Banking regulators have failed to provide the proper analysis or data to justify the need for proposed capital standards for financial institutions with at least $100 billion in assets, and should withdraw the rulemaking as a result, a group of 39 Republican senators said today. In a letter to the Federal Reserve, FDIC and OCC, the senators said the proposed standards—which would implement the Basel III “endgame”—could have negative effects on affordable housing, lending, credit card access and home equity lines of credit.
“Similarly concerning, this proposal will ultimately put U.S. companies at a competitive disadvantage globally and could force U.S. companies to search for access to financial services from financial institutions abroad, rather than those here at home,” the senators said. “Moreover, the proposal disproportionately harms companies that are not publicly listed, who happen to be middle market, private entities and our millions of small businesses across the country.”
The senators noted that federal regulators recently extended the deadline for public comment on the proposal, which came after ABA and other organizations said the agencies did not publicly disclose the data and analyses on which the rulemaking is based, as required by law. Still, the extended comment period and data collection is “too little, too late,” the senators said. “Accordingly, we urge you to withdraw the Basel III endgame proposal as written and urge the Federal Reserve, the FDIC and the OCC to operate in a more transparent and justified manner,” they added.