According to an industry lawyer, the hearings would be private oral hearings, not public.

The lawyer explains, “Part of our point is that even identification of a company's name that is under SIFI consideration might bring adverse consequences.”

Richard M. Whiting, executive director & general counsel for the Financial Services Roundtable, says in the FSR letter that, “we believe the FSOC should exercise its statutory discretion to grant oral hearings to any nonbank financial company that requests one.”

Whiting says, “An oral hearing is crucial to ensuring that a company knows why it is being considered for potential designation and enabling it to effectively respond.”

Stef Zielezienski, general counsel for the American Insurance Association, asks in his comment letter for the FSOC to “revisit” its hearing procedures in order provide nonbank financial companies the opportunity to have an oral hearing, if requested.

He also asks that the FSOC provide nonbanks such as insurers the authority to obtain discovery of relevant material upon which the FSOC is basing its proposed determination. Zielezienski also asks for ability to present witnesses and examine FSOC staff regarding the basis for the proposed determination that the company should be supervised by the Federal Reserve Board.

The FSOC will determine whether a non-bank is systemically significant under a provision of DFA which gives it that authority.

The criteria the FSOC must use in determining whether an institution is SIFI is whether material financial distress at the nonbank financial company could pose a threat to the financial stability of the U.S., and, if so, whether the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the nonbank financial company could pose a threat to U.S. financial stability.