In a joint letter today to the leaders of the House Financial Services Committee and Senate Banking Committee, ABA and 51 state bankers associations urged lawmakers to demand an independent review of recent banking agency rulemakings to assess their appropriateness and effectiveness in addressing risks within the banking sector.
Congressional investigations into the causes of last year’s banking crisis remain incomplete, specifically regarding the appropriateness of the regulators’ post-failure actions and rulemakings, the associations said. The recent push for multiple regulatory changes—including those related to the Basel III endgame, long-term debt requirements and the FDIC governance proposal—allegedly stem from the failure of Silicon Valley Bank. However, these measures would not have prevented the bank failures, nor would they foster a broad-based, diverse U.S. banking system, they said. “We believe this regulatory tsunami is not a rational response appropriate to current circumstances and warrants scrutiny,” they added.
The associations noted that Sens. Jon Tester (D-Mont.) and Thom Tillis (R-N.C.) have called for an independent review, as has Federal Reserve Governor Michelle Bowman.
“Regulators should not impose yet another layer of regulation on numerous banks that had nothing to do with the failures and whose condition and management are clearly distinguishable from the banks that failed,” the associations said. “Any regulatory reforms should be evidence-based to safeguard the integrity and stability of our financial system. Regulators as well as banks should be held to high standards of accountability.”
