Bloomberg reported that the final version of the Volcker Rule was challenged in a lawsuit over claims that requiring small banks to divest their holdings in some collateralized debt obligations will cause them about $600 million in losses.

Bloomberg said The American Bankers Association objected to a portion of the rule that will force lenders to get rid of CDOs backed by trust-preferred securities, according to the complaint filed yesterday in federal court in Washington.

The association seeks a court order blocking the rule from taking effect before the end of the year, Bloomberg noted.

To read the Bloomberg story click here.

To read the American Bankers Association news release click here.