The Financial Stability Oversight Council (FSOC) determined that “material financial distress” at MetLife, Inc., could “pose a threat to the financial stability of the United States.” The quoted phrases appear in the Dodd-Frank Act, 12 U.S.C. § 5323(a)(1), and were formally defined by the FSOC years before MetLife’s designation. During the MetLife designation process, however, officials at the FSOC ignored or abandoned two of its definitions of “material financial distress.”

CASE QUESTIONS

1. Should Congress itself define key terms in the laws it enacts, or should Congress have the discretion to delegate the definition of key terms to administrative agencies?

2. In your opinion, were the actions of the FSOC in this case consistent with the concept of rule of law?