Spencer Bachus, the chairman of the House Financial Services Committee, may introduce a bill that would enact changes to the controversial Volcker Rule, saying that the current version will be “devastating” to the economy.
“It will undermine our nation’s ability to compete and make it harder for Main Street businesses to raise capital so they can grow and create jobs,” Bachus said, Politico reports. “Therefore, we must consider legislative alternatives that will not stifle economic growth and job creation.”
Bachus is currently seeking input from investors and the public on potential alternatives to the rule, which must be submitted by Sept. 7.
The rule prohibits banks from engaging in proprietary trading — or risky investments with client funds — though the rule will largely impact big banks like Morgan Stanley and Goldman Sachs, according to Politico.
Opponents of the rule maintain that proprietary trading did not contribute to the recent financial crisis and that eliminating the practice will make it harder for companies to raise funds. Proponents, however, say that the rule will prevent banks from making trades that may result in huge losses.
Sens. Carl Levin (D-Mich.) and Jeff Merkley (D-Ore.), authors of the Volcker Rule language, have urged regulators to toughen the proposal. A final version of the rule was expected to be finished in July, but regulators missed the deadline. The final rule is expected by the end of the year.