U.S. Senators Katie Britt, Tim Scott, Mike Rounds, Colleagues Urge Federal Reserve to Issue Revised Basel III Endgame Rulemaking

WASHINGTON, D.C. - U.S. Senator Katie Britt (R-Ala.) joined Senate Banking Committee Chairman Tim Scott (R-S.C.), Senator Mike Rounds (R-S.D.), and nine of their colleagues in sending a letter to Jerome Powell, Chairman of the Federal Reserve Board of Governors, and Michelle Bowman, Vice Chair for Supervision, urging the Board to issue a revised final Basel III Endgame rulemaking.

"In assessing the final rule, we urge the Board to view capital requirements holistically," wrote the senators. "As part of this effort, the Board should endeavor to make sure that any proposal uses the baseline that existed before the post-pandemic capital ramp-up, not relative to today's elevated capital levels."

"Since 2020, aggregate common equity tier 1 ratios for large U.S. banks have increased by more than 20 percent. This rise was driven in part by the growth in the Board's balance sheet and the economy, not increased risk. Using current capital levels as the reference point would institutionalize excessive requirements, leading to higher costs and less access to capital for U.S. consumers and small businesses," continued the senators.

Senators Mike Crapo (R-Idaho), Thom Tillis (R-N.C.), John Kennedy (R-La.), Bill Hagerty (R-Tenn.), Cynthia Lummis (R-Wyo.), Pete Ricketts (R-Neb.), Kevin Cramer (R-N.Dak.), Bernie Moreno (R-Ohio), and Dave McCormick (R-Pa.) also joined the letter. You can read the full letter here.

Senator Britt has been active in voicing concerns over the originally proposed Basel III Endgame rule under the Biden Administration and its potentially devastating impact on our Main Streets. In a previous hearing, she highlighted the lack of economic analysis from the then-financial regulators to understand how the proposed requirements would impact the availability of mortgages, small business loans and retail credit to consumers. She also previously questioned Fed Chair Powell, pointing out that that the financial regulators had not considered the combined impacts of other concurrent proposals, while noting, the proposal would have had "a detrimental effect to our agriculture community and increase other costs providing food and fiber to our nation."

Since 2023, Senator Britt has emphasized that the originally proposed Basel III requirements could severely weaken the financial sector and put American financial institutions, community banks and small businesses at a disadvantage. The Senators' letter expresses support for the Board's work to finalize a new, revised rulemaking that "strengthens the resiliency of the U.S. financial system while preserving the efficiency and competitiveness of U.S. capital markets" and highlights necessary considerations for the reproposed rule.

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