A working nonprofit Occupy group, Occupy the Securities and Exchange Commission (SEC), has submitted a 325-page letter to agencies involved in the rulemaking process for the Volcker Rule. Formulated by experts in corporate law and finance, the letter provides public comment on regulations proposed by a subsection of the 2010 financial reform Dodd-Frank Act.
Known collectively as the Volcker Rule, the regulations put limits on financial companies by prohibiting speculative bets with shareholder money that could put the banks and taxpayers at risk. The SEC has proposed methods of implementation for the measure and has requested public comment.
"This country’s governing principles of transparency and due process mandate that any rules implemented by our regulators comport with the democratically elected legislature’s intention to protect the people from the widespread banking abuses and excesses of the recent past." - Occupy the SEC letter“This country’s governing principles of transparency and due process mandate that any rules implemented by our regulators comport with the democratically elected legislature’s intention to protect the people from the widespread banking abuses and excesses of the recent past,” the Occupy SEC authors state in their letter. “We believe the Volcker Rule is important to the future of the banking industry and, if strongly enforced, will help move our financial system in a more fair, transparent and sustainable direction.”
A working group of Occupy Wall Street, Occupy the SEC met on a biweekly basis at a Volcker Rule Book Club where concerned citizens, activists and financial professionals discussed independent sections of the rule and drafted a comment letter. The letter has drawn attention in the media over the past week, with Slate Magazine, Mother Jones, Bloomberg the Wall Street Journaland CounterPunch covering the group’s efforts.
“I wasn’t sure if financial regulatory comment letters really got much coverage, but it’s pretty promising,” said Caitlin Kline, co-author of the letter and former derivative trader at an investment bank for a Feb. 17 Law.com article.
A core group of seven Occupy the SEC members met and reviewed the bill over the course of several months and held calls with SEC staff to clarify questions posed by regulators. After spending six weeks writing and drafting the final product, they answered 244 of the 395 questions asked by the agencies about the rule’s language and implications.
The group asks the Securities Exchange Commission (SEC), Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve and the Office of the Comptroller of the Currency (OCC) to consider the comments in their letter.
“The Agencies involved in the Volcker rulemaking process have an historic opportunity to redress many of the economic wrongs of the past and create a future that privileges the interests of the many rather than the few,” the group pleads on its website. “We ask that the agencies vigorously implement the considerable responsibilities that have been discharged to them by Congress, remain faithful to the statute’s intent and consider the comments contained in this letter.”
Along with the request to toughen Volcker rule restrictions and clarify the subsection’s language, the authors argue that compliance and risk management ought to be central to the industry and that compliance officers need to be compensated.
The group hopes for a meeting with the SEC and will possibly comment on the U.S. Commodity Futures Trading Commission’s (CFTC) version of the Volcker Rule, according to a Feb. 14 Wall Street Journal article by blogger Victoria McGrane.
“One of our themes is that compliance is very, very important, and the best thing would be a culture that actually respected it, where it was able to do the job that it’s supposed to do,” said Kline in the Law.com article. “It’s one of the most important regulatory tools that exists within banks, and it needs to be treated that way.”
Diana Petrova can be reached at email@example.com.