Nevertheless, legal experts said they expect banks will find an opening for lawsuits, arguing that regulators violated the Administrative Procedures Act and did not give them enough time to comment on key changes to the rules. Kevin Petrasic, partner at Paul Hastings LLP, noted that bank lobby groups could challenge the rule, arguing that it isn't valid because there was a split among the agencies over how to write the rules.
Even though the agencies unified in approving a collective rule, some SEC and CFTC commissioners did push for stronger restrictions than those sought by bank regulators. But it's unclear how far the disagreement went and whether it could help a legal challenge.
A challenge to the Volcker Rule is likely to end up at the U.S. Court of Appeals for the D.C. Circuit. Challengers may be more wary about filing suit after an Obama nominee for the court, Patricia Millett, was confirmed by the Senate Tuesday afternoon in a vote of 56-38, within the context of a new congressional system that prohibits filibusters on presidential nominations and federal judge positions.
Millett's confirmation shifts the balance of power at the court: Of the active judges that carry a heavier workload, five are Democratic appointments and four are Republican.-- Written by Ronald Orol and Bill McConnell in Washington
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