Financial Services and General Government Appropriations Act, 2024

Floor Speech

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Mrs. WAGNER. Mr. Chair, I rise today to prevent the Financial Stability Oversight Council, FSOC, from making it easier to designate nonbank financial companies as a systemically important financial institution, or SIFI.

The 2008 financial crisis was a result of Fannie Mae and Freddie Mac's poor government housing policy that bilked taxpayers out of billions of dollars and the inability of financial regulators to properly identify systemic risk and take action until it was too late.

As a response to the crisis, Congress passed the Dodd-Frank Act of 2010. The Democrats' law has dramatically reduced competition in the banking sector, imposed barriers to entry for new banks, and saddled financial institutions with a mountain of new requirements that hit small, midsize, and regional banks particularly hard.

Under Dodd-Frank, FSOC has the power to designate companies as a SIFI and, therefore, subject to Federal Reserve supervision and enhanced prudential standards--in other words, too big to fail.

Last week, FSOC finalized guidance that would allow it to apply these same ``too big to fail'' burdens to nonbank financial institutions, such as asset managers or broker-dealers, insurance companies, and private funds.

It has been reported that the annual consumer cost of designating a nonbank financial institution as a SIFI could range from $5 billion to $8 billion, yet FSOC's new guidance fails to require any cost-benefit analysis when making such a designation. Let me repeat that one more time. These designations would cost consumers, American taxpayers, $5 billion to $8 billion per year.

This guidance put forth by the Biden administration rescinds the 2019 changes that rightfully moved FSOC's authority from an entities-based approach to an activities-based approach in determining whether a nonbank entity should be deemed a SIFI. To grant such unfettered discretionary power to a government agency should concern every American, particularly when the body exercising that power, FSOC, is composed almost entirely of members of a single political party.

Mr. Chair, I urge all of my colleagues to support this amendment that reins in our regulators, restores Congress' Article I powers, and saves Main Street investors billions of dollars.

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Mrs. WAGNER. Mr. Chair, I thank the gentleman for his consideration of the amendment. However, we have, in fact, held a hearing in the Financial Services Committee about this very issue and some of the costs that I am talking about. The $5 billion to $8 billion that this would cost our taxpayers to implement was a part of that discussion within the Financial Services Committee and came from testimony directly there.

Again, these designations would cost consumers, American taxpayers, $5 billion to $8 billion per year, and I urge my colleagues to support this amendment that reins in our regulators, restores Congress' Article I powers, and saves our Main Street investors billions and billions of dollars.

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Mrs. WAGNER. Mr. Chairman, I thank my friend across the aisle for his consideration and his kind words. I would just simply urge my colleagues to support this amendment that would rein in our regulators, and I yield back the balance of my time.

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