The Independent Community Bankers Association of New Mexico on Monday called on the state’s U.S. senators to support legislation that would raise capital requirements on the nation’s largest banks.
Senate Bill 798, co-sponsored by Sen. Sherrod Brown, D-Ohio, and Sen. David Vitter, R-La., would require banks with more than $400 billion in assets to hold equity of at least 15 percent of their total assets. It would impose an 8 percent standard on midsized and regional banks. Banks today are required to hold equity of about 9.5 percent of assets.
The association’s 47 member banks hold a combined $10.5 billion in deposits.
Brown and Vitter say in a news release their goal is to encourage too-big-to-fail banks to shrink.
The New Mexico association said small banks are being forced to comply with expensive regulations and new capital requirements because of the “high-risk behavior” of a few huge banks.