House Republican Pushes Bill Requiring More Transparency and Control of FSOC
Commentary by Steven Lofchie
House Representative Scott Garrett (R-NJ) introduced H.R. 3557, a bill that would require greater transparency at the Financial Stability Oversight Council (FSOC). Among other provisions, the bill would require the FSOC to comply with a number of existing laws applicable to U.S. government agencies that promote accountability.
Representative Garrett stated that his proposed legislation would:
(i) subject FSOC to the Government in the Sunshine Act (which generally requires that meetings of an agency be subject to public observation);
(ii) subject FSOC to the Federal Advisory Committee Act (which generally governs the conduct of advisory committees to the government and which is intended to promote transparency in the conduct of such committees);
(iii) allow for the participation of all members of the regulatory commissions and boards represented on FSOC;
(iv) require that any vote taken by the principal of a commission or board represented on FSOC must first be taken by that commission or board and the representative must then in turn vote that same decision at the Council; and
(v) allow for Members of Congress on the Congressional oversight committees of FSOC to be able to attend all FSOC meetings.
Commentary
Whatever one thinks of the FSOC, the manner in which it is funded and the methods by which it operates make it a very odd beast within the government. Significantly, its funding was established so as to make the agency largely immune from Congressional funding cuts for the first years of its operation.
FSOC is a peculiarly partisan agency in that it is governed by procedures that largely assure that all or virtually all of its members come from the President's party. This is in contrast to, for example, the SEC and the CFTC, which are generally controlled by the President's party, but which have minority party membership (typically three members from the President's party and two from the other party). The great benefit of minority membership is that it provides the minority a way to publicly voice an opposing opinion, but does not enable the minority to bring the actions of the agency to a halt. Of course, the ability to publicly dissent can have significant influential power, particularly if that dissent is well-reasoned.
During the time that FSOC has been in operation, its statements as to the economy and how it should be regulated have been issued without a dissenting voice (as there is no minority membership to provide dissent). This is a shame because much of what FSOC has said should be questioned. This is not because FSOC's statements are necessarily wrong. It is simply good public policy to allow and encourage dissent from persons who see the world from different perspectives. Having representation of the minority party on FSOC would provide a means for FSOC's statements to be challenged.
This bill would provide, even if only indirectly, an opportunity for dissent from FSOC's conclusions by allowing various commissions and boards to vote as a whole on statements made by FSOC. The President's party would still "win" these votes, but the minority party would have been afforded a means to express dissent if it did not agree.