Citing the FSOC's recent annual report, securities analysts also note that the FSOC is taking a hard look at mortgage servicers and mortgage REITs for possible SIFI designation.

The FSOC already has designated three non-banks—American International Group, General Electric Capital Corp. and Prudential Financial, Inc. — as SIFIs.

In his letter, Garrett asks Dudley that the NYFed provide him with "any document, research report, chart or other material that you or FedNY staff have presented to members or staff of the FSOC, or any of its member agencies, or the Financial Stability Board, or any of its members, or other personnel, in relation to the potential designation of firms as SIFIs."

Garrett's request is consistent with legislation reported out by the House Financial Services Committee (FSC) June 20 that would effectively shut down the operations of the Federal Stability Oversight Council (FSOC) for at least the next year.

One bill, H.R. 4881, would bar the FSOC from designating any financial institution as systemically significant for a year.

The other bill, H.R. 4387, would allow all members of the commissions and boards represented on the FSOC—such as the Securities and Exchange Commission, the Federal Reserve, the Commodity Futures Trading Commission, and the National Credit Union Administration—to attend and participate in the FSOC's meetings.

The bills' immediate impact would likely be on the designation of MetLife as a systemically significant financial institution, or SIFI. MetLife is in Stage III or the final stage, of the SIFI designation process. MetLife has been lobbying against designation as a SIFI for more than a year, and the FSOC has responded by slowing its decision-making process on MetLife to ensure it has all its ducks in a row before making a decision.

In introducing the second bill, Garrett said, "The council meets in secret, refuses to disclose substantive transcripts, and blocks any requests by other regulators or Members of Congress for a more open and transparent process." In April, Garrett was denied access to an FSOC meeting.

The bill was reported out by the House FSC along party lines. During debate on the measure, Rep. Maxine Waters, D-Calif., ranking minority member of the House FSC, said, "We are not dealing with a good faith effort to address many of the transparency concerns a bipartisan group of members has raised. Rather, this is an effort by Republicans to make the FSOC decision-making impossibly difficult."  

In his letter, Garrett acknowledged "it is understandable" that the Federal Reserve Board may rely on information from individual Fed banks in assessing companies located in their districts or overseen by those banks. "However, considering the lack of disclosure and general air of secrecy surrounding FSOC designations, and the tremendous stakes involved, it is imperative that we understand the role your bank has played in these decisions," Garrett added.