Daines Presses Big Bank CEOs on Biden’s Anti-Small Business Regulations

Stands Up for Montana Small Businesses at Senate Banking Hearing

U.S. SENATE – U.S. Senator Steve Daines today at a Senate Banking hearing pressed leaders of the nation’s largest banks on the effects of the Biden administration’s recent proposal on small businesses’ borrowing capabilities.

Click HERE to download the exchange. 

Daines asked JPMorgan Chase CEO Jamie Dimon how the Basel III Endgame proposal would impact banks’ ability to lend to Montana small businesses.

Daines: Earlier this year, we saw a series of bank failures, which were among the largest in our nation’s history. These failures, in my opinion, were due to gross mismanagement by bank executives and regulators who were also asleep at the wheel. Instead of holding accountable those in supervisory positions responsible for missing the impending crisis, regulators have decided to put forth a host of regulations – regulations that would have done nothing to prevent the failures in the first place. 

In fact, every regulator I have questioned this year at hearings like this have confirmed what we all know to be true, and that is the U.S. bank system is strong, it’s well capitalized. The proposals put forth by Vice Chair Barr and other regulators will limit economic growth, reduce lending to small businesses, and for those who are able to obtain financing, they’re going to see increased costs.

You know, I have frequent meetings with my businesses across Montana. We are a state known for small businesses. I hear from them firsthand about the critical need for access to capital and the concern they have with pending regulations that could threaten their businesses. I questioned Vice Chair Barr before this very committee about risk weighting and public listing requirements in the Basel III Endgame proposal. Astonishingly, he claimed that small businesses would be better off under their proposed scheme than they are now despite the fact that less than one tenth of one percent of businesses are publicly listed and would qualify for the lower risk weighting.

Mr. Dimon, could you speak to how the Basel III Endgame proposal would impact your ability to lend critical funds to small businesses and what trickle-down effects we might expect if this were to be implemented?

Dimon: Yeah, so thank you for the question, Senator. I mean first off, these questions shouldn’t wait for the NPR coming out. They should have been answered way before because it’s very complex. The work should have been done. The details should have been shared. Directly, it makes those loans, we either have to charge more and have a lot of unintended consequences. You know, as you know, we opened in Bozeman and Billings, but we have to charge more locally just to make sure we…get our return on cost to capital.

Secondarily, like the operational risk capital will increase the cost of simply holding a small business checking account or making a loan and so all these things are cumulative effect. It’ll also affect our ability to finance your local community banks, which we often do, your local affordable housing or the Montana pension plan. So, all these things will trickle through, they’ll all become a bit more expensive and there’ll be some other unintended consequences. One thing is moving out of banking but also how we deal with customers.

So, I think some people will reprice, some people may drop a few customers and also may lead to more concentration in certain ways because you’re going to have to get more revenues from a client to justify the loan.


Last month, Daines asked Federal Reserve (Fed) Vice Chairman Michael Barr about the Basel III Endgame proposal that would limit credit availability to Montana small businesses and Montana farmers and ranchers and joined his Republican colleagues in urging the Fed to immediately withdraw this proposal.