MetLife seeks new delay in ‘too big to fail’ case to wait for Trump
July 6, 2017 by Lisa Lambert
MetLife Inc (MET.N) on Thursday asked for another delay in the long-running case over whether the U.S. government should have labeled it as “too big to fail,” warning that the Trump administration may want to withdraw the government’s appeal.
A U.S. Appeals court in May granted a 60-day abeyance in the appeal filed by the administration of Democratic former President Barack Obama. The pause ends next week.
Last year a U.S. district judge invalidated the government’s designation of MetLife as “systemically important,” a label signifying MetLife could devastate the financial system if it failed and triggering stricter oversight. The Obama administration immediately appealed, and a panel of three judges heard arguments in the case last October.
Republican President Donald Trump, however, has expressed skepticism about designations and the council of regulatory heads that assigns the labels. Both were created through the 2010 Dodd-Frank Wall Street reform law.
Given the Trump administration’s drive to strip down regulation and its criticism of Dodd-Frank, many expect it to change the government’s stance in the appeal. MetLife, in its filing, said the court should wait to rule until the administration finishes its review of designations, expected in October.
“Because the forthcoming report will reflect the new administration’s assessment of agency procedures that are at the very heart of this appeal, the report may prompt the government to change its positions on one or more issues in this appeal or to abandon the appeal altogether,” wrote attorney Eugene Scalia, representing the company, the largest U.S. life insurer. “At a minimum, the report may materially inform this court’s consideration of the issues on appeal.”
Since his January inauguration, Trump has rolled back regulation, creating major waves in the legal system.
In its filing, MetLife cited four cases involving the Environmental Protection Agency that were put on pause while the administration reviews related regulations.
The Labor Department sought to delay a case involving a new retirement-advice rule, which a judge denied, and the Education Department recently suspended a student-loan rule partly because of a pending lawsuit.
MetLife was designated in 2014 but is not considered systemically important during the appeal.
Dodd-Frank established labeling nonbank companies as “too big to fail” in response to the $182 billion government bailout that insurer American International Group (AIG.N) received during the 2008 financial crisis. AIG and Prudential Insurance (PRU.N) are also labeled systemically important.
(Reporting by Lisa Lambert; Editing by Cynthia Osterman)
