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February 5, 2024

Key Topics for Treasury Secretary Yellen’s Testimony and Annual Report to Congress on FSOC

WASHINGTON, D.C.— Dennis Kelleher, Co-founder, President and CEO, issued the following statement in connection with the release of a Fact Sheet on “Key Topics for FSOC Annual Report to Congress” ahead of a House Financial Services Committee hearing on the Annual Report of the Financial Stability Oversight Council (FSOC).  Janet Yellen, Chairperson of the Financial Stability Oversight Council, will be a witness at the hearing.

“The Financial Stability Oversight Council (FSOC) was one of the most important reforms of the Dodd-Frank Act. The FSOC was designed to reduce the threats from the unregulated shadow banking system, level the playing field between systemically significant banks and nonbanks, minimize regulatory arbitrage, identify and address new emerging financial risks, and help prevent financial crashes. Despite these critical functions FSOC was intended to have, the Trump Administration gutted its authority, resulting in the FSOC being AWOL.

“Correcting that, the Biden Administration in November 2023 released updated guidance reinstating the FSOC’s authority to require supervision and regulation of systematically important nonbank financial companies. These changes will allow the FSOC to address this key gap in the regulatory environment and ensure the FSOC’s authority is consistent with Congressional intent.

“However, this is just an important first step and the FSOC must now act to protect the American people from systemically significant nonbanks. For example, the FSOC’s annual report detailed how hedge funds and nonbank mortgage servicing companies have grown considerably since 2018. Despite this and the dramatic growth in size and risk of other nonbanks and nonbank activities, there is not one single nonbank financial institutions in the US that has been designated as systemically significant the FSOC. It is therefore critical that the FSOC work thoroughly but quickly to identify those nonbanks and activities that pose a threat to financial stability.”

The Fact Sheet is available here.


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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