Are Bank Regulations Being Weakened At The Worst Possible Moment?

MoneyBanking & InsuranceAre Bank Regulations Being Weakened At The Worst Possible Moment?ByMayra Rodriguez Valladares,Senior Contributor.Follow AuthorApr 27, 2026, 04:31pm EDT--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more.Economic uncertainly would be made worse by a bank crisisGettyThree new federal proposals would strip tens of billions from the capital buffers designed to protect ordinary Americans. The timing couldn’t be worse — and the promised benefit, a bank-led mortgage lending boom, is not coming. Together with three other witnesses, I will testify before the House Committee on Financial Services, Tuesday April 28 at 10am, about why this is a terrible time to weaken bank regulations. Three Notices for Proposed Rulemaking On March 19, federal bank regulators released what they described as a long-overdue modernization of America's bank capital rules. The Federal Reserve, the OCC, and the FDIC jointly proposed three Notices of Proposed Rulemaking that would, in aggregate, reduce capital requirements at the nation's largest banks by nearly five percent. When combined with recent changes to the enhanced supplementary leverage ratio and stress testing, the eight globally systemically important banks — our GSIBs — face a six percent reduction in tier 1 capital requirements. That translates to roughly $60 billion stripped from the buffers designed to absorb losses before taxpayers are called upon to help.The proposals arrive at a moment of cascading economic stress. GDPNow forecasts just 1.2 percent annualized growth for the first quarter of 2026, a stunning collapse from the 3.1 percent projection made just two months earlier. Consumer sentiment has fallen to its lowest reading in 74 years. Credit card delinquencies have climbed to 7 percent. Mortgage delinquencies are rising. Americans are increasingly turning to buy-now-pay-later services to cover grocery bills. Against this b...