H.R. 3312: Systemic Risk Designation Improvement Act of 2017

By at 7 September, 2017, 8:03 pm

UPDATE: The House passed H.R. 3312 on December 19, 2017 by a vote of 288-130.

The Honorable Blaine Luetkemeyer

U.S. House of Representatives

Washington, D.C.  20515


Dear Representative Luetkemeyer:

On behalf of the Small Business & Entrepreneurship Council (SBE Council) and our nationwide membership of entrepreneurs and small business owners, I am writing to express our strong support for H.R. 3312, the “Systemic Risk Designation Improvement Act of 2017.”  Access to working and growth capital remains a challenge for many entrepreneurs and small businesses. H.R. 3312 would improve the lending environment and unleash capital by alleviating inappropriate requirements imposed on regional and mid-size banks under Dodd-Frank.

Although small business lending has been slowly improving over the past five years or more, it has yet to climb back to pre-recession levels. Sluggish lending and the weak economic recovery have taken their toll on U.S. entrepreneurship, and the growth and hiring of small businesses.  SBE Council research finds that weak entrepreneurial activity means that there are 3.4 million “missing” businesses in our economy. The private investment gap ($1.4 trillion in 2016, according to our research) is a very serious issue stemming in large part from unnecessary or misplaced regulation.

The bipartisan H.R. 3312 would replace the $50 billion systemically important financial institution (SIFI) asset threshold, which triggers higher levels of regulation, with more appropriate measures to determine a bank’s risk to the financial system.  Mid-sized and regional banks, which many startups and small businesses have counted on for lending, have been negatively affected by this arbitrary trigger. Replacing the random $50 billion threshold with standards that more accurately measure systemic importance is a more reasonable solution that will benefit these lenders, but more importantly their small business customers.

The arbitrary threshold and its regulatory costs and restrictions are limiting the ability of mid-size and regional banks to lend and provide credit. Of course, small businesses need capital and credit to operate with certainty and to scale when opportunities arise. For strong economic growth, it is critical to get the policy climate right for entrepreneurship and lending.  H.R. 3312 will achieve this important goal by utilizing the right measures to determine risk.

Thank you for your leadership, and strong support for entrepreneurs and small businesses. Please let me know how SBE Council can assist you in ensuring H.R. 3312 is signed into law.


Karen Kerrigan. President & CEO


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