Treasury Department Sends Systemic Risk Regulation Proposal to Congress, and Other Financial Regulatory Overhaul News July 24, 2009 | Print this page | Email this page On Wednesday, July 22, 2009, the Treasury Department sent draft legislation to Capitol Hill that would bring all financial firms under federal supervision and regulation, and would establish a new regulatory council – the Financial Services Oversight Council – to identify and manage emerging risks. The proposed council would work closely with the Federal Reserve, which would oversee Tier 1 financial holding companies – the large, interconnected firms that could pose a threat to the overall system.

Also expected from the Treasury Department this week are proposals to: (1) consolidate the Office of Thrift Supervision and the Office of the Comptroller of the Currency into the new National Bank Supervisor; and (2) give the federal government the ability and authority to shutter firms without damaging the larger financial system.

In other financial regulatory reform news, the Administration’s proposal to create a new Consumer Financial Protection Agency has been moving slowly in Congress, due to strong pushback from the financial industry. According to the Chairman of the House Financial Services Committee, Barney Frank (D-MA), his committee will not vote on the measure until September. In addition to industry opposition, Rep. Frank cited the already crowded congressional schedule as another reason for the delay.