A US federal court in the District of Columbia held that the Financial Stability Oversight Council did not follow two of its own requirements or properly consider costs in designating MetLife, Inc. as subject to special oversight by the Board of Governors of the Federal Reserve System even though it is not a banking organization. According to the court, under the Dodd-Frank Wall Street Reform and Consumer Protection Act, FSOC has the authority to designate a non-bank financial institution for enhanced prudential oversight when “material financial distress” at the company “could pose a threat to the financial stability of the United States.” However, according to the court, FSOC did not apply its own rules and guidance in evaluating MetLife’s potential vulnerability to financial distress and how it might threaten US financial stability prior to designating the firm as systemically important. “Indeed,” said the court, FSOC’s final determination “hardly adhered to any standard when it came to assessing MetLife’s threat to U.S. financial stability” (emphasis added). In addition, although Dodd-Frank does not have an express requirement that FSOC consider the cost to MetLife in evaluating the benefit of subjecting it to enhanced prudential oversight, a requirement to consider cost is implicit in the statute, claimed the court. Specifically, the court held that the requirement under relevant law that FSOC consider appropriate “risk-related” factors “plainly subsumes consideration of cost.” The US Department of Treasury has announced the government will appeal the court’s decision.