Volcker 2.0: Agencies Propose to Reduce Regulatory Burdens Imposed by the Volcker Regulations

After a long lead up, the five U.S. agencies (Agencies) with responsibility for the regulations that implement the Volcker Rule (Regulations) have issued a wide-ranging proposal to tailor the application of the Regulations in order to reduce what the Agencies consider to be unnecessary burdens on institutions subject to the Regulations (Proposal).

The Proposal indicates that the Agencies recognize there are a number of opportunities for improvements to the current Regulations. With over 300 specific requests for comment, the Proposal also shows an interest by the Agencies in considering a wide range of recommendations for further improvement of the Regulations.

Although the Proposal would provide regulatory relief and greater clarity in many areas, this regulatory action, if implemented, falls far short of a goal held by many in the industry who hoped for a complete legislative repeal of the Volcker Rule. Ultimately, Congress enacted much more limited changes to the Volcker Rule when it passed the Economic Growth, Regulatory Relief and Consumer Protection Act (Act), which was signed by President Trump on May 24, 2018. The Act exempts banking entities with less than $10 billion in consolidated assets and limited trading activities from the Volcker Rule and narrows the scope of the customer fund naming prohibition.

The recent impetus for reform of the Regulations was triggered by recommendations by the Treasury Department in its Banking and Asset Management reports on regulatory reform in June and October 2017, as well as OCC’s August 2017 request for comment on the Regulations.

There will be a 60-day comment period commencing when the Proposal is published in the Federal Register.

Read "Volcker 2.0: Agencies Propose to Reduce Regulatory Burdens Imposed by the Volcker Regulations."