Congressman Scott Garrett

Representing the 5th District of New Jersey

Garrett Denied Access to FSOC Meeting, Introduces Legislation to Bring Sunshine to Council

Apr 3, 2014
Press Release

WASHINGTON, D.C. – Rep. Scott Garrett (R-NJ), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, today introduced the Financial Stability Oversight Council (FSOC) Transparency and Accountability Act (H.R. 4387), to correct some of the most egregious and indefensible concerns about transparency and accountability at FSOC.

“Over the last two years, it has become increasingly apparent that the Financial Stability Oversight Council (FSOC), created by the Dodd-Frank Act, is in serious need of reform,” said Garrett upon introducing the legislation.  “The council meets in secret, refuses to disclose substantive transcripts, and blocks any requests by other regulators or Members of Congress for a more open and transparent process. 

“Last week, I specifically requested that the Department of Treasury allow me to attend the most recent FSOC meeting on March 27, 2014.  Treasury said no. 

“This follows on public reports of FSOC barring other financial regulators, whose agency principals are members, from attending and participating in these meetings.  This is completely unacceptable.  

“Congress granted this new body extraordinary and  unprecedented authority to unilaterally decide which private U.S. nonbank companies pose a systemic risk to the United States.  Companies that are designated are then subject to heightened regulatory scrutiny and are brought under the government safety net.  However, upon granting this significantly new authority, there was little thought given to what steps should be included to ensure appropriate accountability and oversight of this new body—prompting bipartisan concern. 

“Yesterday, a Democratic Commissioner of the Securities and Exchange Commission (SEC) joined a fellow Republican SEC Commissioner in his request for a more open, transparent, and accountable FSOC.  Currently, the Board is only made up of the single-party, politically-appointed heads of each financial services regulatory body.  The FSOC is not subject to any of the good governance laws that all of the traditional regulatory agencies are subject to.  There is no requirement that these meetings be open to the press, there is no allowance for appropriate congressional oversight, and there is no clarity around the exact rationale for any of the Council’s decisions.   

“To begin to correct some of the most egregious and indefensible concerns about transparency and accountability of this body, today I am introducing legislation that would:

  • Subject the FSOC to the Government in the Sunshine Act;
  • Subject the FSOC to the Federal Advisory Committee Act;
  • At all FSOC meetings, allow for the participation of all members of the Commissions and Boards represented;
  • Require that any vote taken by the principal of a Commission or Board represented must first be taken by that Commission or Board and the principal must then in turn vote that same decision at the Council; and
  • Allow for Members of Congress on the Congressional oversight committees of FSOC to be able to attend all FSOC meetings.

“The financial regulators, specifically the Federal Reserve—under the guise of FSOC and through its own actions—are in the process of fundamentally altering significant aspects of the way capital and credit are allocated in this country.  These are tremendous changes that will carry a lasting impact on the economic vibrancy of our nation for generations.  It is imperative these changes are not carried out in secret or behind closed doors.  It is the Congress’ constitutional responsibility to provide thorough and robust oversight of the entities Congress has tasked with this mission.  My legislation will hopefully begin to address some of the most immediate concerns associated with the FSOC and its lack of accountability to the American taxpayers and their elected representatives.”