A citizens advocacy group has filed suit against the heads of various U.S. regulatory agencies, asking that they be required to finalize the so-called Volcker Rule on a timely basis.
Occupy the SEC (OSEC), announced Wednesday that it has filed a lawsuit in the Eastern District of New York against the heads of six federal agencies, including the U.S. Federal Reserve Board, the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corp. (FDIC), and the U.S. Treasury.
The suit seeks a court order compelling the regulators to finalize the Volcker Rule — which it argues has been delayed too long — within a timeframe specified by the court.
The proposed rule is intended to curb banks’ risk taking activities by limiting their exposure to proprietary trading, private equity and hedge funds. However, the OSEC argues that its implementation is long overdue. It notes that it has been almost three years since regulatory reforms were passed (the Dodd Frank Act), including provisions to adopt the Volcker Rule, and that the deadline for finalizing the Volcker regulations has come and gone with no sign that a final rule is imminent.
“The longer the agencies delay in finalizing the rule, the longer that banks can continue to gamble with depositors’ money and virtually interest-free loans from the Federal Reserve’s discount window,” it says.
“The financial crisis of 2008 has taught us that the global economy can no longer tolerate such unrestrained speculative activity.”
The financial industry has lobbied against the rule; including the Canadian industry and regulators, who claim that it could have unintended extra-territorial consequences.