WASHINGTON, Dec 18 (Reuters) - A U.S. senator on Wednesday urged banking regulators to address some concerns from small and medium-sized banks about the Volcker rule after it was finalized last week.
Senator Mike Crapo, a Republican from Idaho, sent a letter to regulators on Wednesday asking them to help smaller firms figure out how to follow the Volcker rule without suffering major losses.
"I respectfully request that you issue prompt appropriate guidance to assist these firms in complying with the Volcker rule without having to divest these holdings at an exorbitant loss or having to spend millions of dollars to be in compliance," said Crapo, who is the top Republican on the U.S. Senate Banking Committee.
The American Bankers Association, an industry lobby group, sent a letter on Tuesday to the agencies behind the proprietary trading ban, saying the rules could have unintended negative consequences for banks with investments in trust preferred securities.
The agencies are working to provide clarity that could alleviate those concerns, a source familiar with the issue said. The clarifications likely would not involve changes to the final rules.
Regulators approved the final version of the Volcker rule, a requirement of the 2010 Dodd-Frank Wall Street oversight law, on Dec. 10 after years of work. The rules restrict banks' ability to trade with their own money and limit their investments in certain types of funds.
The rules do not officially take effect until 2015, but the bankers association said accounting rules mean banks would likely face losses sooner.
Several banks have already made changes they said were prompted by the new rule.
On Wednesday, Florida-based BankUnited said it was selling certain securities as a result of the rule.
Zions Bancorp of Utah said on Monday it expects to take a one-time charge of $387 million due to some investments it said were not allowed under the Volcker rule.