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Washington,
D.C.
–
Today
Senator
Tim
Scott
(R-S.C.)
and
nine
of
his
colleagues
on
the
Senate
Banking
Committee
sent
a
letter
to
Secretary
of
the
Treasury
Steve
Mnuchin
expressing
strong
support
for
the
Department
of
the
Treasury
to
use
all
tools
available
to
end
the
Financial
Stability
Oversight
Council’s
(FSOC)
'Too
Big
To
Fail'
policies
and
to
ensure
taxpayers
are
not
responsible
for
any
new
bailouts.
Among
its
many
flaws,
Dodd-Frank
enshrined
'Too
Big
To
Fail'
as
an
official
policy
by
creating
a
Federal
council
to
designate
nonbanks
as
"systemically
important
financial
institutions".
These
designations
offer
large
firms
implicit
taxpayer
backing
for
future
bailouts
and
result
in
massive
new
regulatory
costs.
FSOC's
recent
designation
of
a
nonbank
was
overturned
by
a
Federal
judge
for
being
arbitrary
and
capricious.
In
addition
to
Senator
Scott,
Senators
Tom
Cotton
(R-Arkansas),
Pat
Toomey
(R-Pennsylvania),
Richard
Shelby
(R-Alabama),
Mike
Crapo
(R-Idaho),
Mike
Rounds
(R-South
Dakota),
John
Kennedy
(R-Louisiana),
Ben
Sasse
(R-Nebraska),
David
Perdue
(R-Georgia),
and
Thom
Tillis
(R-North
Carolina)
also
signed
the
letter.
The
Senators
expressed
concern
that
the
inconsistent
practices
currently
used
by
the
FSOC
result
in
burdensome,
unnecessary
regulatory
costs
that
ultimately
make
American
companies
less
competitive
around
the
world.
The
full
text
of
the
letter
is
below.
Additionally,
a
PDF
of
the
letter
can
be
found
here.
The
Honorable
Steven
Mnuchin
Secretary
of
the
Treasury
U.S.
Department
of
the
Treasury
1500
Pennsylvania
Avenue
NW
Washington,
DC
20500
Dear
Secretary
Mnuchin,
We
write
in
strong
support
of
President
Trump’s
Executive
Order
setting
core
principles
for
regulating
the
United
States
financial
system.
As
part
of
your
review
and
report
on
the
existing
laws,
regulations,
guidance
and
government
policies
“that
inhibit
Federal
regulation
of
the
United
States
financial
system
in
a
manner
consistent
with
the
Core
Principles,”
we
hope
that
you
will
review
the
policies
and
procedures
underlying
the
Financial
Stability
Oversight
Council’s
(FSOC)
determination
that
a
nonbank
financial
company
shall
be
subject
to
supervision
by
the
Board
of
Governors
of
the
Federal
Reserve
System
and
subject
to
enhanced
prudential
standards.
The
FSOC’s
process
for
designating
non-bank
systemically
important
financial
institutions
lacks
transparency
and
accountability,
insufficiently
tracks
data,
and
does
not
have
a
consistent
methodology
for
determinations.
Consequently,
the
designation
process
has
created
substantial
new
regulatory
costs
while
putting
taxpayers
on
the
hook
for
any
future
bailout
to
these
firms.
It
frustrates
the
ability
of
American
companies
to
be
competitive
with
foreign
firms,
while
thwarting
economic
growth.
Please
know
you
have
our
strong
support
for
using
all
the
tools
available
as
Secretary
of
Treasury
to
end
‘Too
Big
To
Fail’
and
ensure
that
hard-working
Americans
are
not
responsible
for
any
new
bailouts.
Sincerely,
Senator
Tom
Cotton,
R-Arkansas
Senator
Pat
Toomey,
R-Pennsylvania
Senator
Richard
Shelby,
R-Alabama
Senator
Mike
Crapo,
R-Idaho
Senator
Mike
Rounds,
R-South
Dakota
Senator
John
Kennedy,
R-Louisiana
Senator
Ben
Sasse,
R-Nebraska
Senator
David
Perdue,
R-Georgia
Senator
Thom
Tillis,
R-North
Carolina
Senator
Tim
Scott,
R-South
Carolina
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