ABA Comment Letter to Volcker Rule Regulatory Reform Proposal

Ladies and Gentlemen:

The American Bankers Association (ABA) appreciates the opportunity to provide comments to the five federal regulatory agencies (Agencies) responsible for issuing the rules (Regulation) that implement Section 619 of the Dodd-Frank Act, codified as Section 13 of the Bank Holding Company Act of 1956, as amended (Volcker Rule, or Rule). The Agencies are soliciting public comment on proposed amendments to the Regulation (Proposal) that are intended to continue the Agencies’ efforts to improve, clarify, and streamline the Volcker Rule’s regulatory requirements, thereby addressing the regulatory burden and improving agency administration and supervision.

We commend the Agencies for their ongoing efforts to amend the Regulation consistent with the congressional purpose of the Volcker Rule. We agree with Federal Reserve Chair Jerome Powell that “a simpler, clearer approach to implementing the rule makes it easier for both banks and regulators to carry out the intent of the rule.”3 As we have stated previously, the Regulation – with its vaguely defined terms, uneven treatment, and subjective tests devised to capture improper proprietary trading and covered fund investment activity – needlessly has complicated the statutory requirements, driving up the cost of compliance and negatively impacting economic activity.4 The Agencies’ studied and thoughtful recommendations for reform, therefore, are an important recognition of the need to rightsize and tailor the Volcker Rule’s regulatory framework. We concur with the Agencies’ actions on regulatory reform and support adoption of the Proposal, with recommendations for additional modifications as described below. In light of the COVID-19 pandemic, we note that expedited approval of the Proposal would allow banking entities to invest in community relief and development efforts and promote capital formation through the establishment of, and/or investment in, the proposed excluded funds described herein, including public welfare and venture capital funds.

Download the letter to read full comments.