WASHINGTON -- Already facing criticism for its new plans to scrutinize the mutual fund industry, the Financial Stability Oversight Council was characterized as an enigmatic interagency body that has not provided enough rationale for designating certain financial firms as a threat to the economy.

During a marathon four-hour hearing by the Republican leadership of the House Financial Services Committee on Dec. 8, eight of the 10 voting members of the council - minus its leader, Treasury Secretary Jack Lew, and Federal Reserve Chairwoman Janet Yellen - found themselves on the defensive that they were keeping lawmakers and the public in the dark about their activities, which now includes scrutinizing mutual funds for systemic risks.

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