U.S. Chamber of Commerce Letter to President Biden on Basel III

The President
The White House
Washington, DC 20050

Dear Mr. President:

The undersigned chambers of commerce and businesses across the United States are concerned about the proposed rule known as the “Basel III Endgame” that would substantially increase capital requirements on covered U.S. banks and make capital and credit more expensive for businesses of all shapes and sizes. Small and mid-size businesses, who are the drivers of economic growth, are more reliant on bank financing than other sectors of the economy. If enacted, the Basel III Endgame rule would make financing prohibitively expensive for businesses in the midst of an already challenging environment.

We ask that you urge federal banking regulators to study the costs of and then repropose the Basel III Endgame rule given it stands to hamstring access to capital and credit, the essential lifeblood that fuels the vitality of every business.

A recent Chamber survey of 300 treasurers and financial decision-makers revealed that 68% of business owners believe that a net increase in bank capital requirements could be detrimental to their business. Furthermore, the survey found that an alarming 87% of businesses have been negatively impacted by cost increases resulting from financial regulation, including 46% of companies that have delayed or canceled planned investments or capital expenditures due to financial regulations.1

Small businesses could see the most adverse impacts under the Basel III Endgame rule. Notably, companies that are not publicly traded are disproportionately affected through higher assigned risk weights relative to publicly traded competitors, despite similarly strong credit quality, requiring banks to hold additional capital on the loans made to small businesses. Approximately 99 percent of all U.S. companies are privately held and employ roughly half of all private sector employees. 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. These costs could in turn be passed on to consumers and put downward pressure on economic growth and employment. Other parts of the rule, particularly the capital requirement for operational risk, will also have adverse downstream impacts on small businesses’ ability to access credit and wealth management services.

Policymakers must carefully consider the potential adverse effects of the Basel III Endgame rule, especially for the small business customers of banks. We implore policymakers to refrain from advancing a rule that will further constrain small businesses and further complicate an already challenging economic environment.

Thank you for your consideration and we stand ready to discuss these issues in greater detail. 

Sincerely, 

National
The U.S. Chamber of Commerce 

Alabama 
Business Council of Alabama 

Arizona 
Apache Junction Area Chamber of Commerce 
Arizona Chamber of Commerce & Industry 
Chandler Chamber of Commerce 
Greater Flagstaff Chamber of Commerce 
Greater Phoenix Chamber 
Lake Havasu Area Chamber of Commerce 
Mesa Chamber of Commerce 
Nogales-Santa Cruz County Chamber of Commerce 
Queen Creek Chamber of Commerce 
Tucson Metro Chamber 

California 
Antelope Valley Chambers of Commerce 
Buellton Chamber of Commerce 
California Business Roundtable 
Carlsbad Chamber of Commerce 
La Verne Chamber of Commerce 
LA Area Chamber of Commerce 
Long Beach Area Chamber of Commerce 
Murrieta/Wildomar Chamber of Commerce 
Oceanside Chamber of Commerce 
Palos Verdes Peninsula Chamber of Commerce 
San Francisco Chamber of Commerce 
Silicon Valley Leadership Group 
Simi Valley Chamber of Commerce 
Torrance Area Chamber of Commerce 
Yorba Linda Chamber of Commerce 

Colorado 
Vail Valley Partnership 

Delaware 
Delaware State Chamber of Commerce 
The New Castle County Chamber of Commerce (Delaware) 

District of Columbia 
DC Chamber of Commerce 
Independent Petroleum Association of America 

Florida 
Florida Chamber of Commerce 

Georgia 
Georgia Chamber of Commerce 
Metro Atlanta Chamber 

Idaho 
Boise Metro Chamber of Commerce 
Jerome Chamber of Commerce 

Illinois 
Chamber630 
Edwardsville/Glen Carbon Chamber of Commerce 
Greater Rockford Chamber of Commerce 
Joliet Region Chamber of Commerce & Industry 
The Greater Springfield Chamber of Commerce 
West Suburban Chamber of Commerce & Industry 

Indiana 
Indiana Chamber of Commerce 
South Bend Regional Chamber 

Iowa 
Quad Cities Chamber of Commerce 

Kansas
Greater Topeka Chamber 

Kentucky 
Greater Louisville Inc. - The Metro Chamber of Commerce 
Kentucky Chamber of Commerce 

Maine 
Barry County Chamber and Economic Development Alliance 

Maryland 
Harford County Chamber of Commerce 
Maryland Chamber of Commerce 

Michigan 
Battle Creek Area Chamber of Commerce 
Detroit Regional Chamber 
Michigan Chamber of Commerce 
Oscoda AuSable Chamber of Commerce 

Minnesota 
Minneapolis Regional Chamber 
Minnesota Chamber of Commerce 
St. Paul Area Chamber 

Montana 
Helena Area Chamber of Commerce 
Montana Chamber of Commerce 

Nevada 
Henderson Chamber of Commerce 
Vegas Chamber 

New Jersey 
New Jersey State Chamber of Commerce 

New York 
Brooklyn Chamber of Commerce 
Capital Region Chamber 
Manhattan Chamber of Commerce 
The Business Council of New York State 

North Carolina 
NC Chamber 

North Dakota 
Greater North Dakota Chamber 

Ohio 
Ohio Chamber of Commerce 
Willard Area Chamber of Commerce 

Oregon 
Canby Area Chamber of Commerce 
Gresham Area Chamber of Commerce 
Keizer Chamber of Commerce 
Lake County Chamber of Commerce 
Lincoln City Chamber of Commerce 
Oregon Business & Industry 
Portland Metro Chamber 
Roseburg Area Chamber of Commerce 

Pennsylvania 
Greater Latrobe Laurel-Valley Regional Chamber of Commerce 
Hanover Area Chamber of Commerce 
Huntingdon County Chamber of Commerce 
Mercer Area Chamber of Commerce 
Pennsylvania Chamber of Business and Industry 
Schuylkill Chamber of Commerce 

Texas 
Coppell Chamber of Commerce 

Virginia 
Virginia Chamber of Commerce 

Washington 
Association of Washington Business 
Burlington Chamber of Commerce 
Greater Spokane Valley Chamber of Commerce 
La Conner Chamber of Commerce 
Mercer Island Chamber of Commerce 
Moses Lake Chamber of Commerce Puyallup Sumner Chamber Puyallup Sumner Chamber 
Shelton-Mason County Chamber of Commerce 

Wisconsin 
Wisconsin Manufacturers & Commerce 

Wyoming 
Campbell County Chamber of Commerce 
Casper Area Chamber of Commerce  
Riverton Chamber and Visitors Center 
Wyoming State Chamber of Commerce 

 1 U.S. Chamber of Commerce, How Business Views Financial Challenges: Basel III & Beyond (October 2023), https://www.uschamber.com/assets/documents/CCMC_Survey-FinancialChallenges_Fall2023.pdf