MetLife Sues Over Too-Big-to-Fail Label By U.S. Regulators

No Access

The insurer said in the suit that the financial council “repeatedly and improperly denied MetLife access to the full record” on which its decision was based.

The SIFI tag is intended to head off financial crises by subjecting designated companies to stricter Federal Reserve oversight that could include tougher capital, leverage and liquidity requirements. Final rules haven’t been written.

FSOC should be blocked from making a determination on MetLife’s systemic risk status until those rules are completed, according to the complaint.

The suit is a blow to the council and the Treasury Department, which were wary of a legal challenge from Kandarian and took more than a year to analyze the company before voting to designate it as a SIFI.

MetLife is the first company to file such a challenge in court. Insurers American International Group Inc. and Prudential Financial Inc. were designated last year as non-bank SIFIs, as was General Electric Co.’s finance unit.

Kandarian attended a November hearing before the oversight committee to challenge the SIFI designation accompanied by Scalia, of Gibson, Dunn & Crutcher LLP, who has filed several other cases seeking to overturn regulations in the Dodd-Frank law.

The case is MetLife Inc. v. FSOC, 15-cv-00045, U.S. District Court, District of Columbia (Washington).