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From Banking and Finance Law Daily, October 6, 2014

MetLife appeals SIFI designation says 8-K

By Jim Hamilton, J.D., LL.M.

MetLife is appealing the decision by the Financial Stability Oversight Council to designate the company a systemically important financial institution (SIFI), thereby potentially making the company subject to enhanced regulation under the Dodd-Frank Act. In a Form 8-K filed with the Securities and Exchange Commission, the company said that it delivered notice to the FSOC requesting a written and oral evidentiary hearing to contest the Council’s proposed determination. In accordance with its regulations, the Council will schedule an evidentiary hearing within 30 days after the Company’s request and will make a final determination on the Company’s status as a non-bank SIFI within 60 days after the hearing.

Following a recent meeting, FSOC provided the company with a detailed written explanation of the basis of the proposed determination. The Council’s vote was unanimous with one member voting present.

The Form 8-K noted that if the Company is designated by the Council as a non-bank SIFI, it will be subject to supervision by the Board of Governors of the Federal Reserve System and be subject to enhanced prudential standards under the Dodd-Frank Act, which may include requirements regarding risk-based capital and leverage, liquidity, stress-testing, overall risk management, resolution plans and early remediation, and may also include additional standards regarding capital, public disclosure, short-term debt limits, and other related subjects as appropriate.

After the FSOC preliminary determination, MetLife strongly disagreed with FSOC’s preliminary designation of MetLife as a SIFI. MetLife is not systemically important under the Dodd-Frank Act criteria, noted the company, but rather has served as a source of financial strength and stability during times of economic distress, including the 2008 financial crisis. The company said that it is not ruling out any of the available remedies under Dodd-Frank to contest a SIFI designation.

Companies: Metlife, Inc.

MainStory: TopStory DoddFrankAct FinancialStability

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