Last week, federal and state policymakers sent letters to federal regulators urging a change in course with regard to proposed regulations to implement the Basel III capital accords. On October 17, U.S. Senators Sherrod Brown (D-OH) and David Vitter (R-LA) expressed concern that the proposed approach would not be sufficient to prevent another financial crisis and urged the federal prudential regulators to simplify and enhance capital rules that will apply to U.S. banks. Specifically, the Senators asserted that Basel III’s continued focus on risk-based capital ratios is too complex and opaque; instead the proposal should focus on “pure, loss-absorbing capital.” On the same day, the Conference of State Bank Supervisors (CSBS) encouraged the federal agencies to consider the impact of their proposal on the national and local economies. The CSBS argued that Basel III is intended only to apply to large, internationally active banks, and suggested that capital requirements for other U.S. banks should be set through a separate rulemaking. In a second letter, the CSBS commented on a related rulemaking regarding a standardized approach to risk-weighted assets. In that letter, the state supervisors expounded on their recent objection to the proposal as “reactionary” and “overly complex.” Earlier in the week, on October 15, Senate Banking Committee Ranking Member Richard Shelby (R-AL) objected to the rulemaking process and challenged the regulators to better explain (i) why the Basel III standards are appropriate for U.S. banks and how the regulators came to their determinations, and (ii) the impact on the U.S. baking system and the economy, including a detailed cost-benefit analysis. Also this week, other federal lawmakers, including Republican members of the House Committee on Financial Services, and the congressional delegations from Arkansas, Colorado, and Mississippi, submitted letters commenting on the proposals.