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Today, the House Financial Services Committee is holding a hearing to examine newly released capital proposals from federal regulators, including Basel III, updates to the standardized approach, and changes to the GSIB surcharge. The hearing focuses on ensuring capital rules are appropriately tailored, support lending and economic growth, and keep U.S. financial institutions competitive globally.
Read Vice Chairman Huizenga's remarks as prepared for delivery:
"Good morning.
"Today's hearing will examine the recently released capital proposals from our prudential regulators concerning Basel III, the standardized approach, and the GSIB Surcharge.
"In March, the OCC, FDIC, and Federal Reserve released revised Basel III regulations aimed at updating U.S. bank capital requirements for the largest banks.
"These revisions respond to bipartisan and widespread concerns raised about the earlier 2023 proposal and attempt to refine how capital standards are applied across institutions.
"They also released a proposal that would make certain adjustments to the standardized approach capital rule, which applies generally to banks. Additionally, the Fed issued a proposal to adjust the capital surcharge applicable to global systemically significant banks, or G-SIBs.
"Right-sizing bank regulation is critical to ensuring that capital standards are appropriately tailored to risk and do not restrict lending by institutions that play a critical role in supporting our local economies. Capital requirements should promote investment, not compound on one another and impose capital levels well above what actual risk warrants.
"We must also pay special attention to America's competitive position on the world stage. The 2023 proposal contained requirements that diverged significantly from global standards, placing U.S. financial institutions at a disadvantage. This revised framework takes steps to realign U.S. requirements with international norms.
"American capital markets are the broadest and deepest in the world, and it is important that bank capital requirements promote their proper functioning. The prior administration’s overly punitive proposal would have had significant consequences for banks’ securities underwriting, derivative hedging, securitization, and equity investments in funds. The revised proposal does more to ensure that banks continue their crucial work as intermediaries and that risks flow to those most able to manage them.
"As we review these proposals, we must ensure they strike the right balance between preserving safety and soundness in our financial system while fostering the kind of economic growth that benefits every American.
"Committee Republicans have consistently advocated for a capital framework that works not just for regulators or large institutions, but for everyday Americans who depend on access to credit to buy homes, start businesses, and invest in their futures.
"For example, this revised proposal abandons the punitive mortgage risk weights from the 2023 proposal that drew bipartisan criticism from this committee, helping protect access to affordable home loans for American families.
"It is Congress’ responsibility to ensure these proposals are clear, appropriately targeted, and do not create unintended consequences that could ripple through our economy.
"With that, I look forward to hearing from our witnesses today, and I yield back."
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