Further Streamlining Complex Federal Regulation Would Simplify Compliance, Allow Banks to Better Serve Customers, Businesses & Communities Across America
FOR IMMEDIATE RELEASE
CONTACT: Julia Lawless, (202) 457-8766
WASHINGTON, D.C. – Proposed changes to the implementation of the Volcker Rule should be revised to avoid creating additional layers of complexity that are contrary to federal regulators’ shared goal to simplify compliance standards, the Financial Services Forum said.
In a letter to regulators this week, the Forum commented on proposed changes to the Volcker Rule and made recommendations that would reduce barriers limiting banks’ ability to lend to businesses and households and invest in communities across the country. The Forum also made recommendations to further streamline the proposal’s compliance regime, while still preserving the original intent of the law.
“There is broad bipartisan consensus that the Volcker Rule, in its current form, is too complex and needs to be simplified,” Forum President and CEO Kevin Fromer said. “While regulators’ attention to this issue is laudable, more can be done to achieve the goal of simplification while preserving the Volcker Rule and its intent.”
The Forum’s comment letter outlines modifications that should be made to improve the proposal, including:
- Eliminating the Proposed Accounting Test: Noting that this aspect of the proposal is overbroad and inconsistent with the agencies’ stated goals and the statutory requirement to cover short-term trading activity, the Forum urged regulators not to adopt the proposed accounting test;
- Improving the Covered Fund Definition: The agencies should revise the definition of “covered fund” to enhance the ability of banks to engage in customer-focused banking activities and contribute to the growth of the economy in a manner consistent with the statutory intent; and
- Streamlining Additional Compliance Burdens: The Forum raised concerns that the proposal would increase the Volcker Rule’s compliance burden without any clear benefit and recommended that the agencies streamline the metrics reporting and recordkeeping requirements.
The letter was sent to the five federal agencies that requested comment on the proposed regulation: the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Commodity Futures Trading Commission, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission.
A copy of the letter, which was submitted to the agencies on October 17, can be found here.
The Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, deep and liquid capital markets, a competitive global marketplace, and a sound financial system.