The House passed a bill Friday that would give the Federal Reserve exclusive authority to write rules on enforcing the proprietary trading ban known as the Volcker Rule.

The bill passed 300-104, with 78 Democrats joining the Republican majority to revise the ban enacted by the 2010 Dodd-Frank Act and originally proposed by former Fed Chairman Paul Volcker.

Like the Senate regulatory relief bill that would make targeted changes to Dodd-Frank, the House provision would exempt community banks with under $10 billion in assets and less than 5% of their assets tied to trading. But it would go further by consolidating regulatory authority for the Volcker Rule with one agency.

House Financial Services Committee Chairman Jeb Hensarling
"If we're going to have a Volcker Rule, one of the most complicated, complex rules ever designed by the mind of man, why don't we have one agency to enforce it?" said House Financial Services Committee Chairman Jeb Hensarling. Bloomberg News

While many analysts believe Congress will enact the Senate's version of reg relief, House Republicans have wanted to negotiate with the upper chamber to attach some additional bills passed by the House.

"If we're going to have a Volcker Rule, one of the most complicated, complex rules ever designed by the mind of man, why don't we have one agency to enforce it?" House Financial Services Committee Chairman Jeb Hensarling said before the passage of HR 4790.

Currently, five agencies are tasked with implementing the ban on proprietary trading, including the Fed, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Rep. Maxine Waters. D-Calif., urged Democrats to oppose the bill, saying that Republicans "have not learned the lessons of the financial crisis at all" and that consolidating authority with the Fed is a gift to the big banks, which would still have to comply with the ban.

"This is not about community banks, this is about the megabanks," Waters said.

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