MBA Statement on the Interagency Proposed Rule on Bank Capital Requirements
July 27, 2023
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WASHINGTON, D.C. (July 27, 2023) — MBA Bob Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA), issued the following statement regarding the interagency proposed rule released today for the final implementation of the Basel III international regulatory framework:
“Without significant revisions, this proposal will increase borrowing costs and reduce credit availability for the very consumers and borrowers this administration ostensibly seeks to assist. The large increases in capital standards will likely stunt macroeconomic growth and reduce banks’ participation as single-family and commercial/multifamily lenders, servicers, and providers of warehouse lines and mortgage servicing rights financing.
“Given ongoing affordable housing challenges, regulators should be taking steps that encourage banks to better support real estate finance markets. These proposed changes do precisely the opposite during a time of near record-low single-family delinquencies and pristine underwriting. This proposal also undermines several current policy objectives, from closing the racial homeownership gap to promoting competition over consolidation.
“The agencies did not take appropriate steps before releasing this proposal, including issuing an advance notice of proposed rulemaking. Furthermore, capital rules of this magnitude should be accompanied by a quantitative impact study to assess the macroeconomic and sector impacts. This has been done with previous Basel-related reforms and should be done here. Experience with such significant capital changes tells us that equity markets will react immediately, and banks will respond to that pressure in real time, long before the final rule is issued.
“MBA strongly opposes key aspects of this proposal and will work with our members and other industry stakeholders to formulate our full response, which will include recommendations to mitigate the adverse impacts to borrowers and single-family and commercial/multifamily markets.”