U.S. Rep. French Hill (R-AR) recently introduced a bill to enhance coordination among the federal banking regulatory agencies as it relates to the Volcker Rule.
The Volcker Rule, named after former Federal Reserve Chair Paul Volcker, prohibits banks from conducting certain investment activities with their own accounts and limits their ownership of and relationship with hedge funds and private equity funds – or covered funds. It is designed to prevent banks from making the kind of speculative investments that led to the 2008 financial crisis.
Hill’s Volcker Rule Regulatory Harmonization Act of 2018 (H.R. 4790) would amend Section 619 of the Dodd-Frank Act to streamline the regulatory authority over the Volcker Rule. It would do this by granting the Federal Reserve the exclusive rulemaking authority and provide the primary federal banking agency for a banking entity the sole examination and enforcement authority.
Community banks with $10 billion or less in consolidated assets are excluded from the Volcker Rule Requirements.
“As a former community banker, I have dealt with the confusion associated with regulatory inconsistencies across the federal banking agencies, the Volcker Rule having become being one of the most indecipherable,” Hill said. “Given the Rule has over 270 federal register pages and names four different agencies as regulatory authorities, my bill attempts to streamline the regulatory rulemaking and enforcement process. This simple clarification will not only ease the regulatory burden for our local banks, it will enhance capital formation and financing options.”