Banks Seek to Limit Volcker With Challenge to Meaning of ‘Own’

U.S. banks are seeking to limit the reach of the Volcker Rule by challenging its definition of what it means to own a hedge fund or private-equity fund.

The opening gambit was made by the American Bankers Association, the industry’s biggest lobbying group, which said in a federal lawsuit filed last month on behalf of community banks that regulators had defined too broadly what it means to have an ownership stake. A week later, four other organizations, including the Financial Services Roundtable, sent a letter to bank-supervisory agencies making the same point.