Letter to the Hon. Jerome Powell, Chairman of the Board of Governors of the Federal Reserve, the Hon. Jelena McWilliams, Chair of the Federal Deposit Insurance Company, the Hon. Joseph Otting, Comptroller of the Currency, the Hon. Jay Clayton, Chairman of U.S. Securities and Exchange Commission, and the Hon. J. Christopher Giancarlo, Chairman of the U.S. Commodity Futures Trading - Stop Weakening Volker Rule

Letter

Dear Chairman Powell, Chair McWilliams, Comptroller Otting, Chairman Clayton, and Chairman Giancarlo:

We write to express our strong disappointment with the recent effort to weaken the Volcker Rule, which prohibits risky trading practices at federally-backed institutions. We are concerned that the proposed rule released on May 30 by the Federal Reserve would undermine a fundamental provision of the Dodd-Frank Wall Street Reform Act that prevents taxpayers from being asked to bail out financial institutions that make high-risk trades.

Reckless gambling on Wall Street played a major role in the financial crisis and resulted in massive taxpayer bailouts. To protect taxpayers and the economy, Congress enacted the Volcker Rule to separate traditional banking from these risky trading practices. The Volcker Rule's ban on high-risk trading by large, federally insured banks was a key provision of the Dodd-Frank Wall Street Reform Act intended to ensure that American taxpayers would never again be on the hook when Wall Street banks gamble.

The proposed rule issued by the federal banking regulators is not a minor change or an attempt to cut red tape for community banks and credit unions. Instead, it creates potentially major loopholes for Wall Street banks to avoid complying with a core protection put in place by Congress to protect taxpayers and investors. Loosening the Volcker Rule for Wall Street banks opens the door for them to once again engage in risky trading behavior and put the financial stability of our economy at risk.

As you consider any potential changes to the Volcker Rule, we urge you to consider the potential ramifications of risky trading practices at federally insured institutions.