Skip to main content


January 3, 2014

The trouble with TruPS

In the opening salvo against a new rule banning proprietary trading, the banking industry is refighting an old battle.

Since the 2008 financial crisis, regulators and Congress have made clear they no longer like so-called trust-preferred securities, or TruPS, and banks have struggled with how and when to get them off their books.

Now the issue is rearing its head in the first legal challenge to the Volcker Rule, which is again putting a focus on securities that regulators once blessed and then scorned.

“’It is another aggressive attempt by the regulators to address this issue, and they were not prepared for the fallout and backlash that they were going to get,’ said Paul Merski, the executive vice president for congressional relations at the Independent Community Bankers of America.


Supporters of the proprietary trading ban argue the losses are not big when spread across all the banks, particularly when Zions Bank, which has about $55 billion in assets, would most likely eat up a lot of that number. The bank said last month that it expects the provision to lead to an after tax charge of $387 million for reclassifying its CDOs as available for sale. According to SNL Financial, Wells Fargo and Citigroup are also top holders of TruPS.

“’This is a teeny, weeny issue,’ said Dennis Kelleher, president of financial reform advocacy group Better Markets. ‘It looks to me like it’s just an excuse to bash the Volcker Rule and an excuse to pretend big banks are community banks.'”


Read full Politico Pro article here (subscription required)

In the News


For media inquiries, please contact us at or 202-618-6433.

Contact Us

For media inquiries, please contact or 202-618-6433.

To sign up for our email newsletter, please visit this page.

This field is for validation purposes and should be left unchanged.

Sign Up — Stay Informed With Our Monthly Newsletter

"* (Required)" indicates required fields

This field is for validation purposes and should be left unchanged.

For media inquiries,

please contact or 202-618-6433.


Help us fight for the public interest in our financial markets, protecting Main Street from Wall Street and avoiding another costly financial collapse and economic crisis, by making a donation today.

Donate Today