Reps. Vargas, Meeks, Beatty, and Horsford Lead Letter to Financial Agencies Calling for Small Business Credit Accessibility and Mortgage Affordability

WASHINGTON, Jan. 18 -- Rep. Juan Vargas, D-California, issued the following news release on Jan. 17, 2024:

Today, Congressman Juan Vargas (CA-52), Reps. Gregory W. Meeks (NY-05), Joyce Beatty (OH-03), and Steven Horsford (NV-04) were joined by more than 50 members of Congress in sending a letter to the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Commission, and the Office of the Comptroller of the Currency commenting on implementation of the Basel III agreement adjusting capital requirements for large U.S. banks. The letter asks the Agencies to carefully consider how the proposal may impact underserved and minority communities seeking small business credit and mortgage loans.

The proposal seeks to bolster our financial institutions with greater capital reserves to ensure safety and soundness in our banking system. However, the rule as currently drafted may raise the cost of small business credit and subvert efforts to support homeownership in marginalized communities.

"I appreciate the work that the Biden Administration is undertaking to increase the stability of our banking system," said Congressman Vargas. "Per the President's directive, agencies have proposed regulations that will modify how banks measure their risks. Once this proposal was announced, I spent time meeting with consumer advocates, civil rights organizations, and economic analysts to determine what impact these rules would have on my constituents. Considering this feedback, I believe that our banking regulators should carefully consider how this rule would impact first time homebuyers, small businesses, and underserved communities who desperately need relief in today's economy. Our desire to increase stability in our banking system should not decrease access to affordable housing or loans, especially for families in southern San Diego."

"For underserved communities, access to affordable mortgages and fair business credit are paramount for building economic advancement and generational wealth," said Congressman Meeks. "We believe the regulators share in our goals of addressing historical disparities in credit access and making homeownership more attainable. Which is why we believe it is so important that they look at all aspects of the proposal's unintended consequences to ensure that it works towards dismantling systemic barriers that have oftentimes plagued people of color, rather than exacerbating them."

"One of my top priorities in Congress has been to reduce barriers to capital for small businesses, particularly women- and minority-owned businesses, and help close the homeownership gap for communities of color," said Congresswoman Beatty. "As the Agencies carry out the vital charge of fortifying our financial system with new capital requirements, it is essential that they keep these policy goals in mind and carefully avoid adverse impacts to underserved and minority borrowers."

"While it's crucial we ensure the stability of our financial system, we must balance that need with accessible, affordable credit, particularly in underserved communities," said Congressman Horsford. "As an advocate for economic equity, I'm urging the agencies involved in implementing the Basel III Proposal to consider the widespread impacts of these regulations on small businesses and minority homeowners in communities across the country. Nevadans and Americans overall are facing a housing affordability crisis, so we must carefully consider any potential impacts on mortgage affordability that could inadvertently widen the racial homeownership gap. The agencies must ensure that America's prudential regulations align with the policy priorities of the Biden/Harris Administration to grow the economy in an equitable manner for all communities. Any regulations must support, rather than hinder, economic equity and opportunity while upholding financial stability."

The representatives were joined by 55 of their colleagues as cosigners of the letter (letter link not provided by source).

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Original text here: https://vargas.house.gov/media/press-releases/reps-vargas-meeks-beatty-and-horsford-lead-letter-to-financial-agencies-calling-for-small-business-credit-accessibility-and-mortgage-affordability