Why I'm voting for Volcker Rule: CFTC's Chilton

Paul Volcker Interview Pic

The Volcker Rule could have unforeseen consequences, but it's needed to protect consumers and the economy from banks making "wild flyer bets that are just for the house," outgoing CFTC Commissioner Bart Chilton told CNBC before casting his vote.

The Commodities Futures Trading Commission and other U.S. agencies are expected to approve the rule Tuesday.

In a statement, Chilton said the rule won't be implemented before 2015, a widely expected move after regulators struggled for years to agree on the ban on proprietary trading-the practice of banks buying and selling for their own accounts.

Banks have been fighting this part of the Dodd-Frank Wall Street reforms since the law passed in 2010.

(Read more: Volcker Rule, curbing bank risk-taking, nears vote )

"These things are never perfect so there may be something we don't anticipate," Chilton told " Squawk Box ." But "if we're going to err one way or another, I think we want to err on the side of protecting the economy and protecting consumers."

It will ultimately be good for the financial markets, he argued.

(Read more: Why I'm voting no to Volcker: SEC commissioner )

Chilton's statement detailed other aspects of the expected rule, including that market making will be allowed under certain circumstances but not for speculative reasons.

He also wrote, "On portfolio hedging: One of the changes that has been made is that we have defined what a portfolio is NOT-it can't be some amorphous set of excuses for doing a trade. ... You can't do an after-the-fact extract of a set of trades as a rationale for a hedge."

Chilton, a Democrat, said the text makes it clear that "big bonuses and rewards in banking should not be tied to flyer bets."

While these activities didn't directly cause the 2008 financial crisis, Chilton told CNBC, they do present "systemic risks." He added that the rule does "allow legitimate hedging activity for legitimate [defined] business risk."

Public vote canceled

On Tuesday, the CFTC said it canceled a public vote on the issue because of the threat of a snowstorm in the Washington area. It was unclear whether the CFTC would schedule another meeting, or whether it would vote behind closed doors.

It was also unclear whether other agencies-including the Federal Reserve and the Federal Deposit Insurance Corporation-would hold their scheduled votes on Tuesday.

Details of the final rule will be disseminated by the agencies as scheduled at 9:30 a.m. EST.

-By CNBC's Matthew J. Belvedere . Follow him on Twitter @Matt_SquawkCNBC. Reuters contributed to this report.

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