WASHINGTON -- The U.S. House of Representatives on Friday passed the Volcker Rule Regulatory Harmonization Act, reducing the number of government agencies that will oversee one of the provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The measure also exempts community banks from the Volcker Rule's requirements.
The bill, HR4790, was sponsored by U.S. Rep. French Hill, a Republican from Little Rock.
The Volcker Rule, named after former Federal Reserve Chairman Paul Volcker, prohibits banks from making certain investments with their own accounts, and limits their dealings with private equity funds and hedge funds.
These types of trades, made by major financial institutions, played a key role in the 2008 financial meltdown.
Hill's proposal garnered broad support, passing 300-104; 222 Republicans and 78 Democrats backed the legislation. One Republican and 103 Democrats opposed it.
"Right now there are five agencies that oversee the Volcker Rule," Hill said in an interview. "They can interpret it any way that they want to and they give conflicting guidance."
Hill's legislation "harmonizes that guidance by saying that the Federal Reserve board of governors is the arbiter of the rule. They can interpret it. They can help other regulators determine what the answer to a conflict question is," Hill said.
The legislation also "exempts community banks from the regulatory burden of the Volcker Rule," Hill said. "Those are banks under $10 billion and don't have a lot of trading assets."
Hill, who serves on the House Financial Services Committee, is the former chairman and chief executive officer of Delta Trust and Banking Corp., a Little Rock financial institution that he founded and led before its purchase in 2014 by Simmons First National Corp. of Pine Bluff.
The changes contained in Hill's legislation already have wide support in the Senate, Hill said.
The legislation was backed by the American Bankers Association, which said it "provides proper safeguards while streamlining the process."
"This much needed reform is long overdue," American Bankers Association Executive Vice President James Ballentine wrote in a letter to House members Wednesday.
Business on 04/14/2018