What the government is proposing
The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) are pushing a proposal called "Basel III Endgame." Their plan orders banks doing business in Nevada to keep more money in reserve, up to 16-19 percent more, depending on their size.
As a result, banks might offer fewer products and services, such as mortgages, car loans, credit cards, and small-business loans.
Why is this happening?
Regulators claim their plan is vital to keep the financial system stable, but it's more likely to bring tough times and instability for families and small businesses.
Real consequences for Nevada
- Limited borrowing opportunities: If capital requirements for banks are significantly increased as proposed, they will be pressured to offer less financing to borrowers or offer it at a higher cost. The smaller borrowers are likely to be squeezed out – including small businesses, households, and consumers.
- Increased borrowing costs: The government's regulation may cause banks to treat small business loans as a higher risk. The regulation could mean banks will need to charge higher rates for small business loans.
- Credit crunch for minority-owned businesses: A recent survey underscores the worries of Hispanic and Black small business owners about securing loans to help their businesses grow, and explains that the “Basel III Endgame” proposal will exacerbate their challenges in obtaining credit.
What are Nevadans saying about these new regulations?
The Nevada Chamber of Commerce, along with over 100 local chambers of commerce across America, are calling on Washington to eliminate the "Basel III Endgame" banking rules to protect local businesses and consumers.
“One of the main reasons small businesses take on loans is to hire and retain workers. Higher capital requirements will likely lead to increased borrowing rates for privately held businesses, hurting their ability to hire workers and make investments.”
How can you help?
Post on your social media and contact your representatives. In your social media post, you can tag your members of Congress and urge them to call on federal regulators to repropose the rule.
Sample social media messaging:
Nevada businesses can't afford #BaselIII endgame. This proposal would be the endgame for Main Street Lending: https://www.uschamber.com/improving-government/nevada-businesses-and-consumers-face-challenges-from-new-banking-rules
What should be done?
Before going any further, the government must thoroughly investigate the economic impact of their proposal on Main Street and the impact on businesses' ability to access the resources they need to hire, grow, and succeed.
Bottom line
While new banking rules are created in DC, the government must recognize that their true impacts will be felt across Nevada along with communities and hometown businesses nationwide.
