The Chamber and others are looking for the three federal banking agencies to modify two proposed “tailoring” rules implementing the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) that Congress passed in April 2018. That law modified Dodd-Frank provisions. The parallel proposals create four categories of banks based on asset size. Liquidity, capital, and prudential standards in each category are “tailored” to reflect the size of banks in the four categories.

The Center for Capital Markets Competitiveness at the U.S. Chamber of Commerce points out that loans less than $1 million dropped from 2.5% of gross domestic product in 2001 to 1.7% in 2017. The Chamber states that the two aligned proposals are a “substantial improvement” over current liquidity, capital, and prudential regulations.

But they think midsize and regional banks, upon whom Main Street businesses depend, would be better off if, instead of asset size, financial institutions are grouped based on a multifactor assessment that considers size, interconnectedness, substitutability, complexity, and cross-jurisdictional activity. Under the two aligned proposals, regional and community banks would be placed in Category IV, banking organizations with at least $100 billion in total consolidated assets. The Chamber, in addition to other reservations, believes stress test requirements for Category IV haven’t been justified in the proposals.

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