Press Releases

All Financial Services Committee Republicans Demand Banking Regulators Withdraw Basel III Endgame Proposal

Washington, March 6, 2024 -

In advance of today’s hearing with Federal Reserve Chair Jerome Powell, Chairman Patrick McHenry (NC-10) and Financial Institutions and Monetary Policy Subcommittee Chairman Andy Barr (KY-06), led all Republicans on the House Financial Services Committee in a letter to Fed Chair Powell, Acting Comptroller of the Currency Michael Hsu, and Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg. Republicans are demanding that the regulators withdraw their fatally flawed Basel III Endgame proposal due to insufficient economic analysis, transparency, attention to stakeholder input, and bipartisan agreement. The lawmakers also urge Biden’s banking regulators to ensure rigorous quantitative analysis and greater transparency accompany any future efforts to implement any elements of the proposed framework.

Read the lawmakers’ letter to banking regulators here or below: 

“We write regarding your agencies’ Basel III Endgame proposal (the proposal), the largest proposed rewrite of capital rules for financial institutions since the Dodd-Frank Act. We recommend that the proposal be withdrawn and that your agencies identify clear objectives and well-supported justifications for any implementation of the Basel III Endgame framework. Any new proposal should be supported by rigorous quantitative analysis, be issued first as an advance notice of public rulemaking, and then proceed through the rulemaking process with transparency that has been lacking with the existing proposal.

“As you are aware, we are not alone in making such a recommendation. The proposal has received an unprecedented number of comment letters. More than 97 percent of these comments call for withdrawal, a re-proposal, or otherwise expressed significant concerns with the overall proposal or significant elements. Those comments came from across the ideological spectrum and from a broad base of sectors and constituencies. This broad-based opposition makes clear that it is not just the banking industry crying wolf against heightened capital requirements.

“As issued, the proposal lacks justification, lacks rigorous quantitative analysis, and is procedurally flawed. Recognizing these weaknesses, your agencies extended the comment period for the proposal by more than 45 days to January 16, 2024. Likewise, your agencies belatedly issued a detailed information request from the firms that will be affected by the proposal during the open comment period.

“It is now unclear how the agencies will proceed or what the timeline may be for further development of the proposal. To begin, there has been little clarity or transparency with Congress or the American people as to when or how the agencies will release the information collected from the banks or seek comment on whatever future analysis your agencies conduct using that information. Without an opportunity to review the information or comment on the agencies’ analysis, Congress, the American people, and the regulated industry will be denied the opportunity to meaningfully participate in the rulemaking.

“More concerning, there have been reports that rather than meaningfully respond to the substantial public comments, your agencies will simply recalibrate the proposal. This would be viewed as a thinly veiled attempt to salvage a fatally flawed proposal and would open your agencies to criticism for rushing the process to avoid accountability under the Congressional Review Act.

“Finally, there has not been clear bipartisan support on the Federal Reserve Board or the Board of Directors of the Federal Deposit Insurance Corporation. It is critical to the legitimacy and independence of these agencies that they proceed through consensus-driven, bipartisan actions.

“Given the impact that the flawed proposal would have on the banking industry and the American economy, your agencies must provide greater clarity on what your plans are moving forward, and how you intend to take public comments into account. We believe that the right path forward is to withdraw this flawed proposal and encourage you to do so.”


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