Central Montana Times

U.S. Senator Steve Daines has joined every Republican on the Senate Banking Committee in calling on the Biden administration to withdraw the Basel III Endgame proposal. This proposal would raise bank capital requirements and has raised concerns about its impact on small businesses and access to credit.

In a letter sent to the Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency, Daines and his colleagues expressed their concerns about the lack of economic analysis justifying the proposal and its potential negative impact on access to credit and financial services.

Daines and his colleagues wrote, "As we noted in our November 12, 2023, letter to each of you, your agencies have still yet to justify the need for this proposal with any sufficient economic analysis or proof that the banking system is currently undercapitalized. Since we last wrote to you, our concerns have not been mitigated, and testimony from the November 14 and December 6, 2023, Senate Banking Committee hearings has only deepened our resolve that this proposal is flawed and must be withdrawn."

The senators also highlighted the concerns raised by CEOs of the eight largest banks in the country during a hearing, stating, "During that hearing and since, we continue to hear particularly concerning testimonies about the outsized negative impacts the proposal would have on minority communities, especially LMI and minority borrowers."

Furthermore, the senators raised concerns about the lack of adequate consideration given to the proposal's impacts, stating, "The Federal Reserve seemingly acknowledged that it did not appropriately consider the impacts of the proposal when it began an additional data collection in October 2023...How can we as legislators, or any of the American public, be asked to weigh in on a proposal, the effects of which the proposal's authors do not yet fully comprehend?"

Daines has been actively opposing this proposal, urging the Fed to withdraw it during the public comment period. He has also pressed the leaders of the nation's largest banks on the effects of the proposal on small businesses' borrowing capabilities.

This call to withdraw the Basel III Endgame proposal comes as concerns grow about the potential negative impact it could have on small businesses and access to credit. It remains to be seen how the Biden administration will respond to this letter and the concerns raised by Senator Daines and his colleagues.

Contact: Matt Lloyd, Rachel Dumke