BPI Supports Main Street Capital Access Act

Dear Chairman Hill, Ranking Member Waters and Members of the Committee:

The Bank Policy Institute (BPI) is writing in support of the Main Street Capital Access Act, which incorporates a series of critical reforms to rationalize the banking system's regulatory framework and promote responsible and expanded access to credit across the U.S. economy.

This legislation thoughtfully advances many provisions that BPI has previously supported and that enjoy broad industry backing as well as bipartisan support. These include measures that tailor regulation to a firm's size, risk and business model; streamline supervisory processes to ensure fair and predictable oversight; and modernize the merger review framework to reflect today's competitive financial landscape. Taken together, these reforms will help ensure that the banking agencies can direct regulatory efforts where they are necessary, while freeing up banks to serve their communities and Main Street businesses nationwide.

In particular, BPI commends the inclusion of provisions that:

• Realign regulatory tailoring to right-size capital, liquidity and risk management requirements with the size and complexity of an institution as well as update regulatory tailoring thresholds set in S. 2155 to account for economic growth.
• Promote greater transparency and accountability in bank supervision, including improvements to the MRA/MRIA process and the CAMELS rating system as well as ending the use of reputational risk by bank examiners.
• Advance stress testing reforms by directing the Fed to make scenario design and modeling assumptions subject to notice and comment, and thus make them more transparent and accurate.
• Update bank merger review standards to ensure consistency with the requirements of the law as well as providing fairness and timely decision-making for bank merger applicants.

These reforms are essential to supporting a vibrant, competitive and innovative banking sector-one that can continue providing affordable credit for consumers and the long-term investment needed for economic growth.

We commend Chairman Hill's leadership in advancing these commonsense proposals together as a package and look forward to working with you and the Committee as the legislation moves forward.

Sincerely,

Bank Policy Institute