Rounds Presses Fed Chair on Basel III Proposal’s Negative Impact on Housing Affordability

WASHINGTON – U.S. Senator Mike Rounds (R-S.D.) questioned Jerome Powell, Chair of the Federal Reserve, on the Fed’s Basel III Endgame proposal during a Banking, Housing, and Urban Affairs hearing titled, “The Semiannual Monetary Policy Report to the Congress.” The Chair indicated that there would be material changes to the proposal before it is finalized and that he was open to re-proposing part or even all of the rulemaking.

“I’ve weighed in several times with the concerns I have with the Basel III Endgame,” said Rounds. “I’m concerned that the proposal will make buying a home harder than it already is for many, and further down the road, I fear that it could disincentivize mortgage lending from the largest banks, particularly with regard to the secondary market and their impact on even smaller banks that do business with them.”

Rounds asked, “Would you be willing to withdraw the proposal or re-propose with significant modifications, particularly addressing the concerns that I and others have on this committee, specifically with regard to the impact?”

Powell answered, “If it turns out to be appropriate, and we get to that point, for us to re-propose parts or all of the thing, then we won’t hesitate to do so.”

Click HERE to listen to Rounds’ remarks.

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