This bill tweaks the fine print of the Volcker Rule—part of a law designed to bar banks from making risky trades with their own money.
The bill focuses on high-risk CLOs, or collaterized loan obligations, issued before January 31, 2014. CLOs are complex securities that bundle together corporate loans and bonds. The majority are held by large U.S. banks.
Under the bill, banks and financial companies that own CLOs and are regulated by the Federal Reserve would have until July 2019 to comply with the Volcker Rule with regards to their CLOs.