The House Financial Services Subcommittee on Financial Institutions and Monetary Policy, chaired by Andy Barr (KY-06), is conducting a hearing titled "Regulatory Recipe for Economic Uncertainty: The Endless Basel Endgame and an Onslaught of Hurried Rulemaking Undertaken by the Administration."

Chairman Barr's opening remarks focused on the Basel III Endgame proposal from the Federal Reserve, FDIC, and OCC. He stated, "Today’s hearing is on the Basel III Endgame proposal by the Federal Reserve, FDIC, and OCC, as well as the onslaught of recent significant regulations from those agencies."

Barr acknowledged bipartisan efforts within the subcommittee but criticized the July 2023 Basel III Endgame proposal. "The initial and shockingly under-analyzed July 2023 Basel III Endgame proposal was met with criticisms from across the ideological spectrum," he said.

He highlighted that 97% of comments were negative, with 86% coming from outside the banking system. Barr noted that while the proposal was partly a response to March 2023 bank failures, most of it did not address interest rate risks.

Concerns about how these proposals would affect mortgage markets, tax credits, business models, and financial products were also raised. "We did so to identify the detrimental impact the proposal would have on our constituents," Barr explained.

Barr expressed uncertainty about the future of the Endgame proposal due to what he described as clumsy administrative procedures. He mentioned a speech by Michael Barr, Vice Chair for Supervision at the Federal Reserve, who indicated new proposals might modify those made in July 2023.

"While some of the previewed changes are encouraging," Chairman Barr remarked that significant work remains. He added that Vice Chair Barr's recommendations lacked detailed explanations despite claiming broad support within the Federal Reserve Board.

Further criticism was directed at perceived partisanship among regulatory agencies. Reports suggested partisan negotiations involving FDIC Chairman Gruenberg and CFPB Director Chopra. "Partisanship at our regulatory agencies and fouls in administrative procedures continue to weigh on providers of financial services," said Barr.

The chairman also addressed other significant rules proposed or finalized by these agencies covering long-term debt, brokered deposits, bank mergers, executive compensation among others. He expressed concern over rushing such proposals before national elections which could amplify uncertainty.

Barr concluded by emphasizing that regulators should implement laws serving constituents' interests rather than pursuing partisan goals.