Judge rules MetLife isn't too big to fail; stripped label means less oversight
A federal judge in Washington, D.C., has ruled for insurer MetLife in its battle to cast aside a designation that allowed for stricter scrutiny by the Federal Reserve and possible higher capital requirements.
U.S. District Judge Rosemary Collyer said in an order that MetLife is not “too big to fail,” report the Wall Street Journal (sub. req.), the New York Times and USA Today.
The Wall Street Journal says the decision “deals a blow to the expansive post-financial-crisis safety net” and “could embolden other institutions to file similar challenges.”
The “too big to fail” label was made under the Dodd-Frank Act of 2010, passed after the 2007 mortgage meltdown and the financial crisis that followed. Collyer said she agreed with the insurer’s arguments that the Financial Stability Oversight Council had made an arbitrary and capricious decision.
A decision explaining her reasoning remains under seal until she rules on parties’ arguments about whether to release it.
Collyer is an appointee of President George W. Bush who “has cast a critical eye at Obama-era laws and regulations, especially those involving financial regulation,” according to a Wall Street Journal Law Blog story highlighting her past high-profile decisions.
