On the recordJanuary 13, 2015
I thank the chairman. It will keep the Volcker rule completely intact, and simply provide phased-in compliance to banks of all sizes that made sound investment decisions, allowing the finite universe of well-performing legacy CLOs to be sold or paid off over an added 2 years rather than forcing these legacy CLOs into a fire sale. The proprietary trading ban is retained entirely for all new CLO issuances. So in conclusion, there has been a lot of talk about deregulation. As for the canard that deregulation was to blame for the financial crisis, that story line has been thoroughly debunked. The crisis was caused by the government's own housing policies, which fostered the creation of 25 million subprime and other low-quality mortgages, almost 50 percent of all the mortgages in the United States that defaulted at unprecedented rates. In contrast, CLOs were not the root cause of the crisis. CLOs performed very well during the crisis. Regulators have many tools to ensure bank CLOs do not pose financial risks. CLO AAA or AA notes, in fact, have never defaulted. I urge my colleagues to support this commonsense Main Street jobs bill.
