On April 7, the Federal Reserve Board issued a statement that it intends to exercise its authority to give banking entities two additional one-year extensions to conform their ownership interests in, and sponsorship of, certain collateralized loan obligations (CLOs) covered by federal regulations implementing Section 619 of the Dodd-Frank Act, the so-called Volcker Rule. Section 619 generally prohibits insured depository institutions and their affiliates from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge fund or private equity fund. The Board previously adopted rules for the conformance period for covered funds—including CLOs—and at that time extended the conformance period for all activities and investments by one year, to July 21, 2015. But to ensure effective compliance, the Board plans to grant banking entities two additional one-year extensions, until July 21, 2017. These extensions only apply to CLOs that were in place as of December 31, 2013 and do not qualify for the exclusion in the final rule for loan securitizations. The Board’s decision was challenged during a House Financial Services Committee hearing the following day, in which several lawmakers argued that Congress never intended for the Volcker Rule to cover securitizations, including CLOs. The lawmakers urged the Federal Reserve to address the issue by amending the rule to exclude or grandfather in CLOs, rather than by extending the conformance period.