#Metlife ’s escape of ‘too big to fail’ label is defeat for #Obama administration

 A federal judge on Wednesday delivered a significant setback to the Obama administration’s efforts to rein in the financial sector and prevent a repeat of the conditions that caused the 2008 financial crisis.

In 2014, a government panel run by Treasury Secretary Jack Lew determined that MetLife should come under stricter federal scrutiny, essentially calling the nation’s largest life insurance company “too big to fail.” With that designation, MetLife would be forced to set aside a bigger financial cushion and put in place other safeguards to protect taxpayers if it fell into financial trouble.

MetLife sued, arguing that the new rules would force it to raise prices, and on Wednesday, U.S. District Judge Rosemary M. Collyer sided with the New York-based firm. Collyer did not explain her decision in the two-page ruling.

“From the beginning, MetLife has said that its business model does not pose a threat to the financial stability of the United States,” Steven A. Kandarian, MetLife’s chairman and chief executive, said in a statement. “This decision is a win for MetLife’s customers, employees and shareholders.”

MetLife, which was founded in 1868, has a global footprint, 100 million customers and a market capitalization of $48 billion. The company’s stock rose 5 percent Wednesday to close at $45 a share.

The ruling comes at a time when the Obama administration is struggling to put in place the final portions of the massive 2010 financial reform package, the Dodd-Frank Act. That effort has come under greater scrutiny recently as Democratic presidential candidate Bernie Sanders has called for the breakup of large financial institutions.

This defeat could also give ammunition to Republicans in Congress who have argued that Dodd-Frank goes too far. The act “ominously grants the Federal Reserve near de facto management authority over such institutions, thus allowing huge swaths of the economy to potentially be controlled by the federal government,” Rep. Jeb Hensarling (R-Tex.), chairman of the Financial Services Committee, said in a statement.

Washingtonpost.com