WASHINGTON, D.C. — The Federal Reserve is proposing a new regulation called Basel III Endgame— its goal is to insulate big banks during tough times; however, the proposal is getting pushback from the Goldman Sachs 10,000 Small Businesses Voices program.
J.J. Meddaugh from Kalamazoo is one of several small business owners from around the country who went to Washington D.C. on Tuesday to urge lawmakers and the Federal Reserve to stop this regulation.
They say if the proposal goes through, it could prevent them from growing their businesses.
"We've gone through so much through the past three or four years, the pandemic, the inflation supply chain, all of these things. And we are trying to make sure that there isn't another roadblock as we try to expand," Meddaugh told FOX 17.
He owns A.T. Guys, Your Access Technology Experts, in Kalamazoo. Meddaugh is visually impaired and his company aims to provide products, training and consulting to people with similar conditions.
"We not only sell to blind and low vision individuals, we also employ blind and low vision individuals. I want to keep employing other competent blind people in my business," he explained.
However, if Basel III Endgame goes through, he says it will be harder to manage his business.
The proposal would require banks to have more money held back to cover all of their loans, which means there will be less money available for people to borrow.
Big businesses won't have a hard time receiving loans, but small business that are considered risky will face higher interest rates.
"That's why we say to stop the squeeze, we would get to get squeezed out as they focus on the quote-unquote, easier opportunities for lending," he added.
If the new regulation goes into effect, Meddaugh says he and many others will have to scale back. But, he says, local businesses are the bread and butter of their communities, and adding regulations like this makes it harder to meet those local needs.
If the proposal is approved, large banks would start transitioning to the new frameworks in July 2025 with full compliance required by July 2028. The Federal Reserve is still accepting comment on the proposal through November 30.
