Agencies Finalize Volcker Rule Exemption for Community Banks

The five federal financial regulatory agencies today finalized a rule implementing a section of the S. 2155 regulatory reform law that grants an exclusion from the Volcker Rule for certain community banks. The rule will take effect upon publication in the Federal Register.

To qualify for the exemption, community banks and their controlling entities must have $10 billion or less in total consolidated assets and total trading assets and liabilities equal to 5 percent or less of total consolidated assets.

As called for by the American Bankers Association in its comment letter, the agencies confirmed that a bank or savings association seeking to determine its exclusion may rely on its most recent Call Report for its consolidated assets and total trading assets and liabilities. The agencies also confirmed that securities appropriately classified as available-for-sale and excluded from trading assets on the call report will not count toward an institution’s trading assets and liabilities threshold.