Remarks at the Financial Stability Oversight Council Meeting

Thank you, Secretary Bessent. My thanks as well to the FSOC staff for working closely and constructively with the SEC in bringing us to this point. That spirit of collaboration reflects the kind of partnership that this Council was designed to foster.

For years, I have been consistent in my skepticism of nonbank designation, and those views are well established in this forum. So, I will not belabor them in their entirety here today. Instead, I will be brief and just reinforce the point that the proposal before us is a meaningful step in the right direction. I will support it for that reason.

Now, with that said, we should be clear-eyed about the limits of this proposal. It does not—and, in my view, cannot—resolve the fundamental issues with nonbank designation, which was ill-advised and flawed from the start in the Dodd-Frank Act. Designating nonbank entities for Federal Reserve Board regulation was never the appropriate mechanism to maintain the strength or resilience of our financial system.

While only Congress can address the underlying deficiencies of this framework, that should not discourage us from continuing to refine our interpretive guidance within existing authorities. This proposal moves us in a better direction, even if it cannot correct course entirely.

With that, I want to thank the staff once again for their work on this proposal and look forward to public comment.

Thank you, Mr. Secretary.