FI regulators confirm NAFCU's interpretation of Volcker relief
Five banking regulators this week adopted a final rule clarifying that Volcker rule relief provided under the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155) applies only to community banks. This supports NAFCU's interpretation of the provision, which the association shared with the regulators last year.
Due to unclear language in S. 2155, some had argued that the provision could extend relief to banks with more than $10 billion in assets. However, in the final rule, the banking regulators confirmed that it only excludes community banks with $10 billion or less in total assets from complying with the Volcker rule.
NAFCU wrote to the OCC, FDIC, Federal Reserve, Commodities Futures Trading Commission and Securities and Exchange Commission in December arguing that the relief was not intended for large banks. The association also reiterated that the Volcker rule is a "critical reform that emerged from the financial crisis which addresses, among other things, the riskiest of all investment behaviors – investing in private equity or hedge funds using a bank's own accounts for the bank's own benefit."
NAFCU has also urged banking regulators to withdraw a proposed rulemaking that would loosen Volcker rule requirements on big banks, arguing that doing so could undermine financial stability. A final rule is expected later this year.
NAFCU consistently works to set the record straight on the differences between credit unions and banks as the banking industry continues to lobby to have their requirements relaxed while trying to put the requirements on credit unions.
Last year, the association released a white paper calling for members of Congress to discuss creating a modernized Glass-Steagall Act in order to protect consumers from banks that are too big to fail. The association is supportive of reform efforts that allow credit unions and other financial institutions to compete without putting consumers at risk.
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