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Lawmakers Ask Regulators to Withdraw Basel III Proposal
A group of 39 Republican Senators, including Sens. Deb Fischer and Pete Ricketts, wrote to banking regulators to urge them to withdraw the Basel III Endgame proposal. According to the Senators, the proposal "would create severe, adverse impacts on the entire U.S. economy, from everyday American consumers to the small businesses that are the backbone of our economy." They said regulators have not provided analysis or data to justify the proposed capital standards which would apply to financial institutions with over $100 billion in assets.
Rep. Mike Flood joined 16 other Republican members of the House Financial Services Committee in a similar letter. They raised concerns about the proposal's effect on the housing market. "The increased capital for residential mortgages will increase borrowing costs and reduce the availability of credit to families trying to achieve homeownership and build wealth," the representatives said.
Read the Senate Letter
Read the House Letter
Federal Reserve Report Highlights Robust Banking Sector
The Federal Reserve's recent biannual report to Congress on banking supervision and regulation indicates a generally sound banking sector. Most banks have capital levels exceeding regulatory requirements, and recent earnings performance aligns with pre-pandemic levels. The report notes that some banks have seen significant declines in the fair value of fixed-rate assets due to rising interest rates in the past two years. Despite rising loan delinquencies in certain segments, overall, banks maintain ample liquidity with limited dependence on short-term wholesale funding. The returns on average assets and equity for the first half of 2023 surpass their 10-year averages.
Read the Report
2024 Regulatory Thresholds Announced
Banking regulators recently announced adjustments to thresholds for 2024, including an increase in the threshold for higher-priced mortgage loans subject to special appraisal requirements from $31,000 to $32,400. Additionally, the dollar thresholds determining consumer credit and lease transactions subject to Regulation Z and Regulation M requirements will rise to $69,500. The Dodd-Frank Act mandates special appraisal requirements for higher-priced mortgage loans, with a new exemption threshold of $25,000 or less, effective Jan. 1, 2024. The Consumer Financial Protection Bureau (CFPB) is also amending Regulation V to establish a maximum charge of $15.50 for consumer reporting agency disclosures in 2024.
Mortgage Loan Threshold
Regulation Z Threshold
Regulation M Threshold
Regulation V Disclosure Charge
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