CBA Submits Comments and White Paper on Basel III Proposed Rule

To Whom it May Concern:

The Consumer Bankers Association (“CBA”) is America’s only member-driven trade association focused exclusively on retail banking.1 Since 1919, CBA has partnered with member banks to promote sound policy, prepare the next generation of diverse bankers to lead the industry, and enable consumers’ individualized approaches to the American dream.

We write to provide comment on the proposal by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency to implement the international agreement colloquially known as “Basel III Endgame” (the “Proposal”).

CBA believes it is necessary and important for banks to be adequately capitalized. However, excessive capital mandates limit growth and raise the cost of loans and other financial products. Inappropriately high capital standards will harm low- and moderate-income consumers and provide a competitive advantage to the less regulated shadow banking sector. Regulatory capital standards need to be established with these concerns in mind. Capital is an important tool to enhance bank safety and – along with appropriate macro-economic policies – can reduce the potential for future crises and mitigate their consequences when they occur, but it must be used carefully to avoid unintended consequences that would be harmful to financial inclusion and longer-term consumer financial resilience.

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