Volcker Rule Regulatory Harmonization Act

To amend the Volcker rule to give the Board of Governors of the Federal Reserve System sole rulemaking authority, to exclude community banks from the requirements of the Volcker rule, and for other purposes. 1. Short title This Act may be cited as the Volcker Rule Regulatory Harmonization Act 2. Rulemaking authority under the Volcker rule (a) In general Paragraph (2) of section 13(b) of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1851(b)(2) (2) Rulemaking (A) In general The Board may, as appropriate, consult with the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, or the Commodity Futures Trading Commission to adopt rules or guidance to carry out this section, as provided in subparagraph (B). (B) Rulemaking requirements In adopting a rule or guidance under subparagraph (A), the Board— (i) shall consider the findings of the report required in paragraph (1) and, as appropriate, subsequent reports; (ii) shall assure, to the extent possible, that such rule or guidance provide for consistent application and implementation of the applicable provisions of this section to avoid providing advantages or imposing disadvantages to the companies affected by this subsection and to protect the safety and soundness of banking entities and nonbank financial companies supervised by the Board; and (iii) shall include requirements to ensure compliance with this section, such as requirements regarding internal controls and recordkeeping. (C) Authority The Board shall have sole authority to issue and amend rules under this section after the date of the enactment of this paragraph. (D) Conforming authority (i) Continuity of regulations Any rules or guidance issued under this section prior to the date of enactment of this paragraph shall continue in effect until the Board issues a successor rule or guidance, or amends such rule or guidance, pursuant to subparagraph (C). (ii) Applicable guidance In performing examinations or other supervisory duties, the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, as appropriate, shall update any applicable policies and procedures to ensure that such policies and procedures are consistent (to the extent practicable) with any rules or guidance issued pursuant to subparagraph (C). . (b) Conforming amendments Section 13 of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1851 (1) by striking the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, the Board (2) by striking ‘‘appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission’’ each place it appears and inserting ‘‘Board’’; (3) in subsection (c)(5), by striking Notwithstanding paragraph (2) provided in subsection (b)(2), The Board shall have the authority (4) in subsection (d)(1)— (A) in subparagraph (F)(ii)— (i) by striking the appropriate Federal banking agencies the Board (ii) by striking have not jointly has not (B) in subparagraph (G)(viii), by striking appropriate Federal banking agencies, the Securities and Exchange Commission, or the Commodity Futures Trading Commission, Board, 3. Enforcement; anti-evasion (a) In general Subsection (e) of section 13 of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1851(e) (e) Enforcement; anti-evasion (1) Appropriate Federal banking agency Notwithstanding any other provision of law except for any rules or guidance issued under subsection (b)(2), whenever the appropriate Federal banking agency has reasonable cause to believe that a banking entity or nonbank financial company supervised by the Board has made an investment or engaged in an activity in a manner that either violates the restrictions under this section, or that functions as an evasion of the requirements of this section (including through an abuse of any permitted activity), such appropriate Federal banking agency shall order, after due notice and opportunity for hearing, the banking entity or nonbank financial company supervised by the Board to terminate the activity and, as relevant, dispose of the investment. (2) Securities and Exchange Commission and Commodity Futures Trading Commission (A) In general Notwithstanding any other provision of law except for any rules or guidance issued under subsection (b)(2), whenever the Securities and Exchange Commission or the Commodity Futures Trading Commission, as appropriate, has reasonable cause to believe that a covered nonbank financial company for which the respective agency is the primary Federal regulator has made an investment or engaged in an activity in a manner that either violates the restrictions under this section, or that functions as an evasion of the requirements of this section (including through an abuse of any permitted activity), the Securities and Exchange Commission or the Commodity Futures Trading Commission, as appropriate, shall order, after due notice and opportunity for hearing, the covered nonbank financial company to terminate the activity and, as relevant, dispose of the investment. (B) Covered nonbank financial company defined In this paragraph, the term covered nonbank financial company . (b) Rule of construction Nothing in this section shall be construed to abrogate, reduce, or eliminate the backup authority of the Federal Deposit Insurance Corporation authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5301 12 U.S.C. 1811 4. Exclusion of community banks from Volcker rule Section 13(h)(1) of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1851(h)(1) (1) in subparagraph (D), by redesignating clauses (i) and (ii) as subclauses (I) and (II), respectively, and adjusting the margins accordingly; (2) by redesignating subparagraphs (A), (B), (C), and (D) as clauses (i), (ii), (iii), and (iv), respectively, and adjusting the margins accordingly; (3) in the matter preceding clause (i), as so redesignated, in the second sentence, by striking institution that functions solely in a trust or fiduciary capacity, if— institution— (A) that functions solely in a trust or fiduciary capacity, if— ; (4) in clause (iv)(II), as so redesignated, by striking the period at the end and inserting ; or (5) by adding at the end the following: (B) that does not have and is not controlled by a company that has— (i) more than $10,000,000,000 in total consolidated assets; and (ii) total trading assets and trading liabilities, as reported on the most recent applicable regulatory filing filed by the institution, that are more than 5 percent of total consolidated assets. . April 5, 2018 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

Summary: Volcker Rule Regulatory Harmonization Act (Sec. 2) This bill amends the Bank Holding Company Act of 1956 to grant exclusive rulemaking authority under the Volcker Rule to the Federal Reserve Board. (Currently, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Commodity Futures Trading Commission also have regulatory authority under the Volcker Rule. The Volcker Rule prohibits banking agencies from engaging in proprietary trading or entering into certain relationships with hedge funds and private-equity funds.) (Sec. 4) The bill exempts from the Volcker Rule banks with total assets: (1) of $10 billion or less, and (2) comprised of 5% or less of trading assets and liabilities.