The Treasury Department will look at Financial Stability Oversight Council designations as part of a broader regulatory review requested by President Donald Trump, according to a person close to the matter.
That review was called for in a Feb. 3 executive order asking for a re-examination of the Dodd-Frank Act, which established FSOC and the "systemically important financial institution" label that the council has applied to several of the largest U.S. insurance companies.
Republicans in Congress have been critical of the nonbank SIFI designation process, linking the designations to what they see as the potential for taxpayer-funded company bailouts under a "too big to fail" scenario.
When asked to comment on Treasury Secretary Steven Mnuchin's position on FSOC, a Treasury spokesperson said the department is now considering "which regulations make sense" and will "identify duplication between agencies and assess what issues need further action."
The FSOC designation places a company under stricter federal supervision and higher capital requirements. Insurance company SIFIs are still awaiting proposed capital rules from the Federal Reserve Board.
Of the four nonbank SIFIs labeled by FSOC, only Prudential Financial Inc. and American International Group Inc. still hold their designations. MetLife Inc.'s status is clouded by a pending appeals court decision after it won a legal battle to shed its SIFI status a year ago, while General Electric Capital Corp. divested its financial segments until it was able to lose its SIFI designation.
FSOC, which is chaired by Mnuchin, could de-designate firms through a vote of the heads of its member agencies. It is composed of 10 voting members and five nonvoting members.