Today, Congressman Blaine Luetkemeyer (MO-3) questioned financial experts during the Financial Institutions and Monetary Policy Subcommittee Hearing titled, “The Tangled Web of Global Governance: How the Biden Administration is Ceding Authority Over American Financial Regulation.”

The Basel III Endgame proposal places an excessive burden on banks, businesses, and individuals to meet higher capital requirements. Despite the supremacy of the U.S. financial system, the Federal Reserve, FDIC, and Office of the Comptroller of the Currency (OCC) aim to adopt European standards lacking U.S. input. Rep. Luetkemeyer has previously expressed concerns over the plan’s impact on small businesses and lower-income individuals attempting to access necessary loans.

Christina Skinner, Associate Professor at the University of Pennsylvania: “Well, it seems to me that the direction of travel for the Basel Endgame rule is to give regulators more control over defining what is a credit risk and therefore to whom and against what assets banks should lend, rather than having the banks make that decision for themselves.”

Rep. Luetkemeyer: “It looks to me like we’re in a modified ‘Operation Chokepoint’ situation where regulators are able to use these new rules and regulations to hit the banks over the head and modify their business model to satisfy the regulators’ point of view and their ‘activism’ toward a green economy. Mr. Bashur and Ms. Skinner, you both made comments with regard to the questionability of where this rule came from. It didn’t come from Congress. For regulators to have authority to promulgate rules, it needs to come from Congress. They can’t just pull this out of the air. Would you like to elaborate?”

Bryan Bashur, Director of Financial Policy at Americans for Tax Reform: “It could be that they’re trying to use the International Lending Supervision Act as some sort of legislative authority. The problem with that is that it was a response to the Latin-American debt crisis, and that was specifically to tamp down on potential risky foreign debt. This rule goes far beyond that.”

Background: Bank collapses earlier this year spurred panic over potential failures and bank runs that could topple our already fragile economy. With record-high inflation and a president unwilling to curtail his spending, it’s reasonable to look for a safety net to protect Americans. However, the Basel III Endgame proposal, as it’s known, suggests hitting U.S. banks with higher capital requirements often beyond what their internal risk management strategies deem necessary. For some of the more well-known banks, this would lock up an additional 20% of their cash. Not only does Basel III punish an entire industry for the mismanagement of a few banks, but these requirements pose significant challenges for small businesses and individuals.

Watch the full clip HERE.