Today, U.S. Representative Ed Royce (R-CA) questioned Treasury Deputy Assistant Secretary Patrick Pinschmidt of the Financial Services Oversight Council (FSOC) at a House Financial Services Committee hearing titled "Oversight of the Financial Stability Oversight Council.” Rep. Royce's questions for Pinschmidt focused on FSOC's work related to the asset management industry, as well as the lack of transparency and public disclosure at FSOC:
“While FSOC's step back from rashly designating asset managers as SIFIs was a positive development, it did not address the Council's lack of transparency in the process before and after a vote,” said Rep. Royce. “I was disappointed by Mr. Pinschmidt's non-answers when it comes to some very simple questions about how the Council plans to look at asset managers going forward.”
In response to Rep. Royce questions about the lack of public comment on FSOC work related to asset managers and asset management activities Pinschmidt stated, "The Council recognizes the importance of engaging with the public on its work, and that was part of the reason why the Council hosted an asset management conference back in May. We would expect, to the extent that this work moves forward, additional consultation and collaboration."
The Dodd-Frank Act empowers FSOC to designate non-bank financial institutions as “systemically important financial institutions,” or SIFIs, which are subject to heightened prudential standards and supervision by the Federal Reserve. Rep. Royce voted against the final version of the legislation in 2010, citing its lack of focus on subprime mortgages that caused the crisis of 2008, failure to eliminate “Too Big To Fail” and future taxpayer bailouts, and restrictions to access to capital for small businesses and consumers. He has been a vocal proponent of increasing transparency, Congressional oversight, and public disclosure at FSOC, and supports legislative efforts to do so.
