WASHINGTON, D.C.— Dennis Kelleher, Co-founder, President and CEO, issued the following statement in connection with the filing of Better Markets’ Comment Letter to the OCC, Fed and FDIC, urging them to adopt increased reporting requirements for bank loans to nonbanks.
“Today, gigantic global nonbanks have more than $200 trillion in assets, account for nearly half of all global financing activities, have more than $1 trillion in lending from US banks, are deeply interconnected with the banking system, and many are systemically significant, but there is grossly insufficient reporting, transparency, and regulatory oversight of those activities. All that amounts to a very serious threat to the financial system and economy. A new proposal from the banking agencies would address these dangers by requiring standardized and comprehensive reporting of direct nonbank loan exposures, off balance sheet exposures, and the performance of nonbank loans. These changes would improve the ability of regulators and the public to identify and address dangerous concentrations of risk that could jeopardize the safety, soundness, and stability of the financial system and our entire economy.
“The additional data collection adds value without adding significant cost or compliance burdens. The proposal largely involves standardizing more granular reporting of aggregate lending that banks already provide. Additionally, the proposed reporting requirements would only apply to banks with $10 billion or more in total assets, which hold most nonbank loans.
“In our comment letter, we also recommended several changes to strengthen the proposal, including urging regulators to remain vigilant of any outsized nonbank lending among smaller banks. These banks have been excluded from the reporting requirements, which we support, but we also recognize that they may be unfamiliar with the unique risks of nonbank lending. Increased regulatory monitoring would be prudent.”
Read our comment letter here.
###
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.
