This week, federal banking regulators will make their regular trek to Capitol Hill to answer questions about a variety of topics. One of the issues that will be top-of-mind for lawmakers is Basel III Endgame, the controversial banking proposal that has been criticized by a broad-based group of stakeholders.

The impacts of the proposal go far beyond the banking industry. In fact, a whopping 86% of the negative comments submitted during the public comment period on Basel III Endgame were from outside the banking sector, according to Latham & Watkins.

Below are some of the issues folks have raised about the proposal:

• The American Public Gas Association cautioned the proposal will result in higher utility bills for customers: "These regulations, if finalized, will unfortunately burden consumers with higher utility bills due to costs of upstream regulatory compliance obligations, instead of helping." (American Public Gas Association, Letter, 1/16/2024)
• Jill Bommarito, Founder and CEO of Ethel's Baking Company in Michigan, warned that Basel III Endgame could push small business owners to predatory lenders: "If enacted, this rule would not only cut off many small businesses from accessing the capital they need to grow, but it will push small-business owners to predatory lenders because they'll have no other choice." (Founder and CEO of Ethel's Baking Co. Jill Bommarito, "The Basel III rule would hamstring small businesses like mine," 1/15/2024)
• Gary Horton, President of Urban Erie Community Development Corporation, argued that the rule will have a negative impact on minority homeownership: "In the pursuit of a more just and prosperous society, we cannot afford to overlook the critical role of homeownership in achieving economic equity … Given the unintended consequences we can expect if this rule is passed, it would be irresponsible for regulators to increase capital requirements on banks." (Gary Horton, "Erie NAACP: Homeownership could be out of reach for many under proposed new bank rule," Go Erie, 4/17/2024)
• Mario H. Lopez, President of the Hispanic Leadership Fund, stated that the proposed Basel III Endgame regulations would be a "big hit" to efforts to build generational wealth: "The proposed regulations would hinder increasing homeownership, a big hit to individuals and communities that face barriers to building generational wealth, illustrated by the homeownership gap." (Mario H. Lopez, "Higher Bank Capital Requirements Would Harm Low-Income Borrowers Most," American Banker, 10/4/2023)
• California Public Employees' Retirement System (CalPERS) noted that Basel III Endgame would hurt retirees: "There are unintended consequences in the Proposal … The Proposal would punish CalPERS – and its two million beneficiaries – because it does not issue publicly traded debt securities. That error should be remedied." (California Public Employees' Retirement System, Letter, 12/22/2023)
• The Small Business & Entrepreneurship Council argued the needs of small businesses would be neglected if the proposal is finalized without changes: "The small businesses that drive the U.S. economy and local economies throughout our nation are being hung out to dry as regulators ignore the underlying causes of recent bank failures. Lawmakers cannot stand by and allow these harmful policies to get rammed through to completion." (Karen Kerrigan, President and CEO the Small Business & Entrepreneurship Council, as quoted in "Fed policies continue to batter small businesses," American Banker, 11/6/2023)

It's time for policymakers to scrap Basel III Endgame and start over.