Let’s start with the Financial Stability Oversight Council (FSOC). Ever heard of that? It’s a new agency made up of all the federal financial regulators—the SEC, the CFTC, the Comptroller of the Currency (regulator of national banks), the FDIC (regulator of most state-chartered banks and insurer of all banks), and of course the Federal Reserve (regulator of bank holding companies and soon-to-be regulator of the entire financial system)—to name just a few.
The chairman of this body is the secretary of the Treasury. Right away, this should raise red flags. The secretary, a top officer of every administration, has now been given authority, through the FSOC, over all the financial regulators. To put this in perspective, before Dodd-Frank, Treasury and White House staffs were forbidden to contact the independent regulatory agencies about policy matters, except under special circumstances, for fear of political interference—or the appearance of political interference—in matters of regulatory policy. Under Dodd-Frank, the council is also exempt from the Federal Advisory Committee Act, so its meetings are not open to the press or public.As a practical matter that means, for a financial institution, capturing the Treasury Secretary's sympathies--and the current occupant has admitted he can't even understand his own income tax return--before any of your competitors do unto you what you'll being doing unto them if you get the power first.
Which could be the death sentence, as the FSOC, by designating any financial firm as 'systemically important' (SIFI) effectively turns it over to the government for whatever treatment is deemed necessary, including liquidation.
And, the firm doesn't really have any Fifth Amendment rights against such treatment. Unless one thinks Star Chambers are such protections;
Nor is the Treasury secretary's power under the Dodd-Frank Act limited to control over SIFIs. Anyfinancial firm is subject to seizure by the secretary if he believes that it is in danger of failure and that its failure will cause financial instability. If the firm objects, it can request a court hearing, but the hearing is secret (it's even a crime to disclose it) and the court has a single day to make a decision. If the court does not act, the secretary can seize the firm and hand it over to the FDIC for liquidation. Needless to say, once that happens, the usefulness of further appeals is vitiated.Wallison asks; 'Does this sound like America?' Unfortunately, lately, it sure does.