Why I'm voting for Volcker Rule: CFTC's Chilton

Chilton: Volcker Rule ultimately 'good for markets'

The Volcker Rule could have unforeseen consequences, but it's needed to protect consumers and the economy from banks making "wild flyer bets that are just for the house," outgoing CFTC Commissioner Bart Chilton told CNBC before casting his vote.

The Commodities Futures Trading Commission, the Federal Reserve, the Securities and Exchange Commission, and two other U.S. agencies are expected to approve the rule Tuesday.

If approved, the final version would become effective April 1, 2014, according to a joint press release issued Tuesday morning, with the Fed extending the conformance period until July 21, 2015.

Banks have been fighting this part of the Dodd-Frank Wall Street reforms since the law passed in 2010.

(Read more: Volcker Rule, curbing bank risk-taking, nears vote)

"These things are never perfect so there may be something we don't anticipate," Chilton told "Squawk Box." But "if we're going to err one way or another, I think we want to err on the side of protecting the economy and protecting consumers."

It will ultimately be good for the financial markets, he argued.

(Read more: Why I'm voting no to Volcker: SEC commissioner)

In a statement, Chilton detailed other aspects of the expected rule that he supports, including that market making will be allowed under certain circumstances but not for speculative reasons.

He also wrote, "On portfolio hedging: One of the changes that has been made is that we have defined what a portfolio is NOT—it can't be some amorphous set of excuses for doing a trade. ... You can't do an after-the-fact extract of a set of trades as a rationale for a hedge."

Chilton, a Democrat, said the text makes it clear that "big bonuses and rewards in banking should not be tied to flyer bets."

While these activities didn't directly cause the 2008 financial crisis, Chilton told CNBC, they do present "systemic risks." He added that the rule does "allow legitimate hedging activity for legitimate [defined] business risk."

By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC. Reuters contributed to this report.