Agencies Issue Volcker Rule Overhaul Proposal

The federal financial regulatory agencies have published in the Federal Register a long-awaited set of proposed changes to the Volcker Rule that are expected to simplify the rule’s compliance burden and better target its effects toward intended activities. The proposal would streamline and tailor the rule by focusing its restrictions on proprietary trading and investments in covered funds on banks with “significant” and “moderate” trading activities; banks with limited trading assets and liabilities of less than $1 billion would have a rebuttable presumption of compliance with the Volcker Rule.

This proposal follows from a provision in the recently enacted S. 2155 that generally exempts banks with less than $10 billion in assets from Volcker Rule requirements to significantly reduce the rule’s burden on community banks. Comments on the proposal will be due Sept. 17. ABA has been actively engaging with its Volcker Rule working groups to identify and address the issues and will file a comment letter to the proposal.