The group filed a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit, according to court papers.

The court filing, the first legal challenge to the Volcker rule, says the provision in question is, among other things, "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."

CB&T Bancshares Inc. and its Citizens Bank and Trust Co. subsidiary also signed on to the court filing, as did MBT Financial Corp. and its Monroe Bank and Trust Co. subsidiary.

Earlier in the day, Frank Keating, the chief executive of the ABA, wrote in a letter to regulators that the group would file a challenge seeking emergency relief.

An ABA spokesman said the two-page petition for review would be followed by more detailed papers, to be filed as early as Tuesday morning, that would outline the group's legal argument in greater detail.

At issue is a provision of the rule that prohibits banks from owning more than 3 percent of any individual hedge fund or private equity fund, and bars banks from investing more than 3 percent of their total equity capital in private funds.

The banks worry that the provision will force them to sell their interest in collateralized debt obligations backed by so-called trust-preferred securities, a type of security that has characteristics in common with equity and debt instruments.

The ABA's letter, sent to the heads of the Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp, is the latest back-and-forth public statements by the trade group and regulators.

It comes just a few days after the Fed, the OCC and the FDIC issued some guidance to the industry and told the banks they do not immediately need to sell off the assets in question.

Instead, the banks will have until July 2015 to decide whether their investments are permissible under the Volcker rule.

"The ABA has informed us of its intention to file suit. We will review the suit when it is filed, confer with the other agencies and determine a response," a Fed spokeswoman said.

Spokesmen for the FDIC and OCC both declined to comment.

Named for former Federal Reserve Chairman Paul Volcker, the Volcker rule was required by the 2010 Dodd-Frank Wall Street reform law. It seeks to limit the type of risk-taking by banks that got them into trouble in the 2007-2009 financial crisis.

Since the Volcker Rule was adopted on Dec. 10, some banks have already made changes.

Florida-based BankUnited Inc, for instance, said it was selling certain securities, while Zions Bancorp said it expects to take a one-time charge of $387 million due to some of its investments that are not allowed under the Volcker rule.