The American Association of Bank Directors and the Independent Community Bankers of America are objecting to a provision in the Volcker Rule requiring banks to shed trust-preferred securities.
The groups wrote letters this week to federal agencies claiming that the rule seems to force banks to make accounting adjustments by the end of the year. The requirement, which would be enforced starting in July 2015, would lower community banks' capital to dangerous levels according to the groups.
"The American Association of Bank Directors also asked regulators to suspend the rule, as it applies to trust-preferred securities, until the guidance is reconsidered and finalized," writes American Banker's Andy Peters.
The final version of the Dodd-Frank Act's Volcker Rule, which bans proprietary trading by big banks, was issued last week.
For the full piece see "Volcker Rule a Threat to Small Banks, Industry Says" (may require subscription).