Help us improve in just 2 minutes—share your thoughts in our reader survey.

Financial Stability Oversight Council

From Ballotpedia
Revision as of 18:32, 12 June 2025 by Julian Moreno (contribs) (→‎Membership)
(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to: navigation, search
Policypedia Finance Final.png
Financial regulation in the United States
Dodd-Frank Act
Federal Reserve
Financial regulation by state
Public Policy Logo-one line.png
Key terms
Commercial bank • Credit union • Depository institution • Financial system • Investment banking • Securities
Hover over the above
terms for definitions.

The Financial Stability Oversight Council (FSOC) is an organization established under the Dodd-Frank Wall Street Reform and Consumer Protection Act to monitor and respond to risks to the United States' financial system. The nation's financial system is a complex network of banks and investment firms that facilitates exchanges between lenders and borrowers; it is the base for all economic activity in the nation. The FSOC was formed in on July 21, 2010, when President Barack Obama (D) signed the Dodd-Frank Act into law.[1]

The council was created to identify risks to U.S. financial stability both within and outside of the financial services marketplace and to respond to threats to the U.S. financial system. The FSOC also aims to “promote market discipline, by eliminating expectations […] that the government will shield [financial institutions] from losses in the event of failure."[1]

HIGHLIGHTS
  • The Financial Stability Oversight Council is tasked with monitoring and responding to threats to the United States financial system.
  • The Dodd-Frank Act gave the FSOC broad authority to accomplish its tasks. The FSOC may make recommendations to other regulatory bodies regarding financial institutions, and the regulatory bodies are obligated to implement these recommendations.
  • The FSOC is a 15-member council, 10 of whom are voting members. Most positions on the council are appointed by the president.

    • The FSOC's operating budget comes from the Financial Research Fund, which also funds the Office of Financial Research.[2]

    Organization

    Administrative State
    Administrative State Icon Gold.png
    Read more about the administrative state on Ballotpedia.

    The FSOC is made up of 15 members and is chaired by the Secretary of the Treasury. Ten of these members are voting members. Five non-voting members serve the council in an advisory capacity. Non-voting members are included in all of the proceedings, meetings, and deliberations of the FSOC, unless the chairperson of the FSOC deems it necessary to exclude them for confidentiality.[3]

    The ten voting members are selected as follows:[3]

    • Nine are on the council by virtue of their position in another organization.
      • Eight of these nine members are appointed to their primary positions by the president; the ninth is appointed to his or her primary position by the treasury secretary.
    • One member is an independent member with insurance experience directly appointed by the president, with the advice and consent of the United States Senate.

    Voting members serve various terms depending on their positions. The chair of the council, the treasury secretary, may be removed at any time.[3]

    The five non-voting members serve two-year terms and are selected as follows:[3]

    • Two are on the council by virtue of their position in another agency.
    • One is a state insurance commissioner designated by a selection process determined by the state insurance commissioners.
    • One is a state banking supervisor designated by a selection process determined by the state banking supervisors
    • One is a state securities commissioner designated by a selection process determined by state security commissioners.

    The council may also appoint special advisory, technical, or professional committees within the FSOC.[1]

    According to the Treasury Department, the following agencies are member agencies of the FSOC:[4]

    • Board of Governors of the Federal Reserve System
    • Commodity Futures Trading Commission
    • Federal Deposit Insurance Corporation
    • Federal Housing Finance Agency
    • National Credit Union Administration
    • Office of the Comptroller of the Currency
    • Securities and Exchange Commission
    • Treasury Department
    • Consumer Financial Protection Bureau

    Membership

    The table below lists the members of the FSOC as of June 2025:

    FSOC voting members, June 2025
    Position Current member Term
    Secretary of the Treasury Scott Bessent N/A
    Chairman of the Board of Governors Jerome H. Powell 4 years
    Comptroller of the Currency Rodney E. Hood 5 years
    Director of the Consumer Financial Protection Bureau Scott Bessent 5 years
    Chairman of the Securities and Exchange Commission Paul S. Atkins 5 years
    Chairperson of the Federal Deposit Insurance Corporation Travis Hill 5 years
    Chairperson of the Commodities Future Trading Commission Caroline D. Pham 5 years
    Director of Federal Housing Finance Agency William J. Pulte 5 years
    Chairman of National Credit Union Administration Board Kyle S. Hauptman 6 years
    Independent member having insurance expertise Thomas E. Workman 6 years
    Source: United States Department of the Treasury
    FSOC nonvoting members, June 2025
    Position Current member
    Director of the Office of Financial Research James Martin
    State insurance commissioner Beth Dwyer
    State banking supervisor Lise Kruse
    State Securities Commissioner Melanie Senter Lubin
    Source: United States Department of the Treasury

    Authority and responsibilities

    Daniel K. Tarullo, a member of the Board of Governors of the United States Federal Reserve Board, at an Office of Financial Research and Financial Stability Oversight Council conference.

    The FSOC serves as the federal “systemic risk regulator," meaning that the agency is tasked with identifying and resolving issues with the nation's financial systems that threaten the entire financial system of the nation as a whole, such as widespread bank closures. The council has the authority to collect information from its member agencies, regulatory agencies (federal and state), and the Federal Insurance Office. In order to identify potential threats to financial stability, the council monitors the financial services marketplace as well as domestic and international financial regulations. The FSOC can also advise and make recommendations to Congress and member agencies for the purpose of enhancing the “integrity, efficiency, competitiveness, and stability of the U.S. financial markets.” The council must also make a regular report to Congress on that state of the U.S. financial system, and all voting members must affirm that the federal government is currently doing its part to maintain financial stability.[1]

    Under the powers granted by the Dodd-Frank Act, the FSOC can designate systemically important financial institutions. A systemically important financial institution is an institution whose failure the council believes will trigger a financial crisis. These institutions are sometimes referred to as being “too big to fail." The FSOC may recommend regulations designed to ensure that institutions do not fail or require assistance from the federal government in order to remain solvent. Recommendations can include requiring tighter oversight by an institution's regulatory body or requiring an institution to set aside some of its own capital to cover itself in the event of a failure. Financial regulatory bodies are obligated to implement the recommendations of the FSOC. The FSOC may also, with a two-thirds vote by the council, place non-bank financial companies or subsidiaries of international banks under the direct supervision of the Federal Reserve. The FSOC also has the ability to settle disputes among other federal agencies.[1]

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 Governement Publishing Office, "§5321. Financial Stability Oversight Council established," accessed September 16, 2016
    2. ↑ United States Department of the Treasury, "Financial Research Fund," accessed October 6, 2016
    3. ↑ 3.0 3.1 3.2 3.3 United State Department of the Treasury, "Who is on the Council?" accessed September 16, 2016
    4. ↑ United State Department of the Treasury, "FSOC Member Agencies," October 24, 2012
    v • e
    The Administrative State
    MainThe Administrative State Project Badge.png
    Pillars
    Reporting
    Laws
    Administrative Procedure Act • Antiquities Act • Civil Service Reform Act • Clayton Antitrust Act • Communications Act of 1934 • Congressional Review Act • Electronic Freedom of Information Act • Federal Food, Drug, and Cosmetic Act of 1938 • Federal Housekeeping Statute • Federal Reserve Act • Federal Trade Commission Act of 1914 • Freedom of Information Act • Government in the Sunshine Act • Independent Offices Appropriations Act of 1952 • Information Quality Act • Interstate Commerce Act • National Labor Relations Act • Paperwork Reduction Act • Pendleton Act • Privacy Act of 1974 • Regulatory Flexibility Act • REINS Act • REINS Act (Wisconsin) • Securities Act of 1933 • Securities Exchange Act of 1934 • Sherman Antitrust Act • Small Business Regulatory Enforcement Fairness Act • Truth in Regulating Act • Unfunded Mandates Reform Act
    Cases
    Abbott Laboratories v. Gardner • A.L.A. Schechter Poultry Corp. v. United States • Association of Data Processing Service Organizations v. Camp • Auer v. Robbins • Chevron v. Natural Resources Defense Council • Citizens to Preserve Overton Park v. Volpe • Federal Trade Commission (FTC) v. Standard Oil Company of California • Field v. Clark • Food and Drug Administration v. Brown and Williamson Tobacco Corporation • Humphrey's Executor v. United States • Immigration and Naturalization Service (INS) v. Chadha • J.W. Hampton Jr. & Company v. United States • Lucia v. SEC • Marshall v. Barlow's • Massachusetts v. Environmental Protection Agency • Mistretta v. United States • National Federation of Independent Business (NFIB) v. Sebelius • National Labor Relations Board v. Noel Canning Company • National Labor Relations Board v. Sears, Roebuck & Co. • Panama Refining Co. v. Ryan • Securities and Exchange Commission v. Chenery Corporation • Skidmore v. Swift & Co. • United States v. Lopez • United States v. Western Pacific Railroad Co. • Universal Camera Corporation v. National Labor Relations Board • Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council • Wayman v. Southard • Weyerhaeuser Company v. United States Fish and Wildlife Service • Whitman v. American Trucking Associations • Wickard v. Filburn • Wiener v. United States
    Terms
    Adjudication (administrative state) • Administrative judge • Administrative law • Administrative law judge • Administrative state • Arbitrary-or-capricious test • Auer deference • Barrier to entry • Bootleggers and Baptists • Chevron deference (doctrine) • Civil servant • Civil service • Code of Federal Regulations • Codify (administrative state) • Comment period • Compliance costs • Congressional Record • Coordination (administrative state) • Deference (administrative state) • Direct and indirect costs (administrative state) • Enabling statute • Ex parte communication (administrative state) • Executive agency • Federal law • Federal Register • Federalism • Final rule • Formal rulemaking • Formalism (law) • Functionalism (law) • Guidance (administrative state) • Hybrid rulemaking • Incorporation by reference • Independent federal agency • Informal rulemaking • Joint resolution of disapproval (administrative state) • Major rule • Negotiated rulemaking • Nondelegation doctrine • OIRA prompt letter • Organic statute • Pragmatism (law) • Precautionary principle • Promulgate • Proposed rule • Publication rulemaking • Regulatory budget • Regulatory capture • Regulatory dark matter • Regulatory impact analysis • Regulatory policy officer • Regulatory reform officer • Regulatory review • Rent seeking • Retrospective regulatory review • Risk assessment (administrative state) • Rulemaking • Separation of powers • Significant regulatory action • Skidmore deference • Statutory authority • Substantive law and procedural law • Sue and settle • Sunset provision • Unified Agenda of Federal Regulatory and Deregulatory Actions • United States Code • United States Statutes at Large
    Bibliography
    Agencies
    Retrieved from "https://ballotpedia.org/wiki/index.php?title=Financial_Stability_Oversight_Council&oldid=10411291"