Today the House passed Rep. Scott Garrett's (NJ-05) amendment to the Financial Services and General Government Appropriations bill. The amendment would prevent the Secretary of the Treasury and the Chairman of the Securities and Exchange Commission, both voting members of Financial Stability Oversight Council (FSOC), from designating any additional nonbank companies as Systemically Important Financial Institutions (SIFIs).
"American taxpayers shouldn't be on the hook to bail out big banks, Wall Street, and any other financial institution that the government decides is too-big-to-fail," said Garrett. "As the FSOC designates both banks and non-banks as "systemically important,' it essentially puts the government's stamp of approval for taxpayer bailouts into federal law. I'm pleased that my colleagues took a stand today to protect the wallets of millions of hardworking Americans who make their financial decisions around kitchen tables instead of Wall Street board rooms."
During the 2008 crisis, the taxpayers were forced to spend billions of dollars to bail out financial institutions that were considered too big to fail. The Dodd-Frank Act codified the government's ability to designate specific banking firms as too-big-to-fail, and gave FSOC the ability to designate additional non-banks as well.
Rep. Garrett is Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises. He is the sponsor of the Bailout Prevention Act and the Financial Stability Oversight Council (FSOC) Transparency and Accountability Act.