The role of the Financial Stability Oversight Council in assuring the coordination and harmonization of federal regulations implementing the Dodd-Frank Act has been raised by legislators and others as it becomes apparent that FSOC has no statutory power to ensure either the simultaneous adoption of the regulations implementing the Volcker Rule provisions of Dodd-Frank or their uniformity. At a recent House hearing, former Financial Services Committee Chairman Spencer Bachus (R-AL), currently Chairman Emeritus of the Committee, examined the failure of FSOC to coordinate regulatory uniformity among its constituent members, such as the SEC and CFTC. The Chairman Emeritus asked Treasury to respond in a memorandum to the Committee outlining the legislative authority it needs to achieve such a result.
Last December, Senate Banking Committee member Mark Warner (D-VA) told the
Recently, former Fed Chair Paul Volcker emphasized that the final Volcker Rule regulations should be uniform for all covered financial institutions. However, the relevant regulating agencies have overlapping responsibilities, idiosyncratic ideas of their own, and differing approaches. The FSOC, he said, while a step in right direction, needs a much stronger mandate from Congress to be effective.
FSOC is housed in the Treasury and the Secretary of Treasury is FSOC's permanent chair. This gives Treasury a bully pulpit from which to jawbone its constituent members on the need for regulatory harmony. But perhaps bully pulpits are overrated and jawboning historically powerful independent federal executive agencies can only go so far. FSOC may need statutory authority in any Dodd-Frank corrections legislation.