Regional lender Zions Bancorporation said on Dec. 16 that the Volcker Rule would force it to get rid of some prohibited holdings at a cost of about $387 million. Utah’s biggest bank would no longer be able to keep trust-preferred CDOs issued by banks and insurers until they mature, the Salt Lake City-based company said in a statement.
Zions owned $1.23 billion of bank-issued trust-preferred CDOs as of Sept. 30, the most among all U.S. banks, according to analysts at Sterne Agee & Leach Inc. About 3 percent of U.S. banks held similar CDOs and a sudden sale by Zions could roil the market, Sterne Agee said.
The case is American Bankers Association v. Federal Deposit Insurance Corp., 13-cv-02050, U.S. District Court, District of Columbia (Washington).