Nashville Standard

United States Senator Bill Hagerty (R-TN) and Senator Tim Scott (R-SC), along with every Republican on the Senate Banking Committee, have called on financial regulators to withdraw the Basel III Endgame proposal to raise bank capital requirements. In a letter addressed to Federal Reserve Chair Jerome Powell, FDIC Chairman Martin Gruenberg, and Acting Comptroller of the Currency Michael Hsu, the Senators expressed their concerns about the lack of a thorough economic analysis justifying the proposal and its potential impact on access to credit and financial services.

The Senators pointed out that the agencies have failed to provide sufficient economic analysis to support the need for the proposal. They emphasized that their concerns have not been alleviated since their last letter and that the November 14 and December 6, 2023, Senate Banking Committee hearings have only strengthened their belief that the proposal is flawed and should be withdrawn.

During the December 6 hearing, the CEOs of the eight largest banks in the nation testified about how the proposal would hinder economic growth and reduce lending to households and businesses. The Senators also highlighted concerning testimonies about the negative impacts the proposal would have on minority communities, particularly LMI and minority borrowers.

The Senators raised questions about the Federal Reserve's handling of the proposal, noting that the agency began additional data collection in October 2023, suggesting that it did not appropriately consider the impacts of the proposal initially. They expressed their concern about the lack of opportunity for the public to weigh in on the results of the data collection and the adequacy of the released data for independent analysis.

In conclusion, the Senators urged the regulators to withdraw the Basel III Endgame proposal as written and called for a more transparent and justified approach from the Federal Reserve, FDIC, and OCC.

The full text of the letter can be found [here](link).