A group of U.S. lawmakers recently joined the various government officials who are expressing their concerns about the impact of Basel III on community banks to industry regulators.
Maryland legislators, led by Democrat Steny Hoyer, minority whip in the House of Representatives, wrote a letter to the the Board of Governors of the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency saying that the community banks in the state bolstered their capital reserves after the financial crisis happened, BankCreditNews reports.
The letter voiced concerns from many community banks that the pending capital requirements would undermine the lending activities of the financial institutions and therefore detract from Maryland's economy, according to the news source.
The document stated that "specifically, community banks inform us that the proposed Basel III and Standardized Approach standards will require them to increase their capital and liquidity holdings dramatically on mortgage and small business loans, which will result in fewer and more costly home and business loans for Marylanders," the media outlet reports.
In addition to these lawmakers expressing concern, with Chuck Leyh, chairman of the Pennsylvania Association of Community Bankers, stating that most people working for these smaller lending institutions are opposed to "the whole concept" of Basel III, according to Pittsburgh Business Times.
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