A proposed rulemaking to exclude “a majority of community banks” from restrictions on proprietary trading – the “Volcker Rule” – consistent with last year’s financial regulatory relief law is highlighted in a bulletin issued Monday by the federal regulator of national banks.
In its Bulletin 2019-9, the Office of the Comptroller of the Currency (OCC) noted that it and four other federal regulators (the Federal Reserve Board, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corp., and the Securities and Exchange Commission) are seeking comments until March 11 on the proposed rule.
The proposal was issued in December by the agencies, but its publication date was delayed in the Federal Register until this month (Feb. 8) as a result of the 35-day partial government shutdown, which ran from late December to late January.
The proposal would revise the Volcker Rule to conform with the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S. 2155), enacted into law in May 2018. In line with the statutory requirements, the proposal would exclude a community bank from the restrictions of the Volcker Rule if it meets the following conditions:
- the community bank, and every entity that controls it, must have total consolidated assets equal to or less than $10 billion; and
- trading assets and liabilities of the community bank, and every entity that controls it, must be equal to or less than 5% of its total consolidated assets.