Washington D.C. –U.S. Senator Katie Britt (R-Ala.) was the center of attention in an Senate Banking, Housing, and Urban Affairs Committee hearing and engaged in a sharp conversation with the leaders of the four regulators in federal government. The hearing included evidence from some of the most prominent people in the financial sector the Vice Chair of Supervision of the Federal Reserve, Michael Barr Chairman of the Federal Deposit Insurance Corporation, Martin Gruenberg; Chair of the National Credit Union Administration, Todd Harper; and Acting Comptroller of the Office of the Controller for the Currency, Michael Hsu.
The primary focus of Senator Britt’s question was on the recently announced Basel III Endgame rule, released jointly with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. In spite of the unanimous consensus among witnesses regarding the importance of the U.S. banking system, Senator Britt expressed concern about the possible implications of this proposed regulation, highlighting its potential to harm the banking sector.
Senator Britt specifically mentioned her concerns about “reckless rules-making initiatives” which she believes could negatively impact Main Street. She expressed concern over the absence of a solid explanation and analysis of the economics in the proposal, and noted that the federal financial regulators had not considered the cumulative effects of the other concurrent proposals for example, the long-term debt proposition and the debit fee cap.
In the course of the discussion during the exchange, Senator Britt confronted Vice Chair Barr regarding the long review period of the Basel III proposal and raised concerns about the quality in the analysis of economics that is incorporated into the rule. She sought clarification on the impact of proposal to impose operational risk standards for mortgages as well as small business loans and retail credit for consumers.
Vice Chair Barr said that Vice Chair Barr had assured senator Britt that a thorough analysis was conducted, stating that proposed modifications were minor with respect to the current regulations. However Senator Britt expressed her displeasure with the lack of attention of the different banking models of various banks and the lack of an extensive cumulative impact analysis.
