The House Financial Services Committee today reported to the House floor along party lines two bills that would effectively shut down the operations of the Federal Stability Oversight Council (FSOC) for at least the next year.
The bills were passed by a 32-27 party line vote today.
However, analysts give long odds that these bills will become law.
It responds to concerns by MetLife specifically, and the money management and mutual fund industries in general, that designation of firms in their sectors as systemically important would be harmful and could make these companies uncompetitive.
They were pushed through the committee by conservative members who believe in less regulation, led by Rep. Jeb Hensarling, R-Texas, chairman of the committee, and Rep. Scott Garrett, R-N.J., who heads the panel’s Capital Markets Subcommittee.
One bill, H.R. 4881, would bar the FSOC from designating any systemically significant financial institutions for a year.
The chief sponsor of that bill, Rep. Randy Neugebauer, R-Texas, chairman of the Housing and Insurance Subcommittee, said in support of it Thursday that “I strongly believe that FSOC’s structure and its process for designating systemically important firms are fatally flawed.”
He said that, “Rather than using data, history, and economic analysis to justify SIFI designations, FSOC has used far-fetched, highly speculative ‘worst-case scenarios’ to justify an aggressive expansion of regulatory power from Washington.”
And, Neugebauer added, recent evidence shows that rather than making its own determinations about the systemic significance of large U.S. non-bank financial institutions, the FSOC has instead rubber-stamped decisions made by the G-20’s Financial Stability Board.”
Rep. Maxine Waters, D-Calif., ranking minority member of the committee, railed against it during Thursday’s debate.
“Under the guise of concerns about transparency, Republicans want the FSOC to halt its work, even if it has identified a firm that poses a risk to the economy, a threat to my constituents who want to buy a house, a car, or simply purchase groceries at the store. /* .premium-promo { border: 1px solid #ddd; padding: 10px; margin: 0 10px 10px 0; width: 200px; float: left; } .premium-promo li, .premium-promo ul { list-style-type: none; margin: 0; padding: 0; } .premium-promo li { margin: 0 0 10px; padding: 0 0 10px; border-bottom: 1px dotted #ddd; } .premium-promo h3 { text-transform: uppercase; font-size: 11px; } .premium-promo h4 { font-size: 16px; } .premium-promo a { text-decoration: none !important; } .premium-promo .btn { background: #0069a1; border-radius: 4px; display: inline-block; padding: 5px 10px; clear: both; color: #fff; font-weight: bold; } .premium-promo .btn:hover { background: #034c92; } */ “No, this is not a good-faith effort to increase transparency, because ultimately my colleagues on the other side of the aisle want to end the FSOC altogether,” Waters added.
The other bill, H.R. 4387, would allow all members of the commissions and boards represented on the FSOC — such as the Securities and Exchange Commission, the Federal Reserve, the Commodity Futures Trading Commission, and the National Credit Union Administration — to attend and participate in the FSOC’s meetings.
The bill also requires that before the principal of a Commission or Board represented on the FSOC votes as an FSOC member on an issue before the FSOC, the Commission or Board must vote on the issue, and the principal must follow that vote at the FSOC meeting.
The bill permits Members of the Committee on Financial Services and the Committee on Banking, Housing and Urban Affairs to attend all FSOC meetings, whether or not the meeting is open to the public.
In introducing the bill, Garrett said that, “The council meets in secret, refuses to disclose substantive transcripts, and blocks any requests by other regulators or Members of Congress for a more open and transparent process.” In April, Garrett was denied access to an FSOC meeting.
He noted the “tremendous changes” that the FSOC is considering in the way capital and credit are allocated and said “it is imperative these changes are not carried out in secret or behind closed doors.”
In debate on the bills Thursday, Waters said that Garrett’s bill politicizes membership by adding regulators’ commissioners and board members into the mix and that giving the committee members access to closed-door meetings on systemic risk might be unconstitutional.
“We are not dealing with a good-faith effort to address many of the transparency concerns a bipartisan group of members have raised,” Waters said. “Rather, this is an effort by Republicans to make the FSOC decision-making impossibly difficult.”
The bill’s immediate impact would likely be on the designation of MetLife as a systemically significant financial institution or SIFI. MetLife is in Stage III or the final stage, of the SIFI designation process. MetLife has been lobbying against designation as a SIFI for more than a year, and the FSOC has responded by slowing its decision-making process on MetLife to ensure it has all its ducks in a row before making a decision.
But, it would also impact money market mutual funds and money managers, who have been notified they are under scrutiny for possible designation as SIFIs.
The FSOC report noted that mortgage servicers and mortgage REITs are also being eyed for possible designation as SIFIs.
The FSOC already has designated three non-banks — American International Group, General Electric Capital Corp. and Prudential Financial, Inc. — as SIFIs.
The spotlight turned on money managers last September when an FSOC report prepared by the Treasury Department's Office of Financial Research identified activities of 20 of the largest U.S. money managers as possible sources of risk.
And, at the annual meeting of the Investment Company Institute May 21, Paul Schott Stevens, president and CEO, said that designating mutual funds as SIFIs “would impair the single best tool available to average Americans for retirement saving and individual investment — as well as a key source of financing in our economy.”
Treasury Secretary Jacob Lew heads the FSOC, which was created by the Dodd-Frank financial services reform law. A spokesman for the Treasury Department declined to comment.
Associated Press 
Andresr/Shutterstock Last year, some girlfriends and I met up for a glass of wine and started discussing (what else?) men. I don't recall how it came up, but my friend Sarah quipped emphatically, "I don't do Dutch treat." She went on to state that if a man wants to court her and enjoy her company, he should treat her. I was quite surprised. How could it be that two professional women in their mid-40s with investments in real estate and stocks could have such polar-opposite views on this subject? (You may wonder: Is Sarah is from the South? No, she's from New Jersey.) Don't Emasculate Your Date I often write about the advice my mother gave me when I started dating. My mother urged me to behave like Sarah; she said if I offered to pay on a date, I would emasculate the man. My mother had already been divorced twice when she gave me that tip. It made practical, economic sense to me that a man who had a higher income or more assets than I would be in the best position to pay for my meal. But as I progressed in my career (specifically when, at 26, I left a job in Washington, D.C., that paid $29,500 a year to become the youngest policy adviser to Oregon's governor, which paid $57,000 a year), most men my age made less than I did. My net worth was growing too, as I had already begun investing in the stock market and saving for retirement. In my late 20s, I went through a phase where I dated older men -- much older men. In those cases I didn't feel uncomfortable at all when they treated me. They were more established and had more money. One 50-year-old man even took me on a weekend trip to Canada. We enjoyed spending hours in Ottawa's Canadian Military Museum and drinking lattes at Second Cup. But I was never serious about these men, and they weren't serious about me, either. Equal in the Workplace and Equal in the Restaurant By the time I was 31 and had moved to San Diego for a job, I was making $110,000 a year. That's when my mindset changed. If I want to be treated equally in the workplace, why would I want to be treated unequally at a restaurant? From then on, when a man offered to treat, I'd always pull out my wallet. And if he refused to split the bill, I'd tell him that the next time was on me. And I meant it. Sarah's views aren't uncommon. In a 2013 research paper titled "Who Pays for Dates? Following versus Challenging Conventional Gender Norms," survey data shows that more than half of women claim they offer to help pay the bill when on a date -- but nearly half of those women secretly want men to reject their offers to pay. What really interested me in the survey was that nearly half of women were annoyed when men expected women to chip in. I asked my husband how he handled the bill issue when he dated women prior to me. "If I knew she made less money than I did, I would offer to treat," Dan said. But he soon followed with, "It's hard to treat someone like an equal partner when you're the one always footing the bill." My mother got to know Dan before she passed away. I'm sure she'd now agree that whatever I did financially in our relationship, it certainly didn't emasculate Dan the Man. More from Laurie Itkin
John Locher/APFederal Reserve Chair Janet Yellen JACKSON HOLE, Wyoming -- If anyone thought Janet Yellen might clarify her view of the U.S. job market in her speech here Friday, the Federal Reserve chair had a message: The picture is still hazy. Though the unemployment rate has steadily dropped, Yellen suggested that other gauges of the job market have become harder to assess and may reflect persistent weakness. These include many people jobless for more than six months, millions working part time who want full-time jobs and weak pay growth. Yellen offered no clarity on the timing of the first interest rate increase, which most economists still expect by mid-2015. Investors had been anticipating any firmer sign from Yellen about whether an improving economy might prompt the Fed to act sooner than expected to start raising rates. She instead offered further uncertainty. Damage inflicted by the Great Recession had complicated the Fed's ability to assess the U.S. job market and made it harder to determine when to adjust rates, Yellen said. "Uncertainty is the key word," said Ian Shepherdson, chief economist at Pantheon Economics. "Yellen is not about to leap from the fence at the next [Fed] meeting." Yellen said that for now, a broad assessment of the job market suggests that the economy still needs Fed support in the form of ultra-low rates and that inflation has yet to become a concern. "The assessment of labor market slack is rarely simple and has been especially challenging recently," Yellen said at the conference, which the Federal Reserve Bank of Kansas City sponsors each year at a lodge beside the majestic Grand Tetons. Yellen invoked language the Fed has used that record-low short-term rates will likely remain appropriate for a "considerable time" after the Fed stops buying bonds to keep long-term rates down. The bond buying is set to end this fall. Yellen stressed that the Fed's rate decisions will be dictated by the economy's performance. Repeating language from an appearance before Congress in July, Yellen said that if the economy improved faster than expected or if inflation heated up, rates could rise sooner. But she also said that if the economy under-performed, the Fed could delay its first rate hike. "Monetary policy is not on a preset course," she said. In a separate speech, Mario Draghi, head of the European Central Bank, said the ECB was prepared to do more to boost the shaky recovery in the 18 nations that use the euro. But he said governments must coordinate efforts to reduce persistently high unemployment. The ECB has cut rates and offered cheap loans to banks and is considering asset purchases to pump more money into Europe's economy. Draghi told the Jackson Hole conference that "we stand ready to adjust our policy stance further" if needed. But he offered no guidance on when such help might come. In her keynote address, Yellen suggested that pay gains for U.S. workers, which have been sluggish since the recession ended five years ago, could rise faster without necessarily igniting inflation. John Silvia, chief economist at Wells Fargo, said Yellen's remarks confirmed his view that the Fed's first rate increase will occur next June. "Yellen still wants more time to evaluate the data," he said. Silvia also said the speech hints that the Fed is "willing to take a little more inflation to achieve their labor market goals." If inflation were to top the Fed's target of 2 percent, "I don't think they're going to panic." This year's conference drew a pocket of demonstrators who shadowed Yellen and the other participants in the lobby of the lodge as they entered and left the invitation-only gathering. They sported green T-shirts and carried placards with the question, "What recovery?" Related to this year's conference theme of "Re-evaluating Labor Market Dynamics," Yellen's speech addressed the difficulty the Fed faces in trying to determine the relative health of the job market given the damage caused by the 2007-2009 recession. Paul Dales, senior U.S. economist at Capital Economics, wrote in a research note that "despite the faster-than-expected decline in the unemployment rate, Yellen does not appear to have changed her view that there is still 'significant' slack in the labor market." Yellen's comments came two days after release of the minutes of the Fed's July 29-30 meeting. The minutes showed that officials engaged in an intensifying debate over whether to raise rates sooner than expected if the economy keeps strengthening. Some officials, the minutes said, thought the Fed would need "to call for a relatively prompt move" to begin raising short-term rates from record lows, where it has kept them since the financial crisis struck in 2008. Otherwise, they felt the Fed risked overshooting its targets for unemployment and inflation. In the end, the Fed made no changes at the July meeting. It approved, 9-1, maintaining its current stance on rates. But the minutes pointed to a distinct division among officials over the timing of an increase. That debate continued at Jackson Hole, with Fed officials expressing clashing views during a series of TV interviews. Charles Plosser, president of the Fed's Philadelphia regional bank, said he was uncomfortable with the Fed's policy statement that it expects to keep its key short-term rate unchanged for a "considerable time" after its bond purchases end. Plosser cast the lone dissenting vote at the July meeting. Dennis Lockhart, president of the Atlanta Fed, said in a CNBC interview Friday that he was "holding to the mid-2015" time period for the first rate hike but said this view could change if the economic data strengthens. Nicholas Colas, chief market strategist at the investment firm ConvergEx, said Yellen's speech did nothing to change his expectation that the Fed will begin to raise rates in the second quarter of 2015. "Janet Yellen is maintaining as much space for herself for policy flexibility as she possibly can," Colas said. "She's underlining how complex this is." 
Ric Francis/AP DETROIT -- Ford Motor Co. (F) has agreed to government demands to expand a driver's side air bag inflator recall to the entire U.S. The move announced Thursday adds 447,000 Ford vehicles to the list of those recalled due to driver's inflators made by Japan's Takata Corp. The inflators can explode with too much force, spewing shrapnel into drivers and passengers. Ford's action puts pressure on BMW and Chrysler, the only two automakers that haven't agreed to national recalls. The National Highway Traffic Safety Administration made the demand of five automakers, saying the inflators are dangerous. Honda and Mazda already took their recalls national. Previously the recalls were limited to high-humidity states mainly along the Gulf Coast. The Ford national recall covers certain 2005 to 2008 Mustangs and 2005 and 2006 GT sports cars. The company also announced it would recall the same cars in Canada, Mexico and a few other countries. Thursday's announcement brings to just over 502,000 the number of Ford vehicles under recall for Takata driver's side air bags. The company said in a statement that it's aware of one accident with an injury that could be linked to the air bags. Dealers will replace the inflators at no cost to customers. Last month, NHTSA demanded that Takata and the five automakers recall driver's inflators across the nation. Takata and Chrysler have refused and could face legal action. BMW says it's still evaluating the demand. Expanded Recall Takata took out full-page advertisements in several newspapers including the Detroit Free Press on Thursday saying that it will work with NHTSA and automakers to expand the recalls by increasing production capacity for replacement air bags. The company said it's exploring whether other companies' air bags can be used in replacement kits. But in documents filed with NHTSA, Takata refused to do a national recall, saying it's not supported by testing data. The company also said NHTSA didn't have the authority to order a parts supplier to do a recall. The safety agency has threatened legal action if Takata and the remaining automakers don't comply with its demand. NHTSA has said the inflator propellant, ammonium nitrate, can burn faster than designed if exposed to prolonged airborne moisture. That can cause it to blow apart a metal canister meant to contain the explosion. The safety agency says there's no data to support a nationwide passenger air bag recall, which so far has been held to the high-humidity states. In total, 10 automakers have models with Takata air bags, which have been blamed for at least five deaths and multiple injuries worldwide. So far, automakers have recalled about 12 million vehicles in the U.S. and about 19 million globally for similar problems. U.S. recalls previously had been limited to Florida, Hawaii, Puerto Rico and the U.S. Virgin Islands. But recently, under pressure from NHTSA, automakers have expanded them to include Saipan, Guam, American Samoa as well as Alabama, Georgia, Hawaii, Louisiana, Mississippi and Texas -- all areas with average annual dew points of 60 degrees or higher. The dew point is the temperature at which moisture condenses out of the air. 
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Horizon International Images Limited / Alamy There is a lot of money -- billions of dollars worth -- hidden in cans, sock drawers, and boxes full of vacation photos. Money that if stumbled upon, most Americans would see as worthless due to the date on the calendar, and their current location. But enterprising people are going to find a way to collect these forgotten souvenirs and turn them into cash. One of them might be you, so let me fill you in on the details of how. In 2002, the euro replaced the sovereign notes and coins of 18 European Union states. After a short transition, marks, francs, lire, pesetas, guilders and other currencies were no longer accepted as legal tender. But let me let you in on a secret: Some of those bank notes and coins can still be converted into money you can spend. Austria, Belgium, Estonia, Germany, Ireland, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia and Spain will still convert their former currencies into euros without any fees. The Bundesbank -- the central bank for Germany, the biggest of these economies -- estimates that there are $13.31 billion in Deutsche Marks ($8.9 billion in U.S. dollars) in circulation. It they will convert any post-1948 Deutsche Marks to euros, for anyone, at a fixed rate of 1.96 DM per euro (the rate at the time of the 2002 switchover). You can even exchange your Deutsche Marks by mail. On the Trail of the Missing Cash Where are all those Deutsche Marks, and the rest of those pre-euro bills and coins? Though there are no studies nor hard evidence to prove it, my gut tells me that most likely the vast majority of that cash is in the United States. The provisions for the euro transition were established by the Maastricht Treaty in 1992, which meant that Europeans had 10 years before the conversion to adjust to the idea their native currencies would at some point no longer be welcome at the corner grocery store. In fact, those nations spent hundreds of millions of dollars in 2002 to education their populations about the need to exchange local currencies for euros. Common sense says that those people would have been the most aggressive in exchanging their money. They'd have had the most notice, the most convenient methods for conversion, and the most motivation. But even if you were to estimate that half the missing Marks are still in Europe, that leaves $4.23 billion still left unaccounted for. Outside of Europe, the United States is by far the largest source of tourism to Germany. In addition, it has the largest number of residents with German heritage outside of Germany, not to mention the largest foreign military presence in Germany. All those family members, servicemen and tourists were traveling to and from Germany, each time bringing back unspent pieces of that $4.23 billion. Even if 25 percent of those unspent travellers' Deutsche Marks went home with visitors from Asia and South America, you still end up with $3.23 billion somewhere in the U.S. It Takes a Village This begs the question of how to both find and gather this and other "obsolete" eurozone money, which is doubtless held in small amounts among millions of people, into large enough quantities to be profitable. And there is the rub. It is almost inconceivable to think that an individual could create a business that would be able to round up any serious fraction of that lost currency profitably. But, by using already established local and a national organizations, a lot of it might be able to find its way into charitable organizations. What if your local church, synagogue, school district, Kiwanis club or other charitable organization began a foreign money drive? Members could be encouraged to dig out those coins and bills, which are of virtually no value to them, and then using this "currency alchemy," create a windfall for a good cause. As of now, Portugal's redemption program is set to end in 2022 and the Netherlands' in 2032. Germany and the other European states listed above have stated that their redemption periods are "indefinite," but all have the right to end them without notice. If that happens, then those billions of dollars' worth of unaccounted for foreign currency will be worthless. The clock is ticking. More from Brian Lund
Reuters 