Acting Comptroller of the Currency Keith Noreika said Wednesday that he expects regulators to release some kind of proposal to limit the impact of the Volcker Rule by next spring, though he cautioned that was a tentative timeline.

“That’s our aspiration,” Noreika said. “We’re at the stage of digesting the comment letters, putting together a broad outline of what a new rule could look like, and then that’s something all the agencies have to get together and agree on.”

His comments came after he delivered a speech to the Clearing House Association’s annual conference focusing on rethinking the longstanding barriers between banking and commercial activities. Noreika, who has occasionally butted heads with his follow regulators over policies, has previously said that the OCC could move forward on its own to make changes to the Volcker Rule, spurring fears of a disjointed effort between bank regulators.

Keith Noreika, acting Comptroller of the Currency
"We’re ... putting together a broad outline of what a new rule could look like, and then that’s something all the agencies have to get together and agree on," said acting Comptroller of the Currency Keith Noreika. Bloomberg News

But Noreika signaled that the agencies are largely working from the same playbook — namely the Treasury Department’s June report on banking regulatory reform — and thinks the differences between the agencies are relatively limited.

The primary sticking point, he said, is whether the regulators have enough evidence to support exempting small banks from Volcker compliance. Tucked into the Volcker Rule’s governing statute is a provision that allows the regulators to deem an activity “permissible” if it “would promote and protect the safety and soundness of the banking entity and the financial stability of the United States.”

Noreika said that regulators should at least try to demonstrate with data that small banks don’t need a Volcker compliance apparatus rather than assuming that such an exemption wouldn’t work. If a rule that, when applied to small banks, yields “only cost … and no benefit,” he said, then that could support such a determination.

“I think we’re all on the same page in what the statute says, when it can be applied,” Noreika said. “There’s a question of will there can ever be enough data to support using the exemptions, and I am of the view that we should actually ask the question of people to see whether they can give it to us, rather than take it totally off the table and not ask the question in the first place. That would go for things like the small-bank exemption.”

Noreika said the spring deadline was dependent on many things, including whether other regulators get on the same page. But he said that time frame is “achievable.”

“Many of them are getting in the right place, and others might come along later,” Noreika said. “Spring is probably what I would think is achievable and I don’t think we’ve set any firm deadlines, but that’s what I would expect."

Noreika also said that he expects the OCC, Federal Reserve and Federal Deposit Insurance Corp. to issue some “initial thoughts” on the leveraged lending guidance “in the next week or two.” In October the Government Accountability Office determined that the 2013 guidance document was a rule, making it subject to Congressional review and leaving the document in limbo until the agencies decide what to do next.

“We’re pretty much in the same place, and I do expect us to say something on it,” Noreika said. “I think you’ll see something, at least initial thoughts, in the next week or two, and then maybe more later.”

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