WASHINGTON – Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, today joined Ranking Member Sen. Tim Scott (R-S.C.) and all other Republican colleagues on the Banking Committee in urging the Biden administration to withdraw the Basel III Endgame proposal. 

Financial regulators will appear before the committee Tuesday to answer questions regarding what impact regulations, such as the Basel III Endgame Proposal, have on Americans. 

“We have serious concerns that, as proposed, Basel III will restrict billions of dollars in capital from those who need it most, resulting in costlier and more limited access to credit for millions of Americans. This would create severe, adverse impacts on the entire U.S. economy, from every day American consumers to the small businesses that are the backbone of our economy,” the senators wrote.  

“Ultimately, these large increases in capital have not been shown to be evidentially based as the Federal Reserve, FDIC, and OCC have failed to provide proper analysis or data to justify their merits, particularly around the costs they will impose throughout all sectors of the economy,” they said.

The lawmakers highlighted concerns that the proposal would affect affordable housing, mortgage lending, small business lending, consumer lending, limit the availability of access to credit cards and home equity lines of credit and put U.S. companies at disadvantage to foreign competitors.

“As American consumers continue to struggle with persistently high inflation, reduced access to affordable homeownership, and a slowing economy driven by the reckless spending of the Biden administration, any proposed changes to our bank regulatory framework must be based on demonstrable benefits and needs, not pre-determined agendas which will only serve to harm the economy and consumers alike. 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 concluded. 

Background:

• In July, the Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation issued a joint notice of proposed rulemaking for revising bank capital requirements, known as Basel III Endgame.

• Revisions to capital requirements in the proposal come from changes to international capital standards, which the Basel Committee on Banking Supervision in Switzerland issued in response to the 2007-2009 financial crisis.  

• Regulators intend to apply their rule to banks with over $100 billion in assets, which will impact the largest banks in the U.S. and change how they conduct lending and trading. 

Sens. Mike Crapo (R-Idaho), Mike Rounds (R-S.D.), Thom Tillis (R-N.C.), Bill Hagerty (R-Tenn.), Cynthia Lummis (R-Wyo.), J.D. Vance (R-Ohio), Katie Britt (R-Ala.), Kevin Cramer (R-N.D.), Steve Daines (R-Mont.), Mitch McConnell (R-Ky.), Chuck Grassley (R-Iowa), John Cornyn (R-Texas), Lindsey Graham (R-S.C.), John Thune (R-S.D.), John Barrasso (R-Wyo.), Roger Wicker (R-Miss.), James Risch (R-Idaho), Jerry Moran (R-Kan.), John Boozman (R-Ark.), Mike Lee (R-Utah), Deb Fischer (R-Neb.), Shelley Moore Capito (R-W.Va.), James Lankford (R-Okla.), Tom Cotton (R-Ark.), Joni Ernst (R-Iowa), Dan Sullivan (R-Alaska), Todd Young (R-Ind.), Cindy Hyde-Smith (R-Miss.), Marsha Blackburn (R-Tenn.), Mitt Romney (R-Utah), Mike Braun (R-Ind.), Roger Marshall (R-Kan.), Tommy Tuberville (R-Ala.), Markwayne Mullin (R-Okla.), Ted Budd (R-N.C.), Eric Schmitt (R-Mo.) and Pete Ricketts (R-Neb.) also signed the letter.

The full letter is available here.