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115th Congress   }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                     {      115-620

======================================================================



 
       TRANSPARENCY AND ACCOUNTABILITY FOR BUSINESS STANDARDS ACT

                                _______
                                

 April 5, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 3179]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 3179) to require the appropriate Federal banking 
agencies, when issuing certain prudential regulations that are 
substantively more stringent than a corresponding international 
prudential standard to publish the rationale for doing so and a 
cost-benefit analysis of the difference, and for other 
purposes, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                          PURPOSE AND SUMMARY

    Introduced by Representative Trey Hollingsworth on July 11, 
2017, H.R. 3179, the ``Transparency and Accountability for 
Business Standards Act'' requires Federal banking agencies (the 
Office of the Comptroller of the Currency (OCC), the Board of 
Governors of the Federal Reserve System (Federal Reserve), and 
the Federal Deposit Insurance Corporation (FDIC)) to publish--
whenever issuing certain prudential regulations which are 
substantively more stringent than corresponding international 
standards--a rationale and comprehensive cost-benefit analysis 
of the differences between the prudential regulation and the 
corresponding international prudential standard, for public 
notice and comment.
    The cost-benefit analysis must include the following 
metrics:
           Any impact on pricing and availability of 
        credit, in the aggregate and for specific types of 
        borrowers
           Any impact on liquidity in markets, in the 
        aggregate and for specific instruments
           Any impact of the effect of the rules on 
        affected institutions, and
           Any impact on employment, economic growth 
        and monetary policy execution

                  BACKGROUND AND NEED FOR LEGISLATION

    In response to the 2008 financial crisis, the Basel 
Committee on Banking Supervision (Basel Committee), of which 
the United States is a member, agreed to modify internationally 
negotiated bank regulatory standards known as the Basel Accords 
to increase bank capital and liquidity requirements and other 
regulatory measures.
    The Basel Accords are international banking regulations 
negotiated between participating regulators, but they rely on 
local implementation to take effect in a nation's financial 
regulatory regime. The Basel Committee cannot force individual 
nations to adopt its standards, and agreements made in Basel 
are subject to interpretation, implementation, and enforcement 
by domestic regulators. Nevertheless, both member and non-
member countries largely follow the bank supervisory guidance 
issued by the Basel Committee.
    The Dodd-Frank Wall Street Reform and Consumer Protection 
Act (P.L. 111-203) codified the Basel III capital standards and 
the U.S. Federal banking regulators--including the FDIC, 
Federal Reserve, and OOCC--promulgated rules to implement the 
standards on July 9, 2013.
    Since 2008, U.S. banks have raised more than $400 billion 
in new capital, and regulators in the United States and 
elsewhere, working under the aegis of the Basel Committee and 
the G-20's Financial Stability Board, have required those 
institutions to maintain higher capital buffers than they did 
before the crisis. Regulators have also--for the first time--
adopted liquidity regulations that require financial 
institutions to maintain ``high quality liquid assets'' that 
they can use to satisfy their funding needs if markets seize up 
as they did in 2008 and 2009. In several instances, U.S. 
regulators have gone beyond the standards set by the Basel 
Committee and imposed more stringent capital and liquidity 
requirements on U.S. firms, a practice which has come to be 
known as ``gold-plating.''
    The practice of ``gold-plating'' U.S. financial regulation 
than the agreed-to international standards disadvantages the 
U.S. economy and the efficiency of the U.S. credit market for 
consumers. Capital and liquidity standards affect everyone in 
the economy. Appropriate standards can ensure bank stability, 
whereas excessive requirements can impede the growth of the 
domestic economy and create competitive disadvantages on the 
international financial stage. The U.S. Treasury Department 
noted in its June 2017 report issued in response to President 
Trump's Executive Order 13772 on Core Principles for Regulating 
the United States Financial System, ``In many instances, the 
U.S. banking agencies have implemented standards for U.S. G-
SIBs and other large internationally active U.S. banks that are 
more conservative than the international standards established 
by the Basel Committee or the Financial Stability Board.''
    As U.S. regulators promulgate rules to require domestic 
institutions to maintain nearly double the amount of capital of 
their international counterparts, it puts U.S. institutions at 
a competitive disadvantage. It further harms consumers by 
leaving less capital available for lending and also reducing 
the number and types of products consumers can choose from. 
With billions of dollars of equity capital capable of 
supporting hundreds of billions of dollars in lending capital 
unjustifiably locked away under overly-stringent domestic 
capital standards, economic growth and consumer welfare are 
stifled. The June 2017 Treasury Report also noted, 
``International regulatory standards should only be implemented 
through consideration of their alignment with domestic 
objectives and should be carefully and appropriately tailored 
to meet the needs of the U.S. financial services industry and 
the American people.''
    The Treasury Report also recommended that, ``U.S. rules 
that exceed international standards that should be recalibrated 
include (i) the U.S. G-SIB risk-based surcharge, including its 
focus on short-term wholesale funding reliance; (ii) the 
mandatory minimum debt ratio included in the Federal Reserve's 
TLAC and minimum debt rules; and (iii) the eSLR.'' This bill 
will ensure that if regulators determine that domestic 
standards should be more stringent than the standards foreign 
institutions adopt under the aegis of the Basel Committee or 
any other international standard-setting body, they should do 
so only after careful analysis and a transparent, and public 
process that allows for consideration of the benefits to safety 
and soundness taken together with the potential harm to the 
economy and consumer freedom.

                                HEARINGS

    The Committee on Financial Services held a hearing 
examining matters relating to H.R. 3179 on December 7, 2017.

                        COMMITTEE CONSIDERATION

    The Committee on Financial Services met in open session on 
December 12 and 13, 2017, and ordered H.R. 3179 to be reported 
favorably to the House as amended by a recorded vote of 34 yeas 
to 26 nays (Record vote no. FC-130), a quorum being present.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole recorded vote was on a motion by Chairman Hensarling to 
report the bill favorably to the House with amendment. The 
motion was agreed to by a recorded vote of 34 yeas to 26 nays 
(Record vote no. FC-130), a quorum being present.



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 3179 
will require Federal banking agencies (the Office of the 
Comptroller of the Currency (OCC), the Board of Governors of 
the Federal Reserve System (Federal Reserve), and the Federal 
Deposit Insurance Corporation (FDIC) to publish--whenever 
issuing certain prudential regulations which are substantively 
more stringent than corresponding international standards--a 
rationale and comprehensive cost-benefit analysis of the 
differences between the prudential regulation and the 
corresponding international prudential standard, for public 
notice and comment.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                 CONGRESSIONAL BUDGET OFFICE ESTIMATES

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 28, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3179, the 
Transparency and Accountability for Business Standards Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Sarah Puro 
and Nathaniel Frentz.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 3179--Transparency and Accountability for Business Standards Act

    Summary: H.R. 3179 would require three federal banking 
regulators--the Federal Deposit Insurance Corporation (FDIC), 
the Office of the Comptroller of the Currency (OCC), and the 
Federal Reserve--to conduct and publish cost-benefit analyses 
of any new regulations they implement related to capital 
requirements, leverage requirements, or liquidity requirements 
that are substantively more stringent than corresponding 
international standards. The bill also would require those 
regulators to complete cost-benefit analyses for any similar 
regulations they have implemented since January 2007.
    CBO estimates that enacting the legislation would increase 
the deficit by $8 million over the 2018-2027 period. That 
amount comprises an increase in direct spending of $4 million 
and a reduction in revenues of $4 million. Because enacting the 
bill would affect direct spending and revenues, pay-as-you-go 
procedures apply.
    CBO estimates that enacting H.R. 3179 would not increase 
net direct spending or on-budget deficits by more than $2.5 
billion in any of the four consecutive 10-year periods 
beginning in 2028.
    H.R. 3179 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA). Additional fees 
imposed by the FDIC and the OCC would increase the cost of an 
existing mandate on private entities required to pay those 
assessments. However, CBO estimates that the incremental cost 
of the mandate would fall well below the annual threshold 
established in UMRA for private-sector mandates ($156 million 
in 2017, adjusted for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary effect of H.R. 3179 is shown in the following table. 
The costs of the legislation fall within budget function 370 
(advancement of commerce).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  By fiscal year, in millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2018    2019    2020    2021    2022    2023    2024    2025    2026    2027   2018-2022  2018-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              INCREASES IN DIRECT SPENDING
 
Estimated Budget Authority........................       0       1       1       *       *       *       *       *       *       *         2          4
Estimated Outlays.................................       0       1       1       *       *       *       *       *       *       *         2          4
 
                                                                  DECREASES IN REVENUES
 
Estimated Revenues................................       0      -1      -1       *       *       *       *       *       *       *        -2         -4
 
                                        NET INCREASE IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES
 
Impact on Deficit.................................       0       2       2       1       1       1       1       1       1       1         5          8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Components may not sun to totals because of rounding.
* = between -$500,000 and $500,000.

    Basis of estimate: Costs incurred by the FDIC and the OCC 
are recorded in the budget as increases in direct spending. 
Those agencies are authorized to collect premiums and fees from 
insured depository institutions to fully cover such 
administrative expenses, although CBO expects that a portion of 
the costs incurred by the FDIC under H.R. 3179 would be 
recouped after 2027. Regulatory costs of the Federal Reserve 
System have the effect of reducing remittances to the Treasury, 
which are recorded in the budget as revenues.
    Under current law, a cost-benefit analysis is prepared 
before a federal banking regulator adopts a new regulation. 
However, CBO estimates that the bill's standards for such 
analyses would require additional work. The bill also would 
require regulators to prepare cost-benefit analyses for certain 
regulations issued since January 2007.
    Using information from the financial regulators, CBO 
estimates that between 5 and 10 of the regulations issued since 
January 1, 2007, would require cost-benefit analyses under the 
bill. In addition, CBO estimates that to implement future 
regulations, the regulators would have to complete an 
additional cost-benefit analysis each year.
    CBO estimates that each affected agency would need the 
equivalent of one additional full-time employee to complete the 
additional work required under the bill. Depending on the 
agency, the associated cost of employment would range from 
$200,000 to $250,000 annually. As a result, CBO estimates, 
enacting the bill would increase deficits by $8 million over 
the 2018-2027 period. That amount includes an increase in net 
direct spending of $4 million and a decrease in revenues of $4 
million because the increased costs for the Federal Reserve 
would reduce remittances to the Treasury.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in the 
following table.

  CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 3179, THE TRANSPARENCY AND ACCOUNTABILITY FOR BUSINESS STANDARDS ACT, AS ORDERED REPORTED BY THE HOUSE
                                                  COMMITTEE ON FINANCIAL SERVICES ON DECEMBER 13, 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                            --------------------------------------------------------------------------------------------
                                                              2018   2019   2020   2021   2022   2023   2024   2025   2026   2027   2018-2022  2018-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT
Statutory Pay-As-You-Go Impact.............................      2      2      1      1      1      1      1      1      1       1         5          8
Memorandum:
    Changes in Outlays.....................................      1      1      0      0      0      0      0      0      0       0         2          4
    Changes in Revenues....................................      1      1      0      0      0      0      0      0      0       0         2          4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term direct spending and deficits: CBO 
estimates that enacting H.R. 3179 would not increase net direct 
spending or on-budget deficits by more than $2.5 billion in any 
of the four consecutive 10-year periods beginning in 2028.
    Mandates: H.R. 3179 contains no intergovernmental mandates 
as defined in UMRA.
    CBO expects that the FDIC and the OCC would increase fees 
to offset the costs of implementing the additional regulatory 
activities required by the bill. Any increase in fees would 
increase the cost of an existing mandate on entities required 
to pay those assessments. Using information from the federal 
banking regulators, CBO estimates that the incremental cost to 
comply with the mandate would fall well below the annual 
threshold established in UMRA for private-sector mandates ($156 
million in 2017, adjusted for inflation).
    Estimate prepared by: Federal Costs: Sarah Puro; Revenues: 
Nathaniel Frentz; Mandates: Jon Sperl.
    Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         EARMARK IDENTIFICATION

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    DUPLICATION OF FEDERAL PROGRAMS

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   DISCLOSURE OF DIRECTED RULEMAKING

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed 
rulemakings: The Committee estimates that the bill requires no 
directed rulemakings within the meaning of such section.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    This section cites H.R. 3179 as the ``Transparency and 
Accountability for Business Standards Act.''

Section 2. Cost-benefit analysis requirement for certain prudential 
        regulations

    This section requires that appropriate Federal banking 
agencies, when issuing prudential regulations that are 
substantively more stringent than corresponding international 
standards, must publish, for public notice and comment, a 
rationale and comprehensive cost-benefit analysis of the 
differences between the prudential regulation and the 
corresponding international prudential standard. The cost-
benefit analysis must include the following metrics:
           Any impact on pricing and availability of 
        credit, in the aggregate and for specific types of 
        borrowers;
           Any impact on liquidity in markets, in the 
        aggregate and for specific instruments;
           Any impact on affected institutions; and
           Any impact on employment, economic growth 
        and monetary policy execution.
    This section also require that in order for a Federal 
banking agency to supersede an extant prudential regulation by 
adopting an international standard, it must first publish, for 
public notice and comment, a proposal to repeal or amend the 
superseded regulation or a description (including a cost-
benefit analysis) of why it does not intend to repeal or amend 
the superseded regulation.
    Finally, the section includes a lookback provision 
requiring Federal banking agencies to report to Congress within 
180 days on any final rule since January 1, 2007, that would 
fall into one of the above categories.
    This section also defines the various terms utilized within 
the Act.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    H.R. 3179 does not repeal or amend any section of a 
statute. Therefore, the Office of Legislative Counsel did not 
prepare the report contemplated by clause 3(e)(1)(B) of rule 
XIII of the Rules of the House of Representatives.

                             MINORITY VIEWS

    H.R. 3179 would impose a new, onerous administrative burden 
on federal banking agencies--specifically the Board of 
Governors of the Federal Reserve System (Federal Reserve), the 
Federal Deposit Insurance Corporation (FDIC), and the Office of 
the Comptroller of the Currency (OCC)--before they could adopt 
a prudential regulation, such as requirements regarding how 
much capital a bank must maintain, that is more stringent than 
a corresponding international prudential standard. Under the 
bill, the agencies would first be required to publish for 
notice and comment their rationale, among other things, when 
issuing a stricter rule than under the international standard 
and conduct a cost-benefit analysis of the difference between 
the proposed regulation and the international standard.
    Oddly, H.R. 3179 does not require a similar analysis if 
U.S. regulators propose a weaker standard than a corresponding 
international prudential standard. In addition, the cost-
benefit analysis under H.R. 3179 would require regulators to 
consider the impact on availability of credit and economic 
growth, but it would not include other important 
considerations, such as the impact on the safety and soundness 
of the U.S. banking system and financial stability. Thus, we 
are deeply concerned H.R. 3179 could have the net effect of 
discouraging regulators from pursuing stronger rules that could 
help prevent another financial crisis.
    Federal banking agencies participate in the Basel Committee 
on Banking Supervision (Basel Committee) at the Bank for 
International Settlement.\1\ The purpose of the Basel framework 
generally, and the Basel III framework specifically, is to 
improve resilience for the banking system during episodes of 
financial distress.\2\ Typically, after the Basel Committee 
agrees to these prudential standards, U.S. federal banking 
agencies implement these standards through the extensive 
administrative process of modifying existing rules or issuing 
new proposed rules, considering public comments, conducting 
extensive analysis and ultimately issuing final rules that 
tailor the Basel standards to the U.S. banking system.\3\
---------------------------------------------------------------------------
    \1\https://www.bis.org/bcbs/about.htm.
    \2\https://www.bis.org/bcbs/basel3.htm.
    \3\See CRS Report, ``Overview of the Prudential Regulatory 
Framework for U.S. Banks: Basel III and the Dodd-Frank Act,'' (July 27, 
2016), http://www.crs.gov/Reports/R44573.
---------------------------------------------------------------------------
    Despite record profits earned by the banking sector in 
recent years,\4\ and business lending up more than 75 percent 
since Dodd-Frank was signed into law,\5\ the Trump 
Administration and Wall Street banks have argued that U.S. 
regulators have gone too far in so-called ``gold-plating'' 
international standards, which is a term commonly used to 
describe the application of stricter standards to U.S. banks 
than what is specified in Basel III or other agreements. Many 
of the positions articulated in a 2017 Treasury report\6\ to 
roll back these prudential safeguards have also been echoed by 
the megabank executives. Jamie Dimon, the Chairman and Chief 
Executive Office for JPMorgan Chase & Co., for instance, wrote 
in his 2016 annual letter to shareholders that: ``America 
should eliminate its `gold plating' of international standards. 
American regulators took the new Basel standards across a wide 
variety of calculations and asked for more.''\7\ This 
perspective ignores the benefits from more stringent rules to 
promote financial stability, and also ignores how large banks 
may use excess cash to buy back shares, pay dividends or pay 
out bonuses to executives instead of providing more access to 
credit for consumers.\8\
---------------------------------------------------------------------------
    \4\https://www.wsj.com/articles/u-s-banking-industry-annual-profit-
hit-record-in-2016-1488295836.
    \5\http://money.cnn.com/2017/02/13/investing/bank-business-lending-
dodd-frank-trump/ index.html.
    \6\United States Department of the Treasury, ``A Financial System 
That Creates Economic Opportunities--Banks and Credit Unions,'' (June 
2017), available at: https://www.treasury.gov/ press-center/press-
releases/Documents/A%20Financial%20System,pdf. 
    \7\https://www.jpmorganchase.com/corporate/investor-relations/
document/ar2016-ceoletter shareholders.pdf.
    \8\https://www.fdic.gov/about/learn/board/hoenig/hoenigletter07-31-
2017.pdf.
---------------------------------------------------------------------------
    While proponents of H.R. 3179 argue the U.S. should not 
``gold plate'' international standards, such an effort can lead 
to other jurisdictions to follow America's lead in setting 
higher, not lower, prudential standards. According to John 
Heltman of American Banker, ``It's beginning to look like the 
rest of the world may follow the U.S.' lead when it comes to 
tougher capital standards. . . . Wall Street critics say it 
illustrates their long-standing claims that `gold-plating'--
that is, setting regulatory standards that exceed international 
standards--can help influence other countries to agree to 
stronger standards.''\9\
---------------------------------------------------------------------------
    \9\https://www.americanbanker.com/news/basel-move-makes-the-case-
for-gold-plating-capital-standards.
---------------------------------------------------------------------------
    Furthermore, while there are a wide range of views on the 
appropriate stringency of bank capital requirements,\10\ the 
United States has been generally recognized as being far more 
successful compared to other jurisdictions, such as Europe, in 
re-capitalizing and strengthening the resiliency of the banking 
sector through robust stress testing and other enhanced 
prudential requirements following the financial crisis.\11\ In 
fact, U.S. banks have added more than $750 billion in capital 
to absorb potential losses and are much less reliant on the 
kinds of short-term funding that disappeared in the 2007-2009 
financial crisis.\12\
---------------------------------------------------------------------------
    \10\For example, see: https://www.federalreserve.gov/econres/feds/
files/2017034pap.pdf; https://www.gsb.stanford.edu/faculty-research/
books/bankers-new-clothes-whats-wrong-banking-what-do-about-it; https:/
/www.minneapolisfed.org/publications/special-studies/endingtbtf; 
https://www.fdic.gov/news/news/speeches/spmar1317.html; and https://
www.aei.org/publication/ regulation-of-bank-capital-and-liquidity/.
    \11\For example, see https://www.economist.com/news/special-report/
21721502-most-european-banks-were-slow-mark-after-crisis-american-
banks-have-recovered; https://www.economist.com/news/special-report/
21721497-international-bank-regulation-grinding-towards-completionor- 
possibly-halt-basel-3; and https://www.cnbc.com/id/37237500.
    \12\https://obamawhitehouse.archives.gov/blog/2017/01/09/review-
why-president-obama- reformed-wall-street-and-what-reform-has-
accomplished.
---------------------------------------------------------------------------
    According to Dr. Marcus Stanley in testimony before the 
Committee, ``Subordinating U.S. bank regulations to what is 
attainable in a Basel consensus would be an extremely dangerous 
move.''\13\ Experts have also pointed out the shortcomings with 
the current cost-benefit analysis conducted by federal banking 
regulators, more generally, noting that compliance burdens are 
easier to calculate compared to the more hypothetical and large 
benefits to the broader public of preventing a catastrophically 
costly, unrealized financial crisis. The financial industry has 
repeatedly used these analyses to challenge various rulemakings 
in court.\14\
---------------------------------------------------------------------------
    \13\https://financialservices.house.gov/uploadedfiles/hhrg-115-
ba15-wstate-mstanley-20171207. pdf.
    \14\For example, see https://www.yalelawjournal.org/article/cost-
benefit-analysis-of-financial-regulation and http://
ourfinancialsecurity.org/wp-content/uploads/2012/05/DENNIS-KELLEHER-
PPT.pdf.
---------------------------------------------------------------------------
    Because the mandatory review process under the bill is only 
triggered when federal banking regulators seek to adopt 
stronger prudential regulations, it would create an 
administrative disincentive for regulators to pursue more 
robust rules that could prevent another financial crisis. At a 
minimum, the additional administrative requirements in the bill 
would also increase the time-period for certain prudential 
rulemakings, which could create safety and soundness risks in 
tying the hands of regulators during times of financial stress 
or dire economic conditions.
    For these reasons, we oppose H.R. 3179.

                                   Maxine Waters.
                                   Nydia M. Velazquez.
                                   Carolyn B. Maloney.
                                   Joyce Beatty.
                                   Keith Ellison.

                                  [all]