WASHINGTON, March 21 (Reuters) - A committee in the U.S. House of Representatives voted Wednesday to name the Federal Reserve as the primary regulator for the "Volcker Rule," which bars banks from speculative trading.
The bill, which was approved by the House Financial Services Committee by a vote of 50 to 10, would name the Fed as the primary Volcker Rule regulator, with the goal of streamlining the rule which is currently enforced by five separate regulators.
As 16 of the committee's Democrats joined with Republicans in supporting the bill, the degree of bipartisan support for the measure could suggest House lawmakers will endeavor to include it in a broader bill easing bank rules that previously passed the Senate. Large banks have aggressively lobbied Congress for relief from the Volcker Rule for months.
The attempt to alter the rule through Congress comes as regulators have already embarked on the task of rewriting the rule themselves, under a process that requires all five regulators to agree on changes.
The Volcker rule, finalized in 2013, following the Dodd Frank financial reform legislation passed in the wake of the 2008 financial crisis, restricts U.S. banks from making certain kinds of speculative transactions on their own account and from investing in hedge funds.
Bank executives have complained that the current rule is confusing and difficult to follow, chilling trading activity that otherwise would be permitted.
Beyond giving the Fed sole authority to rewrite the rule, the legislation also would require the primary regulator for a particular financial firm to serve as the sole supervisor for Volcker rule compliance. Currently, all five regulators share supervision and enforcement authority, an arrangement banks have called unworkable.
The bill must be passed by the full House, the Senate, and signed by President Donald Trump before it becomes law. The bill also would exempt banks with less than $10 billion in assets from the Volcker Rule altogether.
Streamlining Volcker rule compliance has been a top priority for large banks which have pushed for it to be included in the Senate bill easing bank rules, which is pending in the House.
However, Representative Jeb Hensarling, who heads up banking policy in the House, has insisted the Senate bill needs further changes, and is pushing for dozens of House bills that have received bipartisan support to be added to the measure.
The Volcker bill also appears to fit that requirement. (Reporting by Pete Schroeder; editing by Clive McKeef)