Chairman Barr opened the Subcommittee on Financial Institutions hearing saying the goal was to "rightsize" the U.S. bank capital framework so it protects safety without needlessly restricting credit. He told witnesses the committee seeks a framework "that is proportional, tailored, and grounded in empirical analysis."

Witnesses presented competing emphases. Amanda Eversol, president and CEO of the Financial Services Forum, said U.S. global‑systemically important banks (GSIBs) are "never been more capitalized and more resilient" and warned that higher required capital carries economic trade‑offs for homeowners, small businesses and farmers. She urged regulators to support any rule with clear data, and to harmonize the U.S. GSIB surcharge with international standards.

Andrew Ullman of Mayer Brown and Margaret Tire (as introduced in the record) recommended tailoring capital rules to bank size, complexity and risk profile and called for supervisory reform to focus on material risks rather than process checklists. Ullman urged indexing thresholds to inflation and growth to prevent banks from being pushed into higher regulatory categories by nominal changes alone. Tire told the committee "capital is very important, but it is not the only tool in the financial stability kit," listing liquidity rules, early intervention and deposit insurance alongside capital.

Mike Flood of the U.S. Chamber of Commerce and other business‑oriented witnesses highlighted the potential downstream effects of higher capital: higher loan pricing, reduced lines of credit, and consolidation that could shrink access to credit on Main Street. Flood cited Chamber survey findings and regulatory studies that, he said, show increases in required capital raise borrowing costs for businesses.

Professor Simon Johnson of MIT warned regulators against reducing leverage and capital without robust analysis. He said recent changes to the supplementary leverage ratio (SLR) and proposals to ease leverage constraints could raise systemic vulnerability, arguing that "we should want our big banks to have more loss absorbing capital," not less.

Members from both parties pressed witnesses on specific impacts: how proposed risk‑weight changes would affect mortgage lending and first‑time homebuyers, whether differences in treatment of public versus private firms create unfair outcomes for small businesses, and whether GSIB surcharges put U.S. banks at a competitive disadvantage abroad. Witnesses frequently urged a data‑driven reproposal of the Basel III endgame and suggested regulators revisit mortgage risk weights, warehouse lending and the treatment of private companies versus public companies.

Several members raised process and design fixes: indexing tailoring thresholds to inflation, lengthening grace periods for community bank leverage regimes, and simplifying or exempting smaller banks from costly risk‑based calculations so the community bank leverage ratio (CBLR) is more widely used.

The hearing produced no formal votes. Chairman Barr closed by entering additional materials into the record and requesting written answers to members' questions by January 15, 2026. The subcommittee will likely use the testimony and members' questions to inform oversight of the forthcoming Basel III reproposal and related supervisory reforms.