The chairman of the House Financial Services Committee is urging federal banking regulators to extend the comment deadline on Basel III capital reforms for another 90 days to give bankers more time to digest the rules and better assess their impact.
"As you know, this rule is extremely complex, so additional time for commenting is certainly justified," Rep. Spencer Bachus, an Alabama Republican, wrote in a letter Thursday to Federal Reserve Chairman Ben Bernanke. "Additionally, I feel the longer comment period will lead to more substantive comments, which in turn will be more useful to reviewers."
The Fed, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency jointly issued three notices of rulemaking in June and are accepting comments through Sept. 7. The proposal would increase minimum levels of required capital for all banks with more than $500 million of assets, narrow the definition of capital and require banks to hold more capital against certain mortgage-related assets.
Rep. Bachus' request came a day after Frank Keating, the president and chief executive of the American Bankers Association, wrote in an Investor's Business Daily op-ed that the rules, as written, would threaten the U.S. housing market and drive investors away from banks.
Keating also said that the rules are too broad and urged regulators to revise them in such a way "that recognizes and accommodates the differences between small banks, large banks and many in between."
The ABA is also asking its members to write to regulators urging them to extend the comment deadline. The trade group said that the letters should be in bankers' own words because regulators tend to "dismiss form letters."
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