Republicans on the U.S. Senate Banking Committee are calling on federal financial regulators to withdraw their proposal to raise bank capital requirements.
The Republican members of the committee, led by Ranking Member Sen. Tim Scott (R-SC), sent a letter to the Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency outlining their objections to the proposal.
Among their objections, the lawmakers cited the failure of the agencies to provide a thorough economic analysis justifying the proposal’s merits. They also called out regulators for not addressing concerns that the proposal will impact the ability for some consumers to access credit and financial services.
“As we noted in our November 12, 2023, letter to each of you, your agencies have still yet to justify the need for this proposal with any sufficient economic analysis or proof that the banking system is currently under capitalized. Since we last wrote to you, our concerns have not been mitigated, and testimony from the November 14 and December 6, 2023, Senate Banking Committee hearings has only deepened our resolve that this proposal is flawed and must be withdrawn,” the letter stated.
Along with Scott, the letter was signed by Sens. Mike Crapo (R-ID), Mike Rounds (R-SD), Thom Tillis (R-NC), John Kennedy (R-LA), Bill Hagerty (R-TN), Cynthia Lummis (R-WY), JD Vance (R-OH), Katie Boyd Britt (R-AL), Kevin Cramer (R-ND), and Steve Daines (R-MT).
“Following the November 14 hearing, on December 6, 2023, we heard testimony from the CEOs of the eight largest banks in this nation, which largely discussed how the proposal would hinder economic growth and reduce lending to households and businesses … During that hearing and since, we continue to hear particularly concerning testimonies about the outsized negative impacts the proposal would have on minority communities, especially LMI (low-to-moderate income) and minority borrowers,” they continued.
In November, nearly 80 percent of the Senate Republican conference urged the Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency to withdraw the proposal. They reiterated that request in this letter.
“With today’s closure of the public comment period, we urge you to consider the negative impacts we have come to learn about the proposal and reconsider your agency’s approach. Accordingly, we once again urge you to withdraw the Basel III Endgame proposal as written and implore the Federal Reserve, the FDIC, and the OCC to operate in a more transparent and justified manner,” the letter concluded.