The interests in CLOs held by banking organizations of all sizes are no different than the direct loans banks regularly make to corporate borrowers. It is not sensible to cause banks to lose value on their investments through precipitous sales unnecessary for safety and soundness reasons. This legislation would address the potential for severe disruption in the market for CLOs that were offered before the regulators issued a final Volcker rule.
Read ABA’s memo on H.R. 4167.