A new effort is underway, spearheaded by House Financial Services Committee Chairman Spencer Bachus (R-AL), to preemptively water down the still missing-in-action final language of the Volcker rule.

The Volcker rule was supposed to be a centerpiece of the Dodd-Frank Act's effort to reign in financial institutions that, since the repeal of the Glass-Steagall Act, have vigorously blurred the distinction between commercial and investment banks. A July 21 deadline for a final proposal came and went.

The Volcker rule, as intended by Dodd-Frank, would prohibit U.S. bank holding companies and their affiliates from engaging in proprietary trading and sponsoring hedge funds and private equity funds. Regulators have struggled with distinguishing the gambles of prop trading from traditional market making and risk-reducing hedges.

Bachus is asking investors, financial industry professionals and the public to “offer their ideas and suggestions on how to formulate a less burdensome legislative alternative to the Volcker Rule” and established an e-mail for those recommendations: volckeralternative@mail.house.gov.

In an announcement of the plan this week, he explained that the Financial Services Committee will consider ideas it receives by a deadline of Sept. 7.  Those recommendations will be the subject of a hearing planned for the fall. Bachus says that hearing will be the Committee's “first opportunity to consider legislative alternatives.”

“If regulators implement the Volcker rule in its current form, the repercussions will be devastating to our economy,” Bachus said, echoing a common refrain of critics. “It will undermine our nation's ability to compete and make it harder for Main Street businesses to raise capital so they can grow and create jobs.”

Despite the new call for guidance, the public has hardly been shy about weighing in on the Volcker Rule. More than 16,000 comment letters have already been received by regulators.