At least 60 responses on proposed changes to the “Volcker rule” were received by the Office of Comptroller of the Currency (OCC) to its 45-day comment call on the issue, including from both international and domestic commenters, as well as public interest groups and private citizens, with most commenters supporting changes to the rule.
However, a sizable number also supported keeping the rule as is, or strengthening its provisions
In August, the OCC issued a call for comment on revising the so-called “Volcker Rule,” a section of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), which bans banks from conducting certain investment activities with their own accounts, and limits their relationships with hedge and private equity funds. The comment period closed Thursday (Sept. 21).
Among the commenters were the national bankers’ associations – the American Bankers Association, the Independent Community Bankers of America, the Mortgage Bankers – as well as international associations (Canadian Bankers Association and European Banking Federation), investment organizations (such as the International Swaps and Derivatives Association), public interest groups (including Public Citizen), and private citizens.
In its comment request, OCC said it described its notice about revising the regulation as an effort to determine if the “compliance burden” on banking entities could be decreased, and if economic growth could be fostered.
But many of the commenters wrote about either revoking the rule, modifying it – or making no changes at all.
Not surprisingly, most of the financial industry interest groups – domestic and international – and individual institutions supported revising the rule. Generally, the commenters stated their interests to “improve” the regulation by making it more flexible. As one commenter noted (from the Stifel Financial Corporation), “the Volcker Rule aims at important ends but its implementation can and should be improved to reduce compliance burdens and promote economic growth.”
Others were more specific, citing the rule’s “inappropriate extraterritorial reach” or seeking broad exemptions (such as the Community Bankers Association of Illinois, which called for the rule to exempt all community banks).
Individual members of the public wrote in as well, with a number favoring maintaining the rule as it is. Among other things, commenters wrote “I’m basically for the Volcker Rule” and that it “should remain illegal for banks to be able to count on taxpayer-funded bailouts when these speculative investments go bad.”
At least one financial institution wrote in favor of making no changes. Beneficial State Bank of Oakland, Calif., wrote that it saw no benefits to community banks of reducing or relaxing the rule. “Reduction or elimination of the Volcker Rule restrictions will likely result in greater conflicts of interest, greater likelihood of financial instability and the moral hazard that while trading profits would be retained by few individuals, trading losses may result tax-payer funded bail outs,” the bank wrote.