In response to industry and congressional concerns over the Volcker Rule’s treatment of trust preferred securities held in collateralized debt obligations, federal agencies on Thursday released a frequently asked questions document attempting to provide bankers with further clarity. However, the agencies did not satisfactorily address bankers’ questions.

Accountants and banking law experts have expressed the view that CDOs backed by TruPs are considered “covered funds” subject to the Volcker Rule’s restrictions. If so, banks holding TruPS CDOs may need to sell their ownership interests, often at a significant loss, and many banks will need to book those losses on their financial statements by the end of 2013. Publicly held banks face an earlier deadline as they must disclose material accounting events to investors.

The agencies said in their FAQ that nothing in the Volcker Rule requires banks to sell their holdings in TruPS CDOs immediately; rather, they said, banks have until July 21, 2015 to divest themselves from covered funds. The agencies did not address bankers’ accounting-related concerns and responsibilities, which would force banks to write down the value of their TruPS CDO investments in the current quarter, regardless of when they plan to sell them between now and 2015.