“We have consistently questioned the necessity and efficacy of the Volcker Rule and believe that its full repeal is the only way to avoid the harm that it would do to the economy, bank customers and the banking industry,” the ABA said. “The federal regulatory agencies’ protracted struggle, despite their best efforts, to promulgate workable rules confirms the fundamental problems with the Volcker Rule.”
Additionally, the agency urged the HFSC to inform federal regulatory agencies of the potential costs of the proposal.
“[W]e would urge that the committee [immediately] alert the agencies to the harm to credit availability and market liquidity that would be caused by adoption of the pending [Volcker] proposal and direct the agencies to ensure that, when finalized, the rules do not impair traditional banking services and their availability to bank customers nor impose costs on banks, particularly regional and community banks, where no argument of systemic risk could be justified,” the ABA said.
The ABA suggested legislative alternatives, including providing plain and concise definitions of key terms, requiring a cost-benefit analysis and appointing the Federal Reserve as the lead regulator responsible for interpretation of the rule.