Bill Would Exempt Existing 'TruPS' CDOs From Volcker Rule

Law360, Washington (January 8, 2014, 5:54 PM EST) -- A pair of senior House Financial Service Committee members on Wednesday introduced a bill to exempt existing collateralized debt obligations backed by so-called trust-preferred securities from the Volcker Rule, the Dodd-Frank Act's ban on proprietary trading by banks, following banking industry backlash.

The bill, H.R. 3819, titled the Fairness for Community Job Creators Act, specifically exempts CDOs issued before Dec. 10, 2013, and “predominantly” backed by trust-preferred securities — known as TruPS-backed CDOs — from divestiture under the Volcker Rule, the Dodd-Frank Act's ban on proprietary...
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