MetLife Asks Appeals Court to Uphold Removal of 'SIFI' Label--Update

By Ryan Tracy 

A federal judge was right to rescind federal regulators' oversight of MetLife Inc., the company argued to an appeals court in the only legal brief it will file before a crucial hearing later this year.

MetLife filed the brief late Monday responding to the Financial Stability Oversight Council, the regulatory panel that earlier this year told the appellate court it met legal requirements when it designated the company as a "systemically important financial institution" in 2014.

The oversight council, or FSOC, is scheduled to file a response next month. Then the U.S. Court of Appeals for the District of Columbia Circuit will appoint a panel of judges to hear the case, and set a date for oral arguments.

The case goes to a central part of the 2010 Dodd-Frank law: the government's authority to bring in large financial firms for federal oversight if it deems their failure could put the economy at risk.

A spokesman for Treasury Secretary Jacob Lew, who chairs the FSOC, said Tuesday that "the district court's ruling leaves one of the largest, most complex, and most interconnected financial companies in the country with less oversight than before the financial crisis. The Council acted well within its authority in designating MetLife, and we will continue to vigorously defend the Council's work on appeal."

The lawsuit began in 2015, when MetLife sued to overturn its SIFI tag and the tougher oversight that comes with it. The company said FSOC's decision was arbitrary and capricious, didn't follow its own procedures, and didn't properly consider costs to the company.

The FSOC strongly disputes those claims. But U.S. District Judge Rosemary Collyer sided with the company in March.

FSOC quickly appealed, saying Judge Collyer's logic amounted to asking the council to perform an "impossible task." Former senior regulators and lawmakers, including former Fed Chairmen Ben Bernanke and Paul Volcker, have written to the appeals court saying Judge Collyer's decision would undermine efforts to bolster financial stability.

MetLife dismissed those arguments Monday. "Far from demanding clairvoyance or overriding FSOC's substantive conclusion about MetLife's alleged systemic importance, the district court simply required that FSOC adhere to its own regulatory standards and the basic precepts of reasoned agency decision-making," the company wrote.

Write to Ryan Tracy at [e-mail]

(END) Dow Jones Newswires

August 16, 2016 10:53 ET (14:53 GMT)

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