After two regulatory agencies adopted final revisions to the rule, Dodd-Frank defenders expressed concern that the amendments to the proprietary trading ban undermined the post-crisis statute.
The agency is trying to update its rate-cap policy for institutions that fall below "well-capitalized." But it remains to be seen if the proposed changes fully address community bankers' concerns.
The agencies had proposed an "accounting prong" as an alternative means to determine which proprietary trades are banned, but their final rule heeded industry concerns that that would be worse than the current approach.
Banks stand to enjoy new flexibility in complying with Dodd-Frank’s proprietary trading ban, but it remains to be seen if regulators will grant them all the relief they have sought.
The agency says the "disparate impact" standard needs to be amended to align with a recent Supreme Court ruling. But consumer advocates say the change would make it more difficult for borrowers to allege discrimination under the Fair Housing Act.
Critics of the Dodd-Frank provision are likely heartened by indications that policymakers may soon finalize a more bank-friendly version of the trading ban, but that relief could come at a price.
Banks currently can help their CRA performance with mortgages to anyone in a distressed neighborhood, but Joseph Otting said officials crafting a reform plan are considering limiting that to lower-income borrowers.
