This week, consumers, nonprofits, business leaders, Members of Congress, and "Even some Fed officials" joined the chorus of Americans raising concerns about Basel III Endgame.

Comment letters, speeches, and media coverage this week highlight the negative impact the proposed rule would have on the economy. What is becoming increasingly clear is that regulators need to go back to the drawing board on this misguided proposal.

Check out some of this week's headlines:

• Even some Fed officials are now questioning the Fed's new bank capital rules (Yahoo)
• Tough bank rules face intense pushback (Axios)
• An Unusual Alliance Pushes Back on Fed’s Bank Capital Plan (Wall Street Journal)
• Walls are closing in on the Basel capital reforms (American Banker)
• Why Big Banks (and Some Odd Allies) Oppose a Plan to Protect Banks (New York Times) 

Additionally, the below comments and letters submitted to the Federal Reserve, OCC, and FDIC over the past several months support the case to withdraw and rethink this proposal:

• Fed Governor Chris Waller called for a major overhaul of the proposal: "Fed governor, Chris Waller, said the proposal has 'got to have a major overhaul in my view to get a reasonable product.' One possibility, he added, is 'taking it back and starting over.'" 
• Fed Governor Michelle Bowman argued the downstream impacts from Basel III Endgame on consumers warrant large modifications or a re-proposal: "Relying simply on the 'more is better' approach downplays or ignores these critically important trade offs. When policymakers consider changes to the capital framework, particularly increases of the magnitude contemplated in the proposal, we must carefully weigh the benefits of increased safety from higher capital levels, with the direct costs to banks and the downstream effects on consumers, businesses, and the broader economy… [New data analysis] should also serve as a guide to assist in shaping the next iteration of this proposal, whether that be in the form of a re-proposal or significantly revised proposal."
• The National Council of Farmer Cooperatives noted that the proposed rule would lead to less competition, fewer options, and higher hedging costs for farmers, which would ultimately negatively impact consumers: "NCFC appreciates this opportunity to provide feedback on the Proposals and believes they would lead to less competition, fewer options, and higher hedging costs to farmer cooperatives overall. Additionally, producers are increasingly dependent on their farmer cooperatives to provide them with the tools to manage price risk, especially during times of increased volatility in commodity markets. Therefore, we ask that the Agencies consider the downstream pricing costs on end-users and the adverse impacts of disincentivizing banks from offering hedging services to the agricultural industry in general, and farmer cooperatives specifically."
• The Bond Dealers of America and other organizations involved in the state and local government debt market pointed out that the regulation must be paused until there is additional analysis on the impact it will have on the municipal debt market and the economy more broadly: "We now ask that you pause the rulemaking process until the proposing agencies and other stakeholders can 1) further evaluate the effect of these rules on the economy generally; 2) specifically evaluate the impact to the municipal debt market and state and local issuers of debt; and 3) reassess the treatment of municipal securities in light of their tax-exempt status and reduce the risk weights and loss-given-default rates in both the sensitivities-based method and default risk charge which we believe would lead to a significant risk weighted asset reduction, especially considering the materially lower instance of default in the municipal market. If these key details are not assessed, all these issues will make the financing of U.S. state and local government and non-profit borrowers’ capital projects more expensive."
• The Wisconsin Congressional Delegation argued that the proposal's risk weighting could negatively impact non-public companies: "Wisconsin is blessed with a talented workforce and an abundance of companies representing a wide cross-section of industries which run the gamut from solo proprietors and small businesses to large Fortune 500 companies. In addition to publicly traded companies, our state is home to many non-public companies such as agricultural co-ops, mutual insurance companies, smaller mom-and-pop businesses, and credit unions that have all played a critical and longstanding role in our communities. We are concerned about the proposal's treatment of non-public companies, which assigns corporate exposures to such entities with a relatively higher risk weight than those to publicly traded companies, regardless of the non-public companies' financial strength."
• Doug Holtz-Eakin, President of the American Action Forum, noted that there are no quantitative estimates, justification, or benefits listed in the proposed rule: "This is a proposed rule which is unique in that it provides no quantitative estimates or justification, no benefits, when we know there will be large costs to raising capital standards by 20 or 30%. It will be in the regulators interest to demonstrate quantitatively the impacts on the economy, and in particular, the small business community, but we haven't seen anything like that."
• A bipartisan group of Representatives on the House Financial Services Committee argued that the impact of higher capital requirements on the economy and capital markets must be considered: "While capital requirements serve to protect financial institutions from failure, the benefits of higher capital requirements must be weighed against their economic effects, especially in those cases where the higher capital requirements may adversely affect our capital markets or our economy overall. Given the likely magnitude of the impact of the Notice of Proposed Rulemaking, we urge you to carefully consider the proposal’s consequences on capital markets."