USACreated on July 21, 2010 under Title I (the Financial Stability Act of 2010) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), the Financial Stability Oversight Council (FSOC) was created to:• Identify risks to US financial stability that could arise from the material financial distress or failure, or ongoing activities of large interconnected bank holding companies (bank holding company) (BHCs) or non-bank financial companies.• Promote market discipline by eliminating expectations of stockholders, creditors and counterparties that the federal government will shield them from losses in the event of the failure of these large interconnected BHCs or non-bank financial companies.• Respond to emerging threats to the stability of the US financial system.The FSOC consists of 15 members: ten voting and five non-voting. The ten voting members are the Treasury Secretary (as Chairperson of the FSOC), an insurance expert appointed by the President and confirmed by the US Senate plus the heads of the:• Federal Housing Finance Agency (FHFA).• National Credit Union Administration.The five non-voting members of the FSOC are:• A state insurance regulator chosen based on a selection process determined by state insurance regulators.• A state banking supervisor chosen based on a selection process determined by state banking supervisors.• A state securities commissioner chosen based on a selection process determined by state securities commissioners.For more information on the FSOC and the Dodd-Frank Act generally, see Articles, Summary of the Dodd-Frank Act: Regulatory Structure (www.practicallaw.com/4-502-7974) and Road Map to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (www.practicallaw.com/3-502-8479).
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.