Lew Holds Steady in FinServ Slug-fest

On Wednesday, the House FinServ Committee convened a hearing examining FSOC’s annual report (see Client Report FSOC10). As anticipated, Treasury Secretary Lew was unable to escape tough bipartisan questioning over the recent IRS targeting of conservative 501(c)(4) organizations. However, notable discussions included FSOC’s nonbank systemic designations, living wills, LIBOR alternatives, the Volcker Rule and the Basel III capital rules. Interestingly, Secretary Lew pushed back against industry concerns over pending capital charges for credit valuation adjustments, telling a sponsor of pending legislation in this area (see FSM Report CAPITAL196) that the U.S. should proceed with this requirement even if other nations do not. Questions on TBTF and housing reform yielded few specifics, as Mr. Lew frequently stressed that his top priority is implementing Dodd-Frank. This report analyzes today’s hearing.

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