WASHINGTON–FDIC Board member Martin Gruenberg has issued a statement clarifying what is intended for banks in relief from the Volcker rule.
At issue is interpretation of language included in S. 2155. As CUToday.info earlier reported here, NAFCU had been among the organizations raising concerns that regulators and banks were interpreting the rule outside of “Congress’ intent.”
During an FDIC board meeting here, Gruenberg clarified that the language in the regulatory relief bill is intended for community banks, and not all banks as some had argued.
"There has been some discussion that the new statute can be read in a way that would allow any bank, regardless of asset size, to be exempt from the Volcker Rule if its trading assets and liabilities are five percent or less of its total consolidated assets … This was not the intent of the new statute as I understand it,” Gruenberg said. “I believe it is clear that this statutory exemption … appl[ies] only to banking organizations with $10 billion or less in total consolidated assets and that the limitation on trading assets and liabilities is an additional limitation placed on this defined group of banking organizations.”
Points Raised by NAFCU
As CUToday.info reported, in its letter NAFCU had stated:
- “The Agencies should recognize that [the legislation] was never meant to afford the largest and most complex banks relief from critically important safety and soundness regulations.”
- “[S. 2155] does not give rise to any possible inference that Congress intended to […] extend Volcker Rule relief to large banks, as some have suggested.”
- “The intended meaning of [S .2155] is not altered by the inclusion of double negatives, as some have claimed, and there is no reasonable interpretation of the statute, its context, or any of the supporting evidence that can justify flipping the word ‘and’ […] to ‘or.’”
- “While creative legal interpretations devised by the largest banks may serve to illustrate the need for more careful legislative drafting, they should not entice the Agencies to disregard Congressional intent.”
The NAFCU letter was written by EVP-Governmental Affairs and General Counsel Carrie Hunt.