Subject: File No. S7-02-20
From: Charles Z. Silverman
Affiliation: Volunteer legal aid lawyer

April 3, 2020

Federal bank regulators should not further weaken restrictions against banks engaging in risky investments with government-backed tax-payer backed deposits under Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. There should be a clear separation between commercial and investment banking. Wall Street financial institutions should only be allowed to use government-backed taxpayer-backed deposits to provide loans to businesses and consumers. Those funds should never be used to engage in risky speculation, such as investing in high-risk startup firms, venture capital funds, hedge funds, private equity funds, credit funds and family wealth management vehicles. If financial institutions wish to engage in reckless speculation, they should be required to use their own investors money - to avoid the moral hazard that arises when those institutions engage in risky and reckless transactions, knowing that they will be protected against the risk by tax payers. As you well know, risky trading with deposits backed by government guarantees contributed to the 2008 financial crisis.

The Volker Rule should be strengthened, not weakened, The excuse proffered by banking regulators that the present rule has created compliance uncertainty and imposed limits on banking services and activities that it did not intend to restrict is absurd. If there are compliance uncertainties, they arise from the failure of the SEC and other regulators to promptly enact proper regulations and provide helpful guidance. Furthermore, Congress clearly intended to prohibit the use of government-backed tax-payer deposits in risky investments.

Judging from the history of federal regulators' inexcusable delay in taking timely and appropriate steps to enact regulations required by the Volker Act, the steady and consistent attempts to dilute the effect of the Volker Rule, and the often silly excuses for failing to comply with the letter and the spirit of the Rule, I don't expect the SEC, Federal Reserve, FDIC, OCC or the U.S. Commodity Futures Trading Commission to do the right thing here - but at least you have my opinion.