Hirono, colleagues urge strong capital rules to protect Americans’ money

US Senator Mazie K. Hirono (D-HI) joined 11 of her colleagues in reiterating their support for the new capital requirements proposed by the Federal Reserve and the Office of the Comptroller of the Currency.

Their thoughts were sent in a letter to Federal Reserve Vice Chair for Supervision Michael Barr, Federal Deposit Insurance Corporation Chair Martin Gruenberg, and Acting Comptroller Michael Hsu.

The senators voiced their support for the new capital rules proposed by the agencies in an effort to strengthen the financial system and protect Americans’ jobs, businesses and money. In the letter, the lawmakers cited that strong capital rules allow banks to continue to serve their communities during difficult financial periods.

“Capital is the linchpin of safety and soundness in our banking system,” the senators wrote. “When a bank uses more capital to fund its investments and activities instead of debt, it is investors and shareholders, not workers and taxpayers, that take a hit if the bank faces challenges. Strong capital is the shock absorber on banks’ balance sheets during economic downturns. It allows banks to keep making loans exactly when businesses and households might need an economic lifeline the most. Banks that conduct business without capital levels that reflect their risk and complexity present an outsized threat to our financial system and economy.”

In addition to Senator Hirono, the letter was signed by Senators Sherrod Brown (D-OH), Jack Reed (D-RI), Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), Catherine Cortez Masto (D-NV), Tina Smith (D-MN), John Fetterman (D-PA), Richard Blumenthal (D-CT), Brian Schatz (D-HI), Angus King (I-ME), and Tammy Duckworth (D-IL).