WASHINGTON—Federal banking regulators are being asked to extend by 90 days the comment period on a proposal that would loosen provisions of the Volcker rule.
NAFCU Regulatory Affairs Counsel Andrew Morris made the request, arguing that the current deadline isn’t sufficient for stakeholders to provide meaningful analysis and comments. NAFCU has urged the regulators to not move forward with the rulemaking.
The Volcker Rule was implemented in the wake of the financial crisis of a decade ago and is designed to reduce risks at the biggest banks by generally prohibiting banks from conducting certain investment activities with their own accounts and limiting their dealings with hedge funds and private equity funds.
In the letter sent to the Federal Reserve Board of Governors, Commodity Futures Trading Commission (CFTC), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC) and Securities and Exchange Commission (SEC), Morris noted the complexity of the proposed rule.
342 Questions
“The proposal includes 342 questions, almost all of which seek in-depth responses to issues which range from the details of individual compliance programs to the scope of the Volcker Rule’s core definitions,” Morris wrote. “Furthermore, the majority of these questions consist of multiple parts that require careful attention to market behavior and economic factors.”
Last month, NAFCU President and CEO Dan Berger sent a letter to the banking regulators urging them to drop the plan. Berger argued that moving forward "would revive the risky trading practices that contributed to the Great Recession and fundamentally degrade the stability and liquidity of capital markets."