Volcker Rule Challenged in U.S. Court by Bank Group
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The final version of the Volcker Rule was challenged in a lawsuit over claims that requiring small banks to divest their holdings in some collateralized debt obligations will cause them about $600 million in losses.
The American Bankers Association, which represents mostly community banks, objects to a portion of the rule that will force lenders to get rid of CDOs backed by trust-preferred securities, according to the complaint filed yesterday in federal court in Washington. The association seeks a court order blocking the rule from taking effect before the end of the year.