Senate Democrats Urge Regulators to “Finish the Job” on Volcker Rule

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter and Bank Digest.

Senate Democrats are urging regulators to “finish the job” and strengthen capital markets by finalizing a clear, strong and effective Volcker Rule by this summer.

“With fewer conflicts of interest and more reliable market-makers, our markets will be healthy and vibrant, just as they were when the Glass-Steagall Act protected our financial system. But we need you to fulfill the statutory mandate,” the letter from 22 senators said.

While senators acknowledged that the proposed rule issued last October was not perfect, “it should not be delayed or scrapped.” They called on regulators to adopt the best elements from the proposed rule, and to eliminate loopholes and draw clear lines based on objective data and observable markets. Senators also pressed for strengthening CEO and board-level accountability and public disclosure, along with coordinated and consistent enforcement, including data sharing by regulators.

The letter also urged regulators to maintain and ensure ease of compliance for the overwhelming number of community and regional banks that do not engage in the covered activities.

Senators noted that banks directly impacted by the Volcker Rule have already had almost two years to make changes, and that the statute provides for an additional two years to come into compliance. During this time additional guidance may be offered, the senators pointed out. “Setting out this guidance now is the path to providing industry, investors, and taxpayers the certainty they want regarding how this important firewall will be applied,” the senators said.