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Lawmakers press regulators to index thresholds and rework Basel III to protect community banks
Summary
At a House Financial Services hearing, members pushed the Federal Reserve, OCC and FDIC to index prudential thresholds to inflation or GDP, recalibrate Basel III provisions and avoid 'gold‑plating' that could raise capital costs and restrict lending for community banks.
Chairman Sherwin Hill opened the hearing saying the committee’s goal is to reduce ‘‘duplicative or untailored burdens’’ on banks and ‘‘make community banks ... great again.’' The committee pressed regulators on several measures intended to modernize prudential oversight and preserve credit availability for Main Street borrowers.
Vice Chair Michelle Bowman of the Federal Reserve told the panel that the Fed is reviewing its tailoring framework and is “evaluating indexing the thresholds” as part of a broader modernization of the capital and supervisory regime. ‘‘Indexing is a critical part of the regulatory framework,’’ Bowman said, adding that the Fed is reviewing all four capital pillars, including the leverage…
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