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November 3, 2023

We Applaud the FSOC’s Decision to Reinstate Authority to End Systemic Threats from Nonbanks; Now It Must Act to Actually End Them

WASHINGTON, D.C.— Dennis M. Kelleher, Co-founder, President, and CEO of Better Markets, issued the following statement in response to decisions announced today by the Financial Stability Oversight Council (FSOC) to finalize a rule that reinstates its authority to require supervision and regulation of systemically important nonbank financial companies and establishes an analytic framework to guide the process:

“JPMorgan Chase’s CEO Jamie Dimon is right: when systemically important banks are regulated, systemically important nonbanks are “dancing in the streets.” That’s because the FSOC has been AWOL, resulting in an unlevel and unfair playing field because systemically important nonbanks have not been regulated like systemically important banks. However, the solution is not, as Jamie Dimon seems to suggest, that banks should be under-regulated; the solution is for nonbanks to be properly regulated, as I have said before along with the President of the American Bankers Association (ABA), and that is why the FSOC’s action today is so important.

“We applaud today’s action by the FSOC to revitalize its designation authority for systemically important nonbanks and create a framework for nonbank risk evaluation. These actions restore the FSOC’s vitally important mission and mandate: stop the unseen and unregulated buildup of systemic threats from nonbanks and stop the regulatory arbitrage that results from risk migrating from the regulated banking system to the unregulated nonbanking system. In blatant violation of the letter and spirit of the law, the Trump administration had crippled the FSOC and dangerously deregulated systemically important nonbanks to the point where today there is not one single designated and properly regulated systemically important nonbank or activity in the United States.

“Today’s actions are an important step to better protect Main Street families, small businesses, and the entire financial system from the risky activities of nonbanks, but it is only a first step. The FSOC must immediately take action to resume reviewing nonbanks to determine those that are systemically important and designate them for the appropriate level of regulation. Only that will end the threat to our financial system and level the playing field between systemically important banks and nonbanks, as intended by the Dodd-Frank Act and as hoped for by Jamie Dimon. The devastation caused by the 2008 Crash and the COVID-19 pandemic clearly shows what is at stake: nonbanks that provide bank-like products and present many of the same risks as banks must be subject to appropriate supervision, regulation, and oversight. Over the years, the FSOC has proven that it is deliberate, thoughtful, and careful with this work, as the previous designation and de-designation of GE Capital proves.

“As described in its latest Annual Report, the FSOC recently restarted the Hedge Fund Working Group and Nonbank Mortgage Servicing Task Force to understand and monitor two places, among many, where nonbank risks have originated. We urge the FSOC’s members to act expeditiously and efficiently to respond to these and other systemically important nonbank entities or activities that threaten financial stability.”


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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