In response to Federal Reserve Board Vice Chair for Supervision Michael Barr’s comments today at the Brookings Institution on the future of the Basel III Endgame proposal, Ranking Member Tim Scott (R-S.C.) issued a statement.

“For the last year, I have been consistent in my position that the Federal Reserve’s Basel III Endgame proposal will lead to higher costs and limited access to credit for hardworking Americans. Our financial regulators have yet to justify these changes and provide a comprehensive cost-benefit analysis. Today’s announcement only underscores that this proposal should be withdrawn and properly re-proposed in its entirety. I will be closely monitoring these developments and look forward to engaging with the financial regulators directly,” said Scott.

As the top Republican on the Senate Banking Committee, Scott has led Senate Republicans in opposing the controversial Basel III Endgame proposal. In March 2023, Banking Committee Republicans expressed their concern over the Federal Reserve’s “holistic” review of capital in a letter, reminding Federal Reserve Chair Jerome Powell that capital requirements must be risk-based and tailored to an institution’s activity, size, and complexity.

In November 2023, Scott and 38 of his Republican colleagues urged the Federal Reserve (Fed), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) to withdraw the Basel III Endgame proposal. The letter argued that the proposal lacks proper analysis or data to justify its merit, would result in costlier and more limited access to credit for Americans, and would negatively impact the U.S. economy. They also highlighted the resilience of the well-capitalized U.S. banking system and emphasized that regulatory changes should be based on demonstrable benefits and needs rather than pre-determined agendas.

In a December 2023 appearance on Squawk Box, Scott remarked: “The question is, you think about Basel III, the Endgame, how is a higher capital standard going to make our economy healthy or safer? The answer is – it does neither. Therefore, having more regulations will not actually make our economy healthier and it will not make our banks safer. So why would we go down a road of what I consider a nightmare of regulatory burdens that will restrict capital in the marketplace which means fewer loans for small businesses, fewer homes for first-time buyers and strong challenge – headwinds – against the American Dream?”

In January 2024, Scott and every Banking Committee Republican continued their call for financial regulators to withdraw the Basel III Endgame proposal aimed at raising bank capital requirements. In a letter to federal agencies including Fed, FDIC, and OCC, they highlighted ongoing failures by these agencies to provide thorough economic analyses justifying the merits of their proposals or addressing concerns about impacts on access to credit.

During a March 2024 hearing, Scott reminded Chair Powell of bipartisan opposition from various sectors including community leaders, farmers, and housing groups. At another hearing in July 2024, he pressed Powell for transparency in rulemaking processes while reiterating calls for re-proposal of Basel III Endgame. Powell indicated then that he believed a revised proposal would need public comment.