March 03, 2023

Banking Committee Republicans Urge Fed to Follow the Law on Capital Review

Washington, D.C. – Banking Committee Republicans, led by Ranking Member Tim Scott (R-S.C.), today wrote to Federal Reserve Board Chair Jerome Powell expressing concerns over the Federal Reserve’s “holistic” review of capital, and reminded the Chair that capital requirements must be risk-based and tailored to an institution’s activity, size, and complexity.

From the letter:

“In 2018, the bipartisan Economic Growth, Regulatory Relief, and Consumer Protection Act (S.2155) was enacted to address the overly broad and overly prescriptive implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, also known as Dodd-Frank. As the Vice Chair of Supervision, Mr. Barr should adhere to the letter and spirit of the tailoring provisions as enacted by Congress. Reports of regulators’ efforts to unwind those tailoring reforms are concerning and do not comply with the law.”

“Members of this Committee must be fully informed and provided robust analysis. Furthermore, in your role as Chair of the Federal Reserve, it is incumbent on you to oversee any such review to ensure that the Federal Reserve’s work is consistent with the law, the risks, and the commonsense principles that support tailored capital requirements and the continued availability of a broad swath of financial services for everyday Americans.”

The letter was signed by Ranking Member Tim Scott (R-S.C.) and Senators Mike Crapo (R-Idaho), Mike Rounds (R-S.D.), Thom Tillis (R-N.C.), John Kennedy (R-La.), Bill Hagerty (R-Tenn.), Cynthia Lummis (R-Wyo.), Katie Britt (R-Ala.), Kevin Cramer (R-N.D.), and Steve Daines (R-Mont.).

Read the full letter here.