Five federal regulatory agencies today finalized a rule modifying the Volcker rule's prohibition on banking entities investing in or sponsoring hedge funds or private equity funds-known as covered funds. The final rule is broadly similar to the proposed rule from January.

The Volcker rule generally prohibits banking entities from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge fund or private equity fund.

Like the proposal, the final rule modifies three areas of the rule by:

• Streamlining the covered funds portion of rule;
• Addressing the extraterritorial treatment of certain foreign funds; and
• Permitting banking entities to offer financial services and engage in other activities that do not raise concerns that the Volcker rule was intended to address.

The rule will be effective on October 1.

COVID-19 VIDEO SERIES: FROM CBI MEMBERS

Jackie Haley and Dickinson Law Attorney Ben Bruner discuss legal challenges and opportunities community banks are currently facing in the COVID-19 pandemic environment. (9:03)

The Fed said it will apply the restrictions during the third quarter of 2020 and might extend them on a quarterly basis. The agency said that while the banking system has been a source of strength and all large banks are sufficiently capitalized, its actions are designed to preserve capital and bolster oversight.

CBI's newest Affiliate member and Featured COVID-19 Services Provider Abrigo will hold a CBI member-exclusive webinar on their solution to PPP process automation, next Tuesday, June 30 at 2:00-2:45 pm CDT.

Over the last few months, lenders across the country have dropped everything to assist small businesses through the Paycheck Protection Program. The origination process was a fast moving, ever-changing machine that required long days and nights to participate. Now as the origination piece is slowing, institutions are turning their attention towards the forgiveness process of these PPP loans. For many, the thought of committing the same amount of time and resources (or more) towards the forgiveness piece of the PPP process isn't reasonable or possible.

Community Bankers of Iowa is proud to partner with Abrigo in an effort to help our members navigate this difficult time. This 45-minute webinar is designed to view the solution in its entirety, as well as learn about any updates to PPP legislation.

Click here to register.

Bank Security & Compliance Issues

The pandemic forced many banks to implement work from home procedures in a hurry. As restrictions are eased, and workers return to the office, it is very important to review how those work from home policies could have impacted bank security and compliance with rules protecting data and your client information. Banks must consider the security implications and recognize the risk of permitting network access from outside of the secure perimeter of their internal networks.

Read more.