The first legal challenge to the Volcker rule has emerged, with the American Bankers Association seeking emergency relief from a provision it claims will immediately hurt community banks, costing some millions of dollars. A Christmas Eve filing with the U.S. Court of Appeals for the District of Columbia requests a stay of agency action and the threat of additional legal action was made in a letter to bank regulators.
At issue is the inclusion of collateralized debt obligations backed by trust preferred securities (TruPS CDOs) under the Volcker rule’s definition of “covered funds.”
