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[Washington D.C., 1/12/24] – The National Bankers Association (NBA), the leading trade association representing the country's minority depository institutions (MDIs), has submitted comments below expressing concerns about the potential unintended consequences of the Basel III proposed rulemaking. The joint proposal by the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve System (FRS) aims to enhance the regulatory capital rules for large banking organizations and those with significant trading activity.

While supporting the objective of strengthening the safety and soundness of the banking system, the NBA is apprehensive about the impact of the proposed changes on the cost of banking services for American households and businesses, particularly those in underserved and minority communities. The association emphasizes the unique role its member institutions play in providing access to financial services, mortgages, and small business loans to low- and moderate-income (LMI), minority, and underserved communities.

As the proposal's impact extends beyond banks with over $100 billion in assets, the NBA stresses the interconnectedness of MDIs with larger banks and their dependence on investments from these institutions. The association warns that the proposal's sweeping consequences could discourage large banks from investing in MDIs and community development financial institutions (CDFIs), potentially pushing financial services and risk outside the regulated banking system.

The NBA points out the recent joint Community Reinvestment Act (CRA) rule as a positive step in expanding areas for financial institutions to receive credit, benefiting many underserved communities. However, the association is worried that the proposed Basel III changes might undermine the positive impacts of the CRA rule, hindering MDIs' ability to contribute to community development.

Highlighting the importance of maintaining a balance between safety and soundness and consumer access and affordability, the NBA urges the regulatory agencies to consider the potential adverse effects of the Basel III proposal on marginalized communities.

About National Bankers Association 

Founded in 1927, the National Bankers Association is the voice for the nation's Minority Depository Institutions (MDIs). No other trade association focuses solely on the priorities, federal advocacy, and representation of minority-owned and -operated banks. Members include Black, Hispanic, Asian, Pacific Islander, Native American, and women-owned and -operated banks. MDIs are located across 32 states and territories. For more information, visit nationalbankers.org.