A set of proposed rules – called “Basel III Endgame” – would increase the amount of capital banks need to hold. This means banks would have fewer funds for lending and financing.
Why it matters: These proposed changes could shake things up for businesses across Main Street America, as small and medium-sized companies could find it much harder to access the credit they need to grow, try out new ideas, or hire more staff.
Skepticism from all sides: This week, the U.S. Chamber hosted Republican and Democratic Members of Congress, alongside a sitting Federal Reserve Board Governor, to uncover the potential negative effects of the proposed rules as part of the Chamber’s “ Protect Main Street Lending” initiative.
What they’re saying:
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Farmers, ranchers, and agricultural producers use financial tools to manage price fluctuations. Federal Reserve Governor Michelle Bowman notes that stricter banking rules could make these tools more costly and less accessible for them, stating “the increased cost of providing these services from the [Basel III] proposal could lead banks to limit their ability availability.”
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“There’s going to have to be a lot of refinancings at higher rates,” noted Rep. Andy Barr (R-KY), in light of rules that may raise capital requirements and could lead business tenants to reconsider their commercial real estate leases.
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“There’ll be all kinds of unanticipated effects,” said Rep. Bill Foster (D-IL), referencing concerns that new banking rules may result in private small businesses facing higher loan costs than their larger public counterparts.
Our take: Your Cheyenne Chamber is constantly monitoring regulations that could negatively impact our businesses. It’s imperative to beat back regulations that could stifle small business innovation and expansion.
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