This Article examines a relatively recent addition to the institutional architecture of financial regulation in the United States: the Financial Stability Oversight Council (FSOC). In particular, it draws attention to a flaw in the design of the FSOC’s power to designate nonbank financial companies as “systemically important” financial institutions, commonly known as “SIFIs.” Specifically, the Article argues that the binary nature of the designation power has underappreciated costs, which hinder the FSOC’s stability goals.