Swap push-out law correction still needed despite Fed fix

Banks call for legislative action to fix section 716 of the Dodd-Frank Act, despite a move from the Fed to even up the treatment of foreign and domestic banks

A drafting error in the Dodd-Frank Act that creates a split in the treatment of foreign and domestic banks still needs to be corrected by legislation, despite intervention by the Federal Reserve last month to fix the problem, say banks.

The split results from the so-called swaps push-out rule – section 716 of Dodd-Frank – which prohibits any swap dealer from receiving federal assistance, including access to the Fed's discount window and guarantees from the Federal Deposit Insurance Corporation