ICBA Statement on Fed Announcement of Two Additional One-Year Extensions for CLOs under Volcker Rule

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Washington, D.C. (April 8, 2014)—Camden R. Fine, president and CEO of the Independent Community Bankers of America® (ICBA), today released this statement following the Federal Reserve Board’s announcement that it intends to give banking entities two additional one-year extensions to conform their ownership interests in and sponsorship of certain collateralized loan obligations (CLOs) covered by the Volcker Rule.

“While ICBA commends the agencies for trying to address this issue, ICBA still believes that CLOs should be completely exempted from the Volcker Rule. The record clearly shows that Congress never intended to cover TruPS CDOs or CLOs as ‘covered funds’ under the Volcker Rule, nor was it the intent of Congress for the Volcker Rule to adversely impact community banks. Rather, the Volcker Rule was intended to prevent large financial institutions from undertaking risky investments.

ICBA will continue to call on the agencies to exempt all TruPS CDOs and CLOs from the Volcker rule. The association also supports legislation (H.R. 4167) that would allow community banks to retain debt securities of collateralized loan obligations issued before Jan. 31, 2014.

About ICBA

The Independent Community Bankers of America®, the nation’s voice for nearly 7,000 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services.

News Source : ICBA Statement on Fed Announcement of Two Additional One-Year Extensions for CLOs under Volcker Rule

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