Regulators are hoping to release an interim final rule this week designed to satisfy banker demands to change a provision of the Volcker Rule that threatens to force smaller institutions to take millions of dollars in write-offs, American Banker reported on Friday. While the situation is fluid and the exact form of relief could change, regulators are considering exempting all existing collateralized debt obligations backed by trust-preferred securities from compliance with the Volcker Rule. Such a move would likely stem the banker anger that erupted after regulators said such CDOs were covered by the controversial regulation, and may spur the American Bankers Association to drop its lawsuit over the issue.
