January 15, 2014
WASHINGTON – Senate Banking Committee Chairman Tim Johnson (D-SD) released the below statement following an announcement by financial regulators that they have approved an interim final rule to address an issue in the Volcker rule that could have forced community banks to write-down and sell collateralized debt obligations backed by Trust Preferred Securities (TruPS).
“The Volcker Rule was designed to prohibit large banks from making risky proprietary trades with federally insured deposits. After finalizing the rule, regulators were responsive and took immediate steps to address an unforeseen concern raised by community banks about immediate losses they faced. I commend the regulators for their prompt action to resolve this issue and prevent unintended consequences for community banks.”