Bi-partisan Group of US Senators Urge Banking Regulators to Protect Community Banks

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Criticizing implicitly notices of proposed rulemakings with respect to new capital requirements, on September 27, 53 US Senators from both parties urged federal banking regulators to consider the "unintended consequences and their effect on the viability of community banks across the country." The letter, addressed to Federal Reserve Board Chairman Ben Bernanke, Acting FDIC Chairman Marty Gruenberg and Comptroller of the Currency Tom Curry, admonished the regulators that community banks “are different from many larger institutions in size and scope, and we do not see the value in requiring them to adhere to regimes designed to manage larger and more complex risks. The proposed [Basel III] rules could make it even harder to raise needed capital. Community banks may change their business plans as a result of the rules, thereby reducing lending and economic growth in the communities in which they serve."

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