The Financial Stability Oversight Council (FSOC) met today, receiving an update from Treasury’s Mortgage Foreclosure Task Force and approving an ANPR on the criteria for designating systemically important financial market utilities (FMUs) under Title VIII of the Dodd-Frank Act (see FSM Report PAYMENT11).  Treasury Assistant Secretary Michael Barr said that the foreclosure task force has found widespread and “inexcusable” breakdowns in basic controls; he will report back to the FSOC at its January meeting with the task force’s initial findings, with regulators on track to conclude their review by the end of December (see Client Report MORTGAGE97).

The FMU ANPR is preliminary, containing ten questions on criteria to assess FMUs and excluding for now consideration of payment, settlement and clearing systems in the banking arena.  However, comments will be due thirty days from publication, reflecting CFTC Chairman Gensler’s deadline for FMU designation by the summer of 2011.  FedFin will shortly provide clients with an in-depth assessment of this ANPR.  No action was taken on designation of systemic nonbanks (see FSM Report SYSTEMIC34), although the FSOC is set to take this up again in January.  Final rules for derivatives oversight should be completed by the middle of next year, with FSOC continuing to work on Orderly Liquidation Authority (see FSM Report RESOLVE) and new mortgage and credit-card disclosures. This report analyzes today’s session.

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