Senate Dems: Americans 'deserve' a final Volcker Rule this summer

A coalition of Senate lawmakers are asking financial regulators to step on the gas and get the contentious "Volcker Rule" across the finish line this summer.

Several regulators charged with getting the rule in place have already begun to warn lawmakers that it is a long shot that they will have the rule finished and in place by the July deadline laid out in the law.

But the group of 22 left-leaning lawmakers wrote to those regulators Thursday, telling them that this key piece of the Dodd-Frank financial reform law needs to be promptly put into effect in order to bring an end to the underpinnings of the financial crisis.

"The American people suffered greatly because of the financial crisis," they wrote. "The Volcker Rule is a critical protection to help ensure that such a crisis does not happen again. The economy needs these protections, our constituents deserve these protections, and the law demands these protections."

The letter was authored by Sens. Carl Levin (Mich.) and Jeff Merkley (Ore.), who were the original sponsors of the ban on "proprietary trading" that ultimately was included in the broad financial reform bill.

The measure is aimed at preventing banks from making risky trades for profit, but as regulators work to implement the rule, they have come under heavy fire from the business and financial communities, as well as Republicans, who contend strict rules could stifle American markets.

A quintet of regulators — the Comptroller of the Currency, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, Federal Reserve, and Securities and Exchange Commission — have been given the joint mission of making the rule a reality.

Those watchdogs have been poring over thousands of public comments on their October proposed rule, which ran hundreds of pages and asked a litany of questions seeking further input.

Levin and Merkley were among those weighing in via comment letters, calling the original proposal for being too complex and too accommodating to financial interests. But they maintained their desire to see a workable rule in place before the fall season.

"To be sure, the proposed rule is not perfect, but it should not be delayed or scrapped," they wrote in Thursday's letter.

Rep. Barney Frank (D-Mass.) has similarly criticized lawmakers for making the rules too complicated, and previously called on regulators to finish a simplified version of the rule by Labor Day.

Given the workload they face, and the number of competing interests seeking to sway the rule, regulators have said they do not expect to meet the July 21 statutory deadline for finalizing the rule.

Earlier this month, regulators issued a joint statement making clear that financial institutions would have two years from that deadline to fully comply with the rule, and that the window could be extended if the Fed deems it necessary.

---