More time for Volcker Rule comments possible, FDIC chairman says

FDIC Chairman Jelena McWilliams on Thursday indicated it’s possible that the banking industry may receive more time to submit their comments on a proposal to revamp the Volcker Rule, created in 2013 to prohibit proprietary trading by banking organizations.

FDIC’s Jelena McWilliams in Aug. 23 press conference.

McWilliams made her comments on this and other regulatory matters during a brief Q&A session following her presentation in a press conference Thursday on second-quarter banking industry data.

The proposed Volcker Rule changes, which would tailor the requirements for three tiers of firms based on trading activity level, was released in early June by regulators and only made it into the Federal Register in mid-July. Comments are due Sept. 17.

Asked for her take on the proposal, McWilliams declined to provide her views at this stage. But asked about industry requests for more comment time, she said, “I believe we are open to an extension.”

McWilliams, during her Q&A with reporters, also addressed the following:

  • Capital proposal: As to whether the FDIC may reverse itself and join other regulators in a proposed rule on the “enhanced supplemental leverage ratio,” McWilliams said the agency is “willing to look at everything … done in the past and to reassess.”
  • Community Reinvestment Act: Regarding the prospect of a Community Reinvestment Act proposal coming from the OCC, McWilliams said if a single agency issues an advance notice of proposed rulemaking on its own, that “does not mean the other agencies will not join … at the NPR [notice of proposed rulemaking] stage.” She also noted the rule hasn’t been revised “in a long time” and that, with the significant changes in the banking industry, she isn’t sure current requirements are “meeting the demands” of low-income communities.
  • Industrial loan companies (ILCs): McWilliams said the law is “relatively clear” on ILCs and that ILC applications will be processed “as expeditiously as possible,” but each will be reviewed on an “ad hoc” basis and for its impact on the industry and consumers.

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