Letter to U.S. Senate Banking Committee: “Oversight of Financial Regulators: Protecting Main Street Not Wall Street”

By at 13 November, 2023, 8:14 pm

The Honorable Sherrod Brown                                             The Honorable Tim Scott

Chairman                                                                               Ranking Member

Committee on Banking, Housing & Urban Affairs                 Committee on Banking, Housing & Urban Affairs

Unites States Senate                                                             United States Senate

Washington, D.C. 20510                                                        Washington, D.C.  20510


Re: Hearing Entitled “Oversight of Financial Regulators: Protecting Main Street Not Wall Street.”

Dear Chairman Brown and Ranking Member Scott:

The Small Business & Entrepreneurship Council (SBE Council) is writing to ensure that the concerns of small business owners are being heard. The implementation of Basel III Endgame reforms must take into consideration the harmful downstream effects that regulation can impose on small businesses, especially during a period when capital is getting tighter and more costly.

This past July, regulators announced their proposed rule changes to implement capital standards issued by the Basel Committee on Banking Supervision. Their plans would increase capital requirements on certain U.S. banks by up to 20 percent, which risks increasing the cost of lending and the availability of capital. Small businesses would be directly impacted by this regulatory action.

SBE Council’s latest Small Business Checkup Survey (Q3 2023) found that 62 percent of small business owners reported fair or poor credit conditions and difficulty accessing capital. Nearly 50 percent reporting that a lack of access to capital is hampering their operations. Moreover, our survey revealed that 61 percent of small business owners expect economic conditions to deteriorate by year-end, as they struggle with rising costs across the board.

Policymakers should not advance sweeping reforms without adequate review and without properly understanding how their actions impact the business community, especially small businesses that are disproportionately affected by regulation. Policies that further restrict access to capital at a time when small businesses are already experiencing barriers would be a costly mistake – for local businesses and economies, and the broader U.S. economy as well.

Only 10 percent of small business owners report “satisfaction” with regard to the effectiveness of federal policy, according our checkup survey. This is a wakeup call for lawmakers and policymakers to listen to their concerns and ideas, and carefully review how policies and regulatory proposals across-the-board impact the entrepreneurial sector.

Small businesses serve as the backbone and innovative engine of the U.S. economy. Capital is the fuel that helps drive small business growth and success. On behalf of SBE Council and our more than 100,000 members across the country, I urge you to press regulators about their proposed actions and urge that they act clearheadedly and thoughtfully about the potential impact on millions of small businesses.


Karen Kerrigan, President & CEO 

cc: Members of the U.S. Senate Committee on Banking, Housing, & Urban Affairs


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