The federal bank deposit insurer’s proposal Tuesday to ease collateral provisions of the interagency swap margin rule drew criticism and a warning from the chair of the House panel with jurisdiction over financial industry laws and rules.
The proposed rule, slated for a 30-day comment period once all agencies have signed on, would remove the requirement for banks to collect initial margin on swaps with affiliates. Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee, said in a statement late Tuesday that the proposal “would ultimately be a $40 billion giveaway to Wall Street megabanks at the expense of our economic stability and U.S. taxpayers.”
The FDIC proposal was issued Tuesday with Board Member Martin Gruenberg dissenting. Waters, in a statement later, said said the FDIC should not adopt the proposed rule and that she “will continue to work to prevent its implementation.”
Waters and Sen. Sherrod Brown (D-Ohio), ranking member of the Senate Banking Committee, said in a joint letter to the heads of the FDIC, Federal Reserve Board, and Office of the Comptroller of the Currency (OCC) that easing the requirements would be “a deliberate decision for less stability in the financial system.”
RR: With 1 dissenting, FDIC Board proposes changes in swap margin rule (Sept. 17, 2019)