Today one of the most hotly debated provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) becomes effective. The Volcker Rule, Section 619 of the financial reform law, limits proprietary trading for taxpayer-backed banks. The rule’s implementation date comes five years after the originally scheduled date of July 2010.
The banking lobby mobilized an effective lobbying campaign against the Volcker Rule, including lawsuits contesting the regulation. Over the past five years, banks have successfully trimmed the rule’s requirements and obviously influenced several delays in the effective date. Despite all the anticipation, banks are largely prepared for the rule having already implemented the necessary compliance measures with many banks cutting riskier or non-compliant units all together.