The Federal Reserve, FDIC and Office of the Comptroller of the Currency should conduct a full, public study into the costs of their proposed capital requirements and re-propose the rule after the study’s results are released, the American Bankers Association and five business groups said Friday. In a joint letter to regulators, the groups said that short of a re-proposal, the agencies should extend the comment period on the proposal to 120 days after the study’s release.
The proposed rule would implement the “Basel III endgame” by putting in place stricter capital standards for banks with more than $100 billion in assets. The associations noted that banking agencies took more than five years to propose an implementation of the Basel accord, during which time they could have studied its effects on bankers, customers and the economy. “Instead, regulators improperly proposed to start that process during the comment period; even then, more than 60 days into that period, they have failed to send out the required template to conduct it,” they said. “Given the significant stakes for the U.S. economy, it needs to be rethought and restarted.”
“As the agencies have clearly acknowledged, this data collection and analysis is necessary to fully understand how much capital the proposed rule’s revised risk weights and other changes would require covered banks to hold, and thus is an essential prerequisite to the agencies properly and accurately weighing the relative costs and benefits of each aspect of the proposed rule and the rule as a whole,” the groups added.