H.R. 4096, Investor Clarity and Bank Parity Act

H.R. 4096

Investor Clarity and Bank Parity Act

Sponsor
Rep. Michael E. Capuano

Date
April 26, 2016 (114th Congress, 2nd Session)

Staff Contact
John Huston

Floor Situation

On Tuesday, April 26, 2016, the House will consider H.R. 4096, the Investor Clarity and Bank Parity Act, under suspension of the rules. H.R. 4096 was introduced on November 19 2015, by Rep. Michael Capuano (D-MA), and was referred to the Committee on Financial Services, which ordered the bill reported by voice vote on March 2, 2016.

Bill Summary

H.R. 4096 amends Section 619 of the Dodd-Frank Act Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), also known as the Volcker Rule to correct a statutory error that the five federal regulators charged with implementing the Volcker Rule (the Federal Reserve, the Securities and Exchange Commission , the Commodity Futures Trading Commission, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation) cannot fix with their regulatory authority to permit a covered fund —to share the same name as an insured depository institution or its affiliate.

Background

The Volker Rule imposed severe limitations on the ability of bank holding companies and their affiliates, which would include investment advisers, to sponsor hedge funds and private equity funds (also known as covered funds).[1] The final rule provides that the covered fund may not share the same name with the banking entity (or an affiliate or subsidiary thereof), nor can the covered fund use the word “bank” in the name. H.R. 4096 eliminates this naming prohibition and simply allows an affiliate of a bank holding company, such as an investment adviser to share a similar name with a covered fund.

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[1] See CRS Report, “The Volcker Rule: A Legal Analysis,” March 27, 2014.

Cost

The Congressional Budget Office (CBO) estimates that any additional administrative costs, as a result of enacting H.R. 4096, to the Federal Reserve would be insignificant. CBO estimates that enacting H.R. 4096 would affect direct spending and revenues, therefore pay-as-you-go procedures apply. However, CBO estimates that the net effects would be insignificant for each year.

 

Additional Information

For questions or further information please contact John Huston with the House Republican Policy Committee by email or at 6-5539.