There is bipartisan agreement in the Senate that Fannie Mae and Freddie Mac are "too big to fail" but some lawmakers are skeptical that a SIFI designation is appropriate.
Options include legislation to study the risk of leveraged loans, more aggressive action by the Financial Stability Oversight Council and additional capital buffers. Policymakers may also choose to do nothing.
Although higher corporate debt could hurt the economy, Federal Reserve Chair Jerome Powell argued changes made since the last crisis will guard against a meltdown.
The ranking Democrat on the Senate Banking Committee says he wants answers from the Financial Stability Oversight Council on efforts to address corporate debt risks.
The Financial Stability Oversight Council is shifting away from designating specific nonbanks and moving toward identifying activities that threaten the whole system. But some say that approach just weakens the council.
A bipartisan group of senators is proposing legislation to require the Financial Stability Oversight Council to weigh alternatives before putting a large, complex nonbank under Federal Reserve supervision.
The 2020 budget would add the Consumer Financial Protection Bureau and FSOC to congressional appropriations, charge lenders for FHA upgrades and require universities to have skin in the game on student loans.
