Federal banking regulators said Friday morning that the Basel III capital rules will not go into effect Jan. 1. But they did not set a new target date.
When the new Basel III capital standards were first issued for public comment in June, the regulators suggested that the effective date would be Jan. 1.
Since then, the agencies have received hundreds of comment letters objecting to the complex rules and the higher capital requirements on private single-family mortgages. The regulators have yet to finalize the capital rules. So a New Year's Day effective date was totally impractical.
“In light of the volume of comments and the wide range of views during the comment period, the agencies do not expect that any of the proposed rules would become effective on Jan. 1, 2013,” the agencies said in a statement.
Friday’s announcement came a few days after the Senate Banking Committee scheduled a hearing for the regulators to testify on the Basel III capital rules. The hearing date is Nov. 14.
At the hearing, the federal regulators are expected to come under pressure to exempt community banks from the proposed Basel III capital rules.
Back in September, 53 senators signed a joint letter urging the federal regulators to reconsider their decision to apply the Basel III capital rules to small banks and thrifts.
Sen. Mark Warner, D-Va., said it is vitally important for community banks to be well capitalized. “But the proposed Basel rules go beyond the current, reasonable standards and would actually reduce a bank’s ability to lend and spark our economic recovery,” Warner said.