In late June, the FSOC voted unanimously (with one member abstaining) to rescind GE Capital’s SIFI designation. GE Capital was designated in July 2013. According to the Council’s public explanation of the rescission, at that time, GE Capital’s assets made it one of the largest financial services firms in the United States. In addition, the company “was also a significant source of credit to the U.S. economy, providing financing to more than 243,000 commercial customers, 201,000 small businesses through retail programs, and 57 million consumers in the United States.”
In the wake of GE Capital’s designation, the company “fundamentally” altered its business, “making it a much less significant participant in financial markets and the economy.” As a result, the FSOC determined to rescind the designation. In a statement regarding the rescission, Treasury Secretary Jacob Lew stated, “Today’s decision clearly demonstrates that the Council’s designation of nonbank financial companies is a two-way process. The Council will remove a designation when that company no longer poses risks to U.S. financial stability. The Council follows the facts: When it identifies a company that could threaten financial stability, it acts; when those risks change, the Council also acts.”
Dodd-Frank requires the FSOC to review SIFI designations annually. A vote to rescind a designation requires a two-thirds vote of the FSOC, including an affirmative vote by the chair.