According to Senator of Susan Collins, author of Section 171, it is the intent of Section 171(b)(7) to require the federal banking agencies, subject to the recommendations of the Financial Stability Oversight Council, to develop capital requirements applicable to insured depository institutions, depository institution holding companies, and nonbank financial companies supervised by the Federal Reserve Board that are engaged in activities that are subject to heightened standards under Section 120 of the Act.
However, a colloquy between Senator Collins and Senator Shaheen, in which Senator Dodd concurred, revealed that Section 171(b)(7) does not to create any inference that minimum capital requirements are the appropriate standard or safeguard for the Council to recommend to be applied to any non-bank financial company that is not subject to Fed supervision with respect to any Section 120 activity. Rather, the Council has full discretion not to recommend the application of capital requirements to any such non-bank financial firm engaged in any such activity. While minimum capital rules can shield public and private stakeholders from risks posed by material distress that could arise from firms engaging in certain activities, noted Senator Collins, minimum capital rules may not be an appropriate tool to apply under all circumstances. (Cong. Record, July 15, 2010, S5903).