Legislative Activity

Lawmakers Discuss FSOC Oversight

On Wednesday, September 17, the House Financial Services Subcommittee on Oversight and Investigations held a hearing titled “Oversight of the Financial Stability Oversight Council.” During the hearing, Members emphasized the importance of transparency within the Financial Stability Oversight Council (FSOC) and called for increased due process and accountability. At the hearing, FSOC Deputy Assistant Secretary Patrick Pinschmidt indicated the FSOC would coordinate a working group on asset management activities. Further, all systemically important designations, including for insurance companies, are determined based on the individual company and factors such as leverage and interconnection with the rest of the financial system. Mr. Pinschmidt also emphasized that FSOC’s authority is limited to the designation process and does not extend to the regulatory oversight of designated entities.

House Passes Jobs Package

On Thursday, September 18, the House voted 253-163 to pass H.R. 4, the Jobs for America Act. The legislative package contains two financial services bills: (1) H.R. 1105, the Small Business Capital Access and Jobs Preservation Act, which would exempt private equity funds advisers from certain disclosure requirements; and (2) H.R. 2274, the Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act of 2014, which would allow certain mergers and acquisitions brokers to bypass registration requirements.

Regulatory Activity

CFTC Adopts Rules on Margin Requirements, Utility Special Entities

On Wednesday, September 17, the Commodity Futures Trading Commission (CFTC) held an open meeting and voted unanimously to adopt a proposed rule on margin requirements and a final rule on utility special entities. The proposed rule on margin requirements would require swap dealers and major swap participants to post and collect collateral for uncleared swap transactions.  The final rule on utility special entities would amend the definition of the term “swap dealer” to permit a person to exclude certain types of swaps entered into with special entities that are utilities from the $25 million special entity de minimis threshold above which a person dealing in such swaps must register as a swap dealer. The CFTC also released an advance notice of proposed rulemaking soliciting comments regarding how the uncleared margin rule should apply in a cross-border context, including whether the rules should apply at the transaction-level or the entity-level. This measure may be partially in reaction to the recent U.S. District Court of the District of Columbia decision related to the CFTC’s guidance for cross-border application of its Dodd-Frank Act rules.

SEC, CFPB to Hold Meetings

On October 1, the Consumer Financial Protection Bureau (CFPB) will hold a meeting of its Credit Union Advisory Council (Council). During the meeting, the Council will discuss issues related to overdrafts and consumer complaints. Additionally, on October 9, the Securities and Exchange Commission (SEC) will hold a meeting of its Investor Advisory Committee.