Banks are pressing US policymakers for a multi-year delay of a rule requiring them to sell investments in private equity and venture capital funds, the latest industry push to scale back a central provision of the 2010 Dodd-Frank law.

Bank officials, trade groups and lawmakers are quietly lobbying the Federal Reserve to grant a reprieve of up to seven years from a provision that limits banks' investments in private equity and venture capital funds, according to people familiar with the effort. Absent action by the Fed, the critics warn, banks will be forced to sell their stakes in these funds at fire-sale prices by next summer, when firms are expected to begin complying with the rule.