WASHINGTON, D.C.— Phillip Basil, Director of Economic Growth and Financial Stability at Better Markets, issued the following statement on the filing of a comment letter to the Federal Reserve Board, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation regarding a proposal to reduce the community bank leverage ratio capital requirement: 

“The banking agencies under this administration clearly do not care about community banks or the economic growth of the communities they serve. While this proposal from the Fed, OCC, and FDIC lowers capital requirements for certain community banks, those requirements still will be more than twice as high as the requirements for the largest banks. This type of upside-down policy making will result in even more concentration and fragility within the banking system and less focus on Main Street borrowers. 

“Far more than the large banks, community banks support the real economy, including small businesses, households, and farms. They already face an unlevel playing field that’s tipped heavily in favor of big banks. That is now getting much worse, especially with capital requirements. The largest, most complex banks should have the strongest capital requirements – much stronger than for community banks – because they engage in the riskiest activities and their relative size poses substantial risk to the banking system and financial stability. 

“The banking agencies must stop their top-heavy regulatory favoritism. Community banks need a regulatory framework that levels the playing field and supports them as much as they support our local economies.” 

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.