U.S. House Financial Services Committee backs tailored bank rules

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House backs tailored bank rules

Highlights

House Financial Services Committee held a June 4 hearing on tailoring bank rules to size, complexity, and risk, aiming for proportionate regulation.
Lawmakers and regulators discussed revising Basel III, easing mortgage servicing asset deductions, indexing prudential thresholds, and addressing credit constraints following post-Silicon Valley Bank rule changes.
Regulators cited finalized community bank leverage ratio reforms at 8%, ongoing GENIUS Act work, and May 15, 2026 stablecoin rule proposals to support payments innovation and risk-based supervision.

Hearing focus on capital and supervision

As reported by the House Committee on Financial Services, the panel held a hearing on June 4 in Washington on how prudential regulators are adjusting rules to better match the size, complexity and risk profile of financial institutions while preserving safety and soundness.

Chairman French Hill says prudential regulation should support responsible lending, economic opportunity and long-term growth through transparent and proportionate requirements. Subcommittee leaders Andy Barr and Ann Wagner say regulators have moved closer to that approach in the revised Basel III proposal, after concerns that the original 2023 plan could have raised capital requirements too sharply and disrupted borrowing costs and market activity.

Lawmakers also press for relief from rules they say constrain credit. Bill Huizenga criticizes post-Silicon Valley Bank regulatory responses as overly broad, while Mike Flood says removing the mortgage servicing asset deduction from the common equity tier one formula could help both small and large institutions participate more easily in mortgage servicing. Tim Moore also urges agencies to index thresholds for enhanced prudential standards, arguing that periodic updates promised in 2019 have not happened.

Regulators point to community banks and payments innovation

Federal regulators tell the committee they are already reshaping supervision and capital treatment in ways intended to widen access and improve efficiency. Federal Reserve Vice Chair for Supervision Michelle Bowman says community bank oversight remains a priority and points to finalized reforms to the community bank leverage ratio framework, including an 8% calibration and a longer grace period for returning to compliance.

Comptroller of the Currency Jonathan Gould says the Office of the Comptroller of the Currency is embedding core supervisory standards into regulation and reviewing past enforcement and criticism for consistency with material financial risk. He also says the agency is responding to comments on its GENIUS Act proposal and aims to finalize a rule intended to support consumer protections for stablecoin users.

National Credit Union Administration Chairman Kyle Hauptman says stablecoins can make payments faster, cheaper and more inclusive, and notes that on May 15, 2026 the agency announced proposed rulemaking on permitted payment stablecoin issuer standards. FDIC Chairman Travis Hill says the agency has spent more than a year shifting supervision toward material financial risks instead of process-driven requirements, part of a broader push that regulators say should improve resilience without unnecessarily restricting innovation or credit availability.

Our earlier coverage of the May U.S. jobs report noted that nonfarm payrolls rose by 172,000—well above forecasts—while the unemployment rate held at 4.3%. We explained that the data pointed to a resilient but cooling labor market, giving the Federal Reserve room to keep rates in the 3.50% to 3.75% range and keeping markets focused on how long policy may stay restrictive.

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