National Association of Federally-Insured Credit Unions (NAFCU) President and CEO Dan Berger sent a letter to federal banking regulators urging them not move forward with a rulemaking to loosen Volcker rule requirements. Berger's letter was sent to the Federal Reserve Board of Governors, Commodity Futures Trading Commission (CFTC), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC) and Securities and Exchange Commission (SEC).
"Loosening requirements under section 13 of the BHC Act would revive the risky trading practices that contributed to the Great Recession and fundamentally degrade the stability and liquidity of capital markets," Berger wrote. "Accordingly, NAFCU asks that the federal banking regulators jointly conducting this rulemaking put Main Street financial principles ahead of the speculative and potentially destabilizing priorities of large, multinational banks."
In the letter, Berger also noted that the agencies' proposed rulemaking goes much further than recent relief given to community banks by Congress. He also argued that the Volcker rule was a "critical reform" coming out of the Great Recession because "banks should not be able to gamble with consumer deposits on speculative investments that could imperil and safety and soundness of the financial system."
In defense of the Volcker rule, Berger highlighted that it promotes stability, exempts smaller banks from unnecessary compliance and reporting requirements and provides flexibility as compliance is based on a tiered structure. He also pointed out that large banks continue to accumulate large profits even with the rule in place, despite claims of significant burden.
For full text of the letter, click here.