Among the comments submitted (12 posted as of 2016 Dec 15, 11-07 AM) to the FDIC in response to its notice of proposed rulemaking ("NOPR"),1 were at least 4 commenters who identified issues concerning the authority of the regulatory agency to even make some of the proposals contained in the NOPR, e.g., see excerpts from several commenters below:
“Proposed Rule would inappropriately bypass the legislative process to override the specific and carefully-planned statutory framework established by Congress in the U.S. Bankruptcy Code and FDIA”
“may amount to an unconstitutional delegation of legislative authority”
“imposition of a separate contractual cross-default prohibition could interfere with operation of the statutory intent regarding application of the Title II stay”
“As a practical matter, it is not even clear that a U.S. regulator or receiver would be allowed to have input into a state or foreign proceeding or have the ability to ensure fair treatment of the non-defaulting counterparties”
“would require [members] to relinquish contractual rights in the absence of a law or regulation mandating such relinquishment”
“This end-run is done by requiring ... companies with which they do business to sign contracts giving ... these special rights”
“in the U.S., Congress alone has the authority to enact U.S. bankruptcy legislation”
“the FDIC is using proposed §382.4 to alter fundamentally the effect of the U.S. Bankruptcy Code, rather than seeking to have Congress enact necessary statutory amendments”
“Regulators intend to require end-users facing U.S. SIFIs to agree to broad stays of their Cross-Default Rights, even where Congress has not enacted legislation imposing such stays”
“The fact that certain U.S. regulators are members of the FSB does not equate to a mandate from Congress to implement FSB policies without the protections afforded by the U.S. legislative framework”
“the U.S. Regulators’ Cross-Default Stay Initiative circumvents the U.S. legislative process by effectively imposing key aspects of OLA in relation to U.S. ordinary bankruptcy proceedings, contrary to congressional intent”
“the FDIC should stop short of compelling Covered Banks from refusing to trade with government plans that have not agreed to such amendments”
1 Federal Deposit Insurance Corporation, Restrictions on Qualified Financial Contracts of Certain FDIC-Supervised Institutions; Revisions to the Definition of Qualifying Master Netting Agreement and Related Definitions, 81 Fed. Reg. 74326 (Oct. 26, 2016)(Notice of Proposed Rulemaking), avail. at https://www.gpo.gov/fdsys/pkg/FR-2016-10-26/pdf/2016-25605.pdf .