This bill would aim to streamline banks’ compliance with the Volcker Rule by giving the Federal Reserve’s Board of Governors exclusive rulemaking authority and exempting community banks with less than $10 billion in assets and trading liabilities less than 5 percent of total assets. A bank’s primary regulator would have sole authority for examinations and enforcement. The Volcker Rule restricts financial institutions that are insured by the Federal Deposit Insurance Corporation (FDIC) from owning or sponsoring hedge funds and private equity funds. Under current law, rulemaking regarding the Volcker is shared among several regulatory institutions, including the Fed’s Board of Governors.
What is House Bill H.R. 4790?
Cost of House Bill H.R. 4790
In-Depth: Sponsoring Rep. French Hill (R-AR) introduced this bill to improve coordination among the federal banking regulatory agencies as it relates to the Volcker Rule:
“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 one of the most indecipherable. 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.”
Some House Democrats expressed opposition to this bill writing in its committee report:
“H.R. 4790 is the latest attempt to weaken the Volcker Rule, a cornerstone of Wall Street reform enacted in the wake of the financial crisis that prohibits taxpayer-backed banks from risky proprietary trading and from owning hedge and private equity funds. The bill would create a dangerous loophole by providing a blanket exemption from the Volcker Rule for banks with consolidated assets of $10 billion or less and with less than 5% of those assets in trading assets. The bill would also delegate sole rulemaking authority on the Volcker Rule to the Federal Reserve, inappropriately and unnecessarily taking away the jurisdiction of the FDIC, OCC, SEC, and CFTC and making it easier for the Trump administration to weaken or repeal the rules.”
Summary by Eric Revell(Photo Credit: HaizhanZheng / iStock)
Volcker Rule Regulatory Harmonization Act
To amend the Volcker rule to give the Board of Governors of the Federal Reserve System sole rulemaking authority, to exclude community banks from the requirements of the Volcker rule, and for other purposes.
- Not enactedThe President has not signed this bill
- The senate has not voted
Committee on Banking, Housing, and Urban Affairs
- senate Committees
- The house Passed April 13th, 2018Roll Call Vote 300 Yea / 104 Nay
Committee on Financial ServicesIntroducedJanuary 12th, 2018
- house Committees