BlackRock Inc. wants more time from the Federal Deposit Insurance Corp. before it imposes new oversight of stakes in U.S. banks.
Company officials want to delay negotiations into President-elect Donald Trump’s next administration.
BlackRock faced a Friday deadline to sign an agreement with the FDIC, the federal agency that insures deposits and regulates financial institutions.
In a letter to the agency, the company asked for an extension until March 31. It noted that the company had two weeks to review a proposed agreement that it says risks hurting its ability to serve clients, according to a Bloomberg report.
“We are not aware of any imminent or ongoing issues that would warrant hastening the finalization of a completely new regulatory framework in a two-week period,” wrote Ben Tecmire, BlackRock’s U.S. regulatory affairs boss.
BlackRock opposed FDIC efforts to keep large asset managers from influencing banks in which they have stakes. The company said that the plan would make it more costly for banks to raise money and could create economic havoc.
Ike Brannon, a senior fellow at the Jack Kemp Foundation, called the FDIC’s efforts the “latest example of a bureaucracy more preoccupied with internecine turf battles than actually doing its job.”
Mick Mulvaney, former acting director of the Consumer Financial Protection Bureau under Trump, compared it to a “mafia protection racket” in an op-ed published in The Hill last October.
Karen Kerrigan, president & CEO of the Small Business and Entrepreneurship Council, and Raymond Keating, the group’s chief economist, said the FDIC’s efforts could hurt small businesses.
“Targeting banks and large investors means that smaller banks will feel the effects, such as fewer investors and investment dollars, and therefore, a less robust financial sector that helps to fund business startups, investment and innovation,” they wrote. “For good measure, the increased costs and delays for index funds would negatively affect returns for investors.”
FDIC board members Jonathan McKernan and Rohit Chopra, director of the Consumer Financial Protection Bureau, have sought more oversight of the index fund giants. They say that their size and concentrated ownership could give firms undue influence over the management and strategy of U.S. banks, Bloomberg reported.
