WASHINGTON — The top Democrat on the Senate Banking Committee called on the Federal Reserve Thursday to complete its proposal to limit banks' involvement in commodities markets.

Sen. Sherrod Brown, D-Ohio, said in a letter to Fed Chair Janet Yellen that the central bank has thus far "failed to live up to [its] commitment" to protect consumers from the potential systemic risk associated with bank holding companies' exposure to volatile commodity markets.

"The recent disruptions in various markets underscore the risks commodities present for" bank holding companies," Brown wrote. "Given there is no way to predict how long the supply and demand imbalances across the commodity markets will persist or how severely they will impact the banking sector, it is past time for the board to propose rules for BHC commodity-related activities. I am concerned that the Board has failed to live up to this commitment."

The Federal Reserve declined to comment on the letter. But Fed. Gov. Daniel Tarullo said in an interview on Bloomberg TV in November that work on the rule was continuing but that there were a number of technical challenges and the agency was being careful not to stifle the markets with its rulemaking. What is more, Tarullo said, "a lot has been accomplished just through our talking about this regulation."

"Many of the banks have pulled back or disposed of some of their commodities operations," Tarullo said. "And there, again, we want to be partly careful with commodities because a lot of the nonfinancial users of bank commodity business put comments in and said, make sure you don't stop them from doing things that are helpful to us."

After the passage of the Gramm-Leach-Bliley Act in 1999, bank holding companies could expand their holdings to include areas related to their existing businesses. Many large institutions — including JPMorgan Chase, Citigroup, Morgan Stanley, Goldman Sachs and Bank of America — began acquiring commodity market infrastructure like metal warehouses, oil storage facilities, tankers and pipelines, arguing that it was related to their existing commodity trading businesses.

But wildly fluctuating prices for energy and metals in the intervening decade, as well as high-profile charges of price manipulation by some of the banks, spurred calls for the restrictions to be reinstated.

The Fed in 2014 issued an advance notice of proposed rulemaking outlining a case for limiting bank holding companies' activity in various commodity markets.

In its proposal, the Fed reasoned that a bank's potential liability associated with an environmental or natural disaster like the 2010 Deepwater Horizon oil spill could pose a danger to the bank's financial health, and therefore a risk to the financial system. Tarullo said in late 2014 that a proposal was expected sometime in early 2015. Yellen said in February 2015 that it would likely be complete by the end of the calendar year.

But by the time the Fed published the advanced proposal, many banks were already exiting the market. JPMorgan reached a deal to sell its entire commodities unit in March 2014 for $3.5 billion. Deutsche Bank and Barclays announced similarly broad retrenchments in their commodities activities as early as 2013. With oil prices slumping to well under $50 per barrel for more than a year — and with expectations that it will stay there for the next year, at least — more banks are looking at their commodity assets as a source of stress rather than a source of value.

But Brown said in his letter that this volatility, rather than a reason to delay a rule, is an example of why banks should not be involved in the commodities business at all, and called on the agency to complete the rule.

"Now, in February 2016, the board has still taken no action despite repeated assurances it would do so," Brown said. "I urge you to do so without any further delay."

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