiving the SIFI label. The council issued a final designation for Prudential in September 2013. (GE Capital and American International Group have also received final designations.)
Last month, when the council proposed a designation for MetLife, the company quickly issued a response objecting to the move.
"MetLife strongly disagrees with the Financial Stability Oversight Council's preliminary designation of MetLife as a SIFI," chief executive Stephen A. Kandarian said in a Sept. 4 statement. "MetLife is not systemically important under the Dodd-Frank Act criteria. In fact, MetLife has served as a source of financial strength and stability during times of economic distress, including the 2008 financial crisis."