In a joint letter submitted on Tuesday, seven prominent banking-trade groups have raised concerns over a 1,100-page proposal by U.S. banking regulators. The proposal, recently approved by the Federal Deposit Insurance Co. on July 27, seeks to mandate lenders to hold increased capital on their balance sheets. However, the groups argue that this proposal violates the Administrative Procedure Act.
According to the trade associations, the government’s proposal relies on undisclosed data and analysis that has not been made available to the public. This lack of transparency undermines the fairness of the public comment process, as it prevents meaningful engagement from stakeholders. When proposing a rule, agencies are expected to provide all relevant data and analysis so that the public can fully comprehend and respond to the rationale behind the proposed regulation.
To address this issue, the banking organizations urge the government to disclose all evidence and analyses used to develop the proposal. They also recommend that the rule be re-proposed with a new 120-day comment period to ensure comprehensive public input. This call for transparency and inclusivity comes from a diverse coalition of esteemed groups, including the Bank Policy Institute, the American Bankers Association, the Financial Services Forum, the Institute of International Bankers, the Securities Industry Association, the Financial Markets Association, and the U.S. Chamber of Commerce.
