Appeals Court Approves Expedited Hearing in MetLife/FSOC Case
WASHINGTON //BestWire// - A federal appeals court granted a motion by the Financial Stability Oversight Council for an expedited process — with a possible October hearing date — in the legal battle to re-impose the systemically important financial institution designation on MetLife Inc.
The U.S. Court of Appeals for the District of Columbia Circuit granted the motion, which set a final written briefing deadline of Sept. 9. The FSOC asked for an October hearing date, but the court noted oral arguments are normally set at least 45 days after the final written briefs deadline.
“The statute authorizing the council to designate nonbank financial companies for Federal Reserve supervision is designed to help prevent another financial crisis by detecting and addressing potential threats to U.S. financial stability,” according to the scheduling motion filed by attorneys for the U.S. Department of Justice, which is representing the FSOC.
“The issues presented in this case affect the council’s ability to exercise this authority,” the motion said, “and it is necessary to resolve these issues to provide clarity to the council regarding the requirements applicable to its designations. This case therefore warrants expedited consideration.”
The appeals court took no action on setting the oral hearing date.
The FSOC is seeking to overturn an order by U. S. District Judge Rosemary M. Collyer, of the U. S. District Court for the District of Columbia, which stripped MetLife of the SIFI designation. A cascade of incurable administrative mistakes by regulators made such a designation illegal, said the ruling (Best’s News Service, April 7, 2016).
In the motion, the DOJ lawyers said the hearing schedule they submitted was similar to the one sought by the company.
MetLife declined comment.
With the removal of the SIFI designation on MetLife, the only other two U.S. insurers so designated are American International Group Inc. and Prudential Financial Inc.
Operating units of MetLife have current Best’s Financial Strength Ratings of either A (Excellent) or A+ (Superior).
On the afternoon of May 31, shares of MetLife Inc. (NYSE: MET) were trading at $45.37, down 0.87% from the previous close.
(By Frank Klimko, Washington correspondent, BestWeek: Frank.Klimko@ambest.com)