Regulators May Open Leveraged-Lending Rules for Comment

According to a recent Reuters article, U.S. regulators said they are open to revising restrictions on leveraged lending.

In a series of letters to Representative Blaine Luetkemeyer (R-MO), Chairman of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, the three main U.S. bank regulatory agencies, the Office of the Comptroller of the Currency, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC), said they may revisit the guidelines they put in place in 2013. Some in the industry have said that these guidelines hamper business, with members of Congress pressing for a rollback shortly after Trump's inauguration, says Reuters.

According to a Wall Street Journal article, Federal Reserve Chair Janet Yellen told Mr. Luetkemeyer on December 5th that the central bank is "considering soliciting public comment on the [leveraged lending] guidance in the near term with a view to improving the clarity of the guidance and reducing any unnecessary burden."

Then-acting Comptroller of the Currency Keith Noreika wrote Mr. Luetkemeyer on November 16th saying, "I favor soliciting further public comment on the Guidance in the near term. We would then revise the guidance as necessary to reduce ambiguity and promote additional transparency."

"The FDIC is open to soliciting further public comment on the Leveraged Lending Guidance and revising it as appropriate to reduce ambiguity and promote additional transparency," FDIC Chairman Martin Gruenberg wrote Mr. Luetkemeyer on December 5th.

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