On May 30, 2018, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) approved a notice of proposed rulemaking to amend the regulations implementing the so-called “Volcker Rule” provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Each of the other agencies responsible for implementing and enforcing the Volcker Rule (collectively with the Federal Reserve, the “Agencies”) subsequently approved or is expected to approve in the very near term a substantially similar notice of proposed rulemaking (collectively with the Federal Reserve’s notice of proposed rulemaking, the “NPR”).
The NPR follows recent statements by representatives of the Agencies, a 2017 report on financial reform by the U.S. Department of the Treasury (the “Treasury Report”) and a public comment process initiated by the OCC (the “OCC RFI”) following the Treasury Report, each of which highlighted concerns that the current Volcker Rule regulations are overly complex and should be tailored to reduce compliance costs and clarify the application of the regulations. The NPR also comes shortly after Congress’s May 24, 2018 enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Reform Act”), which exempts certain smaller banking entities from the Volcker Rule entirely.