U.S. Senators Katie Britt, R-Alabama, and Jerry Moran, R-Kansas, joined colleagues this week in writing a letter urging the Board of Governors of the Federal Reserve, the Office of the Comptroller of the Currency, OCC, and the Federal Deposit Insurance Corporation, FDIC, to prioritize agriculture and energy producers as they reevaluate the Basel III Endgame Proposal and the Global Systemically Important Bank, GSIB, Surcharge Proposal.
“As you re-evaluate the proposals, it is important to consider the adverse effects of disincentivizing banks from offering hedging products to industries sensitive to price volatility in commodity markets such as grain, livestock, oil, fertilizer, and minerals,” wrote the Senators. “We respectfully ask that you craft these rules in a manner that provides sufficient capacity, including in times of heightened volatility, for banks to offer products that allow stakeholders to properly hedge risk, thus providing businesses certainty and allowing downstream prices to remain stable for consumers.”
Senators Bill Hagerty, R-Tennessee; Tommy Tuberville, R-Alabama; John Boozman, R-Arkansas; and Cindy Hyde-Smith, R-Mississippi, also signed the letter. The full letter can be read here.
The letter is supported by the American Farm Bureau Federation, National Grain and Feed Association, National Milk Producers Federation, International Swaps and Derivatives Association, National Council of Farmers Cooperatives and Futures Industry Association.
Senator Britt shared that she has been a vocal critic of the Basel III Endgame rulemaking issued under the Biden Administration. Since 2023, she has emphasized that the originally proposed Basel III requirements could severely weaken the financial sector, putting American financial institutions, community banks, and small businesses at a disadvantage.
She also questioned Federal Reserve Chair Powell on the previous Basel III proposal, pointing out that the financial regulators had not considered the combined impacts of other concurrent proposals, while noting, the proposal would have had “a detrimental effect to our agriculture community and increase other costs providing food and fiber to our nation.” She emphasized that our agriculture industry is “one in five jobs in the state of Alabama – it’s 20 percent of our economy.”
Last month, Senator Britt joined Senate Banking Committee Chairman Tim Scott, R-S.C.; Senator Mike Rounds, R-S.D., and nine of their colleagues in sending a letter to Jerome Powell, chairman of the Federal Reserve Board of Governors, and Michelle Bowman, vice chair for Supervision, urging the Board to issue a revised final Basel III Endgame rulemaking.
The Senators’ letter expresses support for the Board’s work to finalize a new, revised rulemaking that “strengthens the resiliency of the U.S. financial system while preserving the efficiency and competitiveness of U.S. capital markets” and highlights necessary considerations for the reproposed rule, according to Britt’s release.
