“The House Financial Services Committee approved legislation Friday that would lessen the impact on certain collateralized loan obligations from the Volcker Rule as part of a package of regulatory relief bills.

“The bill, which passed the committee with strong Democratic and Republican support, would grandfather many CLOs issued before February and clarifies the definition of commercial loan pools subject to the Volcker Rule going forward. It was one of five bills passed with strong bipartisan support, addressing issues ranging from Consumer Financial Protection Bureau mortgage rules to financing options for credit unions.

“The CLO legislation, introduced by Rep. Andy Barr, R-Ky., came after banks big and small cried foul over unintended consequences in the recent regulation implementing the Dodd-Frank Act provision. Some institutions have warned that without a legislative fix they will have to divest billions of dollars of their holdings in CLOs before next year’s effective date for the Volcker Rule. (The bill passed the committee by a vote of 53 to 3.)”

***

Read full American Banker article here.