I wanted to make sure you saw yesterday's coverage of the House Financial Services Committee hearing in POLITICO, which highlighted policymakers' concerns with Basel III Endgame. POLITICO reports:

Regulators face bipartisan Basel III concerns at House hearing

Democrats express worries about impact on increased capital requirements on home and renewable energy financing.

House Democrats aired concerns Wednesday over capital requirement increases proposed by Biden-appointed banking regulators, illustrating the bipartisan pressure on the agencies to change some aspects of the Basel III Endgame proposal.

Some Democrats at a House Financial Services hearing on the proposal said they were worried about how the requirements could affect mortgage lending, renewable energy financing and other issues, as Republicans on the panel continued to broadly bash the plan.

"I commend the regulators for trying to strengthen our banking system, but there are some poorly tailored regulations," said Rep. Brad Sherman (D-Calif.).

Rep. Sean Casten (D-Ill.) said he supports the overall aims of the rule, but raised concerns about how the proposed increased capital requirement for tax equity investments could affect renewable energy financing.

"Let's not pass the biggest climate bill in the history of any government anywhere that is meaningfully changing the deployment of clean energy in this country … and then cut it off at the knees," Casten said, referring to the Inflation Reduction Act. "Even though this is a small piece of the Basel III rules, it’s a big deal for the clean energy industry."

In yesterday's hearing, policymakers echoed many of the concerns raised by a diverse coalition of stakeholders, warning that Basel III Endgame will…

• Make goods and services more expensive for consumers, according to The Financial Services Forum: "Under the proposal, the current risk-sensitive, model-based approach would be replaced by a completely new standardized capital charge. The new operational risk capital requirements account for 78% of the total increase in required capital…Operational risk capital is a tax on all banking activities and would be applied widely, impacting the cost and availability of every financial service provided by the largest U.S. banks."
• Limit municipal bond financing, according to Federal Reserve Board Governor Michelle Bowman: "When a local government issues municipal bonds to finance local infrastructure, they may find that financing is more expensive, or in some cases unavailable."
• Increase costs for pensions and retirement funds, according to the American Benefits Council: "We have deep concerns about the effects of the proposal on pension plans and the participants they serve...the proposal would significantly increase banks’ capital requirements for derivatives and SFTs (securities financing transactions), among other transactions. These costs would be passed on to end users (such as plans), increasing the cost and reducing the availability of these products."
• Disincentivize financing clean energy projects, according to The American Council on Renewable Energy: "The treatment of tax equity in the proposed capital requirements is both unwarranted and particularly detrimental to [Inflation Reduction Act]-incentivized projects."
• Impede efforts to increase homeownership in underserved communities, according to the National Housing Conference: "Such a significant increase in capital standards under the Basel III Endgame proposal will lead to reduced credit availability for all types of real estate buyers and undermine economic growth. Worse, if these standards are adopted, they will have a devastating impact on our efforts to increase homeownership in communities of color and disadvantage all LMI, first-time, and, in particular, first-generation homebuyers of all races who do not have the benefit of multi-generational wealth or higher than average incomes."

It couldn't be more clear: regulators need to scrap this proposed rule and go back to the drawing board.