1 

Minutes of the Financial Stability Oversight Council

Held February 4, 2015 

PRESENT: 

Jacob J. Lew, Secretary of the Treasury and Chairperson of the Financial Stability Oversight 

Council (Council) 

Janet Yellen, Chair, Board of Governors of the Federal Reserve System (Federal Reserve) 

Martin J. Gruenberg, Chairperson, Federal Deposit Insurance Corporation (FDIC) 

Mary Jo White, Chair, Securities and Exchange Commission (SEC) 

Timothy Massad, Chairman, Commodity Futures Trading Commission (CFTC)

Richard Cordray, Director, Consumer Financial Protection Bureau (CFPB) 

Melvin Watt, Director, Federal Housing Finance Agency (FHFA) 

Thomas J. Curry, Comptroller of the Currency, Office of the Comptroller of the Currency (OCC) 

Debbie Matz, Chairman, National Credit Union Administration (NCUA) 

Roy Woodall, Independent Member with Insurance Expertise 

Richard Berner, Director, Office of Financial Research (OFR), Department of the Treasury (nonvoting member) 

Michael McRaith, Director, Federal Insurance Office, Department of the Treasury (non-voting 

member)

John P. Ducrest, Commissioner, Louisiana Office of Financial Institutions (non-voting member) 

Adam Hamm, Commissioner, North Dakota Insurance Department (non-voting member) 

David Massey, Deputy Securities Administrator, North Carolina Department of the Secretary of 

State, Securities Division (non-voting member) 

GUESTS: 

Department of the Treasury 

Sarah Bloom Raskin, Deputy Secretary of the Treasury 

Christopher J. Meade, General Counsel 

Patrick Pinschmidt, Deputy Assistant Secretary and Executive Director of the Council 

Board of Governors of the Federal Reserve System

Nellie Liang, Director, Office of Financial Stability Policy and Research

Federal Deposit Insurance Corporation 

Jason Cave, Special Advisor to the Chairman for Supervisory Matters 

Securities and Exchange Commission 

Lona Nallengara, Chief of Staff

Commodity Futures Trading Commission

Lawranne Stewart, Special Counsel
2 

Consumer Financial Protection Bureau 

Steven Antonakes, Deputy Director 

Federal Housing Finance Agency 

Mario Ugoletti, Special Advisor to the Director

Comptroller of the Currency 

Jennifer Kelly, Senior Deputy Comptroller for Bank Supervision Policy and Chief National Bank 

Examiner

National Credit Union Administration 

John Worth, Chief Economist 

Office of the Independent Member with Insurance Expertise

Chris Ledoux, Senior Advisor 

Office of Financial Research

Patricia Mosser, Deputy Director for Research and Analysis

Federal Insurance Office

Steven Seitz, Acting Deputy Director (Financial Stability)

Louisiana Office of Financial Institutions

Margaret Liu, Senior Vice President, Conference of State Bank Supervisors 

North Dakota Insurance Department

Mark Sagat, Counsel and Manager, Financial Policy and Legislation, National Association of 

 Insurance Commissioners 

North Carolina Department of the Secretary of the State, Securities Division

Christopher Staley, Counsel, North American Securities Administrators Association

Executive Session 

The Chairperson called the executive session of the meeting of the Council to order at 

approximately 3:08 P.M. (EST). The meeting was conducted by telephone. The Chairperson 

outlined the meeting agenda, which had previously been distributed to the members together 

with copies of the resolutions and other materials. The agenda for the meeting included the 

following subjects: (1) extension of the comment period for the Council’s Federal Register 

notice seeking public comment on asset management products and activities; and (2) the 

Council’s process for considering nonbank financial companies for potential designation. 

1. Extension of the Comment Period for the Council’s Federal Register Notice Seeking 

Public Comment on Asset Management Products and Activities 

The Chairperson noted that the Council had received numerous requests asking the Council to 

extend the public comment period for its Federal Register notice seeking comment on potential 
3 

risks to U.S. financial stability from asset management products and activities. The Council had 

voted to approve the notice at its meeting on December 18, 2014, and comments on the notice 

were required to be submitted by February 23, 2015. 

The Chairperson said he supported extending the comment period and asked whether there were 

any questions or concerns. Hearing none, he presented to the Council the following resolution 

regarding the extension of the comment period. 

“WHEREAS, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “DFA”) 

established the Council to identify risks to the financial stability of the United States, promote 

market discipline, and respond to emerging threats to the stability of the U.S. financial system; 

and 

WHEREAS, over the past year the Council has been engaged in work to analyze risks associated 

with the asset management industry and whether any such risks could affect U.S. financial 

stability; and

WHEREAS, the Council is evaluating industry-wide products and activities to assess potential 

risks associated with the asset management industry; and 

WHEREAS, certain areas of interest have been identified as warranting further review and 

analysis, particularly whether risks associated with liquidity and redemptions, leverage, 

operational functions, and resolution in the asset management industry could affect U.S. 

financial stability; and 

WHEREAS, on December 18, 2014, the Council approved the “Notice Seeking Comment on 

Asset Management Products and Activities” (the “Notice”) and the publication of the Notice in 

the Federal Register and on the Council’s website; 

WHEREAS, comments on the Notice were required to be submitted no later than February 23, 

2015; and 

WHEREAS, to allow the public more time to review, consider, and comment on the Notice, the 

Council believes it is appropriate to extend the comment period for the Notice. 

NOW, THEREFORE, BE IT RESOLVED, that the Council hereby approves the extension of the 

comment period for the Notice until March 25, 2015, and authorizes the Chairperson, or his 

designee, to cause notice of such extension to be published in the Federal Register and on the 

Council’s website, in a form and manner acceptable to the Chairperson or his designee, and to 

otherwise make it available to the public as the Chairperson deems appropriate. 

BE IT FURTHER RESOLVED, that the Council hereby delegates authority to the Chairperson, 

or his designee, to take such other actions and issue such other documents incident and related 

to the foregoing as they may deem necessary or appropriate to fulfill the Council’s objectives in 

connection with the publication of the notice of the extension of the comment period for the 

Notice.” 
4 

The Chairperson asked for a motion to approve the resolution, which was made and seconded. 

The Council approved the resolution by unanimous vote. 

2. Supplemental Procedures Relating to Nonbank Financial Company Determinations 

The Chairperson then introduced the next agenda item, supplemental procedures relating to the 

Council’s nonbank financial company designations process. The Chairperson noted that the 

Council heard a detailed presentation at its open meeting on January 21, 2015, on outreach to 

stakeholders regarding the nonbank designations process and the changes to that process 

proposed by staff. 

The Chairperson then noted that based on the Council’s discussion of this issue at its previous 

meeting, he proposed that the Council proceed to a vote on the supplemental procedures. After a 

discussion among members of the Council, the Chairperson presented to the Council the 

following resolution. 

“WHEREAS, section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act 

(the “DFA”) authorizes the Financial Stability Oversight Council (the “Council”) to determine 

that a nonbank financial company shall be supervised by the Board of Governors of the Federal 

Reserve System (the “Federal Reserve”) and shall be subject to enhanced prudential standards 

if the Council determines that material financial distress at the nonbank financial company, or 

the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the 

nonbank financial company, could pose a threat to the financial stability of the United States; 

and 

WHEREAS, the Council issued a final rule and accompanying interpretive guidance (the “Rule 

and Guidance”), codified at 12 C.F.R. Part 1310, that describes the criteria and the processes 

and procedures by which the Council will determine that a nonbank financial company shall be 

supervised by the Federal Reserve and shall be subject to enhanced prudential standards under 

the DFA; and 

WHEREAS, the Rule and Guidance describes a three-stage process that the Council expects to 

use for evaluating a nonbank financial company prior to a Council vote on a proposed 

determination; and 

WHEREAS, the Council has received recommendations from a number of companies, trade 

associations, public interest organizations, and members of Congress and their staffs regarding the 

Council’s process relating to nonbank financial company determinations; 

WHEREAS, the Council has conducted a review of its practices related to the evaluation of 

nonbank financial companies under section 113 of the DFA; and 

WHEREAS, the staffs of the Council Members and their Agencies have prepared the attached 

“Supplemental Procedures Relating to Nonbank Financial Company Determinations” (the 
5 

“Supplemental Procedures”), which supplement the processes and procedures set forth in the 

Rule and Guidance; and 

WHEREAS, the staffs of the Council Members and their Agencies also have prepared the 

attached “Notice of Document Availability” (the “Notice”) to be published in the 

Federal Register regarding the publication of the Supplemental Procedures on the Council’s 

website; and 

WHEREAS, the Council’s evaluation of nonbank financial companies is supported by the 

Council’s Nonbank Financial Company Designations Committee (the “Nonbank Designations 

Committee”), which is overseen by the Council’s Deputies Committee; and 

WHEREAS, the Supplemental Procedures provide for the Deputies Committee to instruct the 

Nonbank Designations Committee to form an analytical team to commence an active review of a 

nonbank financial company in Stage 2 of the Council’s process for evaluating nonbank financial 

companies for potential determination; and 

WHEREAS, under the Supplemental Procedures, the Council will notify a nonbank financial 

company after the Deputies Committee instructs the Nonbank Designations Committee to form 

an analytical team to commence an active review of a company in Stage 2. 

NOW, THEREFORE, BE IT RESOLVED, that the Council hereby approves and adopts the 

Supplemental Procedures; 

BE IT FURTHER RESOLVED, that the Council hereby delegates authority to the Deputies 

Committee to instruct the Nonbank Designations Committee to form an analytical team to 

commence an active review of a nonbank financial company in Stage 2; 

BE IT FURTHER RESOLVED, that the Council hereby delegates authority to the Deputies 

Committee to notify a nonbank financial company that comes under active review in Stage 2, and 

to take such other actions as the Deputies Committee may deem necessary or appropriate for the 

purpose of evaluating nonbank financial companies in accordance with the Supplemental 

Procedures; 

BE IT FURTHER RESOLVED, that the Council hereby approves the Notice and authorizes the 

Chairperson, or his designee, to cause the Notice to be published in the Federal Register, in a 

form and manner acceptable to the Chairperson or his designee, and to otherwise make it 

available to the public as the Chairperson deems appropriate; and 

BE IT FURTHER RESOLVED, that the Council hereby delegates authority to the Chairperson, 

or his designee, to make technical, nonsubstantive, or conforming changes to the text of the 

Supplemental Procedures and to the Notice to ensure that the Council can issue and publish the 

Supplemental Procedures on the Council’s website and publish the Notice in the Federal 

Register, and to take such other actions and issue such other documents incident and related to 
6 

the foregoing as they deem necessary or appropriate to fulfill the Council’s objectives in 

connection with such publication.” 

The Chairperson asked for a motion to approve the resolution, which was made and seconded. 

The Council approved the resolution by unanimous vote. 

The Chairperson adjourned the meeting at approximately 3:22 P.M. (EST).