Washington D.C. – U.S. Senator Katie Britt (R-Ala.) took center stage during a Senate Banking, Housing, and Urban Affairs Committee hearing, engaging in a pointed line of questioning with the heads of four federal regulators. The hearing featured testimony from key figures in the financial sector: Vice Chair for Supervision of the Federal Reserve, Michael Barr; Chair of the Federal Deposit Insurance Corporation, Martin Gruenberg; Chair of the National Credit Union Administration, Todd Harper; and Acting Comptroller of the Office of Controller of the Currency, Michael Hsu.
The focus of Senator Britt’s inquiry centered on the recently proposed Basel III Endgame rule, issued jointly by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. Despite unanimous agreement among the witnesses on the strength of the U.S. banking system, Senator Britt expressed concerns about the potential ramifications of the proposed rule, emphasizing its potential to weaken the financial sector.
Senator Britt specifically highlighted what she deemed “reckless rulemaking proposals” that, in her opinion, could adversely impact Main Street. She questioned the lack of a thorough justification and economic analysis in the proposal and pointed out that federal financial regulators had not considered the combined impacts of other concurrent proposals, including the long-term debt proposal and debit fee caps.
During the exchange, Senator Britt queried Vice Chair Barr about the extensive review period for the Basel III proposal and raised questions about the sufficiency of the economic analysis accompanying the rule. She pressed for clarification on the potential impacts of the proposed operational risk requirements on mortgages, small business loans, and retail credit to consumers.
Vice Chair Barr assured Senator Britt that a detailed analysis had been conducted, asserting that the proposed changes were minimal in relation to current rules. However, Senator Britt expressed dissatisfaction with the perceived lack of consideration for the varying business models of different banks and the absence of a comprehensive cumulative impact study.
