• 08 Jan 2014 at 5:37 PM

Quixotic Crusade Against Dodd-Frank Has Longer To Run

A Repubican congressman from Texas—last seen leading the doomed charge to repeal one chunk of the Dodd-Frank law—has moved on to trying to do away with another.

Representative Jeb Hensarling, a Republican of Texas and chairman of the House Financial Services Committee, is expected to propose a bill that could open up a huge loophole in the rule. The proposed change could allow banks to create and own securities with many types of investments that are barred under the Volcker Rule, which is intended to prohibit speculative trading by banks while letting them both make markets for customers and hedge other investments….

The proposed legislation, notable for its brevity, provides that nothing in the Volcker Rule “shall be construed to require the divestiture of any collateralized debt obligations backed by trust-preferred securities issued before December 10, 2013.”

The wording appears to indicate that new collateralized debt obligations could be created that banks could hold and trade, as long as they contained at least one TruPS security issued before Dec. 10. Most of the assets in the collateralized debt obligation could be other securities.

House Financial Services Chairman to Seek Volcker Rule Change [DealBook]

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Comments (5)

  1. Posted by shazar jd esq | January 8, 2014 at 6:41 PM

    Abalalalalaabababababaabababalalvababa REPUBLICANS!!!!! I AM ABOVE THE LAW WORSHIP MY JD PENIS AND REPEAT AFTER ME: GOOD BOYS AND GIRLS VOTE DEMOCRAT! SAY THIS 10X BEFORE EACH MEAL.

  2. Posted by $hove it | January 8, 2014 at 9:12 PM

    You know what Shazar, shove that law degree up your ass and tell Hillary she will NEVER get my vote¥

  3. Posted by MJ 4E | January 8, 2014 at 11:50 PM

    WOAHHHH daddadedap shamona.

  4. Posted by Guest | January 9, 2014 at 1:45 AM

    U know what ? You're an idiot

  5. Posted by Robin | January 9, 2014 at 9:50 AM

    Holy Bad Drafting, Batman. The TruPS market is dead and has been for some time. Obviously, the intent was to allow/exempt CDOs issued before 12/10/13, not any CDO containing underlying securities issued before then.