Overview
Title
Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Financial Stability Oversight Council related to Guidance on Nonbank Financial Company Determinations.
ELI5 AI
The bill is about Congress wanting to stop a new rule that tells certain financial companies, that are not banks, how they should be checked or controlled. They don't like the rule and if the bill passes, it means the rule won't be used anymore.
Summary AI
H. J. RES. 120 is a resolution in the 118th Congress that aims to revoke a specific rule created by the Financial Stability Oversight Council. The rule in question is related to "Guidance on Nonbank Financial Company Determinations" and was published on November 17, 2023. The resolution indicates that Congress disapproves of this rule and, if passed, the rule would have no legal effect. The resolution was introduced in the House of Representatives and referred to the Committee on Financial Services.
Published
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AnalysisAI
Overview of the Bill
H. J. Res. 120 is a joint resolution introduced to the 118th Congress, which proposes congressional disapproval of a rule submitted by the Financial Stability Oversight Council. This specific rule concerns guidelines on determining the designation of nonbank financial companies. By disapproving the rule, Congress intends for the rule to have no force or effect.
Summary of Significant Issues
Several significant issues arise from this resolution:
Lack of Alternative Guidance: The resolution does not suggest any replacement or alternative regulations to fill the gap left by disapproving this rule. This raises concerns about the regulatory landscape for nonbank financial companies, which could lead to confusion or inconsistency in how these companies are monitored or regulated.
Absence of Explanation: There is no explicit rationale provided for why this specific rule is being disapproved. The absence of such an explanation might lead to ambiguity and potential controversy over the decision's motivation, impacting transparency and accountability in the legislative process.
Reference to External Documents: The resolution references an external document (88 Fed. Reg. 80110). Those looking to fully understand the implications would need to seek out and review this document, which could be inconvenient and pose a barrier to public engagement and understanding.
Implications of Rule Disapproval: The potential consequences of the rule's disapproval are not discussed. Understanding the financial or legal ramifications is crucial for stakeholders directly affected by these changes.
Complex Language: The formal and complex language used in the bill text may make it difficult for individuals without a legal background to comprehend the legislation fully. This could limit public awareness and understanding of its implications.
Impact on the Public
For the general public, the disapproval of this rule may seem distant, as the content is specialized in financial oversight. However, the effects could ripple outwards, impacting financial stability and economic policy. Nonbank financial companies, which include entities like insurance companies and hedge funds, play substantial roles in the economy. Their regulation—or lack thereof—can have wide-reaching effects.
Impact on Stakeholders
Positive Impacts
- Nonbank Financial Companies: These entities might see a reprieve from additional regulations, potentially reducing compliance costs and operational burdens.
Negative Impacts
Financial Watchdogs and Oversight Bodies: Such entities may find their efforts to maintain financial stability hampered by the absence of clear guidelines. This can increase risks in the financial sector due to possibly inadequate supervision of nonbank financial activities.
Regulatory Uncertainty: This disapproval might lead to uncertainty and lack of clarity for financial companies concerning compliance and operational responsibilities.
Public Trust: Without clarity on why this rule is disapproved or what will replace it, public trust in the financial regulatory framework and legislative actions might be impacted negatively due to perceived opacity or indecision.
In conclusion, while the immediate effects of this resolution may seem focused on legislative and regulatory domains, its broader implications could influence economic stability and transparency in financial oversight, affecting stakeholders ranging from individual consumers to large financial institutions.
Issues
The section does not specify any alternative guidance or rules that should replace the disapproved rule, leaving uncertainty about the regulatory landscape. This is particularly significant from a legal and financial perspective as it affects nonbank financial companies and how they operate. [Section 1]
There is no clear explanation as to why the rule is being disapproved, which could lead to ambiguity and controversies over the motivations behind the disapproval. This is important for political transparency and accountability. [Section 1]
The reference to an external document (88 Fed. Reg. 80110) requires readers to access additional materials to understand the full context. This can pose a barrier for those seeking to understand the legislation, impacting political and public engagement. [Section 1]
Potential implications of the rule having no force or effect are not discussed, leaving uncertainty about the consequences. This could have significant financial and legal ramifications. [Section 1]
The language is very formal and might be complex for a general audience to understand without a legal background, potentially affecting public awareness and understanding. [Section 1]
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
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Summary AI
Congress is rejecting a rule from the Financial Stability Oversight Council about "Guidance on Nonbank Financial Company Determinations," which means this rule will not be enforced.