"It was the banking regulators and not the market regulators who put out the FAQ. So you are putting the banks between two agencies, since the SEC requires financial reports to be done per [generally accepted accounting principals, or] GAAP, while the banking regulators have given the banks less than two weeks to figure it out," he adds.
Because of the banks' GAAP reporting requirements, the ABA in its court complaint said the agencies solution of having banks possibly restructure their CDOs backed by trust preferred securities so that they would not be considered "covered funds" under Vocker, is "no solution at all."
When the Volcker Rule was being touted before Dodd-Frank was signed by President Obama in July 2010, supporters said the rule was meant to curb the excess risks of the largest banks, while not hurting small community banks. This is what is "offensive" to Kaplan, who adds, "not only does it affect them, the consequences are so great, it can put some of them out of business."
The Federal Reserve, OCC and FDIC have until Monday to respond in court to the ABA's demand, which is cutting things rather close for year-end accounting decisions.
>Contact by Email.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts