House lawmakers to regulators: Slow down on ‘Volcker Rule’

{mosads}The letter was spearheaded by Rep. Randy Neugebauer (R-Texas), who warned that the proposal implementing the rule “twists a simple concept into an overly complex and burdensome regulation.”

Specifically, lawmakers are asking regulators to extend by at least a month the time the public has to comment on the dense proposed rule that was unveiled in October. The window for comments is currently set to close on Jan. 13.

Lawmakers signing on to the letter are mostly Republicans, who have been critical of Dodd-Frank since its inception. However, the letter did garner the signatures of four Democrats — Reps. Sanford Bishop (Ga.), Mike Ross (Ark.), David Scott (Ga.) and Heath Shuler (N.C.).

The Volcker Rule prohibits banks from trading for their own profit rather than at the behest of clients, known as proprietary trading. It also limits banks’ relationships with hedge funds and private equity funds in an attempt to isolate them from riskier parts of the financial market.

However, members of the financial industry have warned that a rule that is too restrictive could make it difficult for some markets to function. Backers of Wall Street reform are pushing for a strong firewall between banking and riskier aspects of financial markets.

When regulators offered up their original proposal, spanning hundreds of pages, it included hundreds of questions to the public on areas they were still trying to figure out.