Regulatory implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA, P.L. 111-203) has brought trust preferred securities (TruPS) to congressional attention. The Volcker Rule (section 619 of the DFA), as issued in December 2013, may force banks to divest certain TruPS that they already participate in. Banks have asked Congress to address the treatment of TruPS under the Dodd-Frank Act, and have challenged agency rulemaking in court. This note describes TruPS and discusses related policy issues, including bank leverage and the relationship between banks and risky investment firms.
Date of Report: January 10, 2014
Number of Pages: 2
Order Number: IF00007
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Trust Preferred Securities (TruPS) – IF00007