Berks County News

Members of the House Small Business Subcommittee on Economic Growth, Tax, and Capital Access have raised concerns about the proposed Basel III capital requirements and their potential impact on small business lending in the United States. The subcommittee, led by Chairman Dan Meuser (PA-09) and Ranking Member Greg Landsman (OH-01), addressed a letter to Federal Reserve Chairman Jerome Powell and Vice Chair for Supervision Michael Barr.

The letter highlights growing worries over tightening credit conditions, rising costs of credit, and how increased capital mandates could affect small enterprises. Recent data from the Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices and the National Federation of Independent Businesses September 2023 Optimism Index indicate a constricting credit environment for small firms with annual sales below $50 million.

The subcommittee stresses that stringent capital requirements intended for larger banks may inadvertently impact smaller financial institutions and the small businesses they serve. They call for a detailed review of the Basel III proposal, focusing on its effects on diverse-owned businesses in various communities.

The subcommittee has requested an economic analysis from the Federal Reserve to examine:

- The potential effects of the Basel III Proposal on small business access to capital.

- The specific impact on diverse-owned small businesses amid high-interest rates.

- Consideration given to small business interests during the initial review phase.

Chairman Dan Meuser stated, “Ensuring reliable and affordable access to capital for small businesses is non-negotiable for a balanced economy. We need pro-growth, pro-small business, and pro-American initiatives to support entrepreneurs in Pennsylvania and across the country.”

Ranking Member Greg Landsman commented, "One of the biggest challenges facing small business owners in Southwest Ohio and across the country is access to affordable capital."

Rep. Sharice L. Davids emphasized the importance of accurate data to support Kansas small businesses' ability to access capital. Rep. Mark Alford noted that safeguarding opportunities for rural and veteran-owned businesses is crucial during challenging times.

The letter was co-signed by members from both parties, showing unified support for small business interests. A response from the Federal Reserve is requested by November 15, 2023.