Shelley Moore Capito (R-W.Va.), chairman of Financial Services’ Financial Institutions Subcommittee, and panel member Carolyn Maloney (D-N.Y.) yesterday urged the federal banking regulators to tailor the final Basel III capital requirements so that they’re appropriate for the wide range of institutions that comprise the U.S. financial system.
“We are concerned that the compliance costs of implementing the Basel III framework will force many [small] institutions that are not engaged in global banking to consolidate or go out of business altogether,” Capito and Maloney said in a letter.
The lawmakers also said they’re concerned that consumers ultimately will bear Basel III’s cost in the form of higher down payments and higher interest rates on residential mortgages.
ABA in its fall comment letter recommended that the agencies withdraw the Basel III standardized approach that contains unnecessarily complex risk-weighting calculations and other excessive details that aren’t needed to establish adequate capital levels.
Read the lawmakers’ letter.