Following the U.S. Senate passage of H.R.3110, the Financial Stability Oversight Council Insurance Member Continuity Act, a bipartisan bill introduced by Congresswoman Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services, and Congressman Randy Hultgren (R-IL), a member of the Financial Services Committee, which would extend the term of the Financial Stability Oversight Council (FSOC) independent member with insurance expertise, Ranking Member Waters made the following statement:
“I applaud my colleagues in the Senate for passing this commonsense legislation that would allow the Financial Stability Oversight Council to continue to have a member with insurance expertise, and ensure that the FSOC has a complete roster of voting members. The FSOC plays a crucial role in keeping our financial system safe, and this technical correction is an example of bipartisan cooperation to improve the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and the functioning of our regulatory system.”
Under current law, it is unclear if the FSOC member with insurance expertise, who is nominated by the President and confirmed by the Senate to serve six years, can continue serving in this position as an acting official once the member’s term expires. The term of Roy Woodall, the current FSOC independent member with insurance expertise, expires on September 30 of this year. His successor has not yet been nominated. This legislation allows the FSOC independent member with insurance expertise to remain in the position past his or her term for the earlier of (1) 18 months or (2) when a successor is confirmed. This is similar to the term of a Commissioner at the Securities and Exchange Commission.
FSOC was created by Dodd-Frank for the purpose of identifying risks to financial stability that could arise from the material financial distress, failure, or ongoing activities, of large, interconnected bank holding companies, as well as nonbanks; promoting market discipline by eliminating expectations on the part of market participants that the government will shield such participants from losses; and responding to emerging threats to financial stability. The FSOC is composed of ten voting members and five nonvoting members.