A senior executive at JPMorgan Chase has warned that proposed federal bank capital requirements could unintentionally restrict access to credit for small businesses across the United States.
As regulators move toward finalizing Basel III Endgame, one of the most significant global banking regulatory frameworks, Chase Business Bank CEO Stevie Baron said the current proposal could raise lending costs and make it more difficult for smaller companies to obtain financing.
JPMorgan raises concerns over Basel III Endgame rules
In a memo shared with Fox News Digital, Baron said recent revisions to the 2023 proposal represent progress but argued that additional changes are needed to ensure the final framework does not reduce lending capacity.
“More work is needed to ensure the final rules do not increase the cost of lending or reduce access to credit for small businesses,” Baron said.
One of the main concerns involves proposed adjustments to the Global Systemically Important Bank (GSIB) surcharge. Baron argued that the current approach could create incentives for banks to prioritize trading activities over traditional lending, potentially increasing borrowing costs for millions of small business owners.
Capital requirements and access to business loans
JPMorgan Chase is classified as a GSIB, meaning it must comply with stricter capital and loss-absorbing requirements than smaller financial institutions.
Baron urged regulators to reconsider changes to the GSIB surcharge calculation, particularly the treatment of short-term wholesale funding, arguing that the framework should recognize the benefits of large universal banks that provide diversified financial services.
He also emphasized that regulators should avoid creating a system where capital requirements automatically rise as the economy expands or normal banking activity increases.
According to Baron, policymakers should create a consistent capital framework rather than adding multiple requirements that address the same risks, as excessive restrictions could limit businesses’ ability to invest, expand and hire workers.
JPMorgan’s small business growth initiative
Baron oversees JPMorgan Chase’s business banking operations serving more than 7 million small and medium-sized businesses, with more than $19 billion in average business loans during fiscal year 2025.
The concerns come as JPMorgan continues its American Dream Initiative, announced by CEO Jamie Dimon earlier this year. The program aims to help increase the number of small and medium-sized businesses in the United States to 10 million while supporting economic growth.
The initiative includes efforts to expand access to financial resources and improve conditions for entrepreneurs and business owners.
The background behind Basel III Endgame
Following the 2008 financial crisis, international regulators developed the Basel III framework to ensure banks maintain stronger capital reserves and remain resilient during periods of financial stress.
U.S. regulators, including the Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency, introduced the Basel III Endgame proposal in 2023. However, the initial version faced opposition from banks and was later withdrawn for revisions.
The latest draft was introduced by Trump administration regulators in March, with banks continuing to request adjustments before the rules become permanent.
Lawmakers also raise concerns about lending impacts
Some lawmakers have expressed similar concerns that stricter capital requirements could reduce lending availability and make it harder for businesses and households to access financing.
Senate Banking Committee Chairman Tim Scott warned that overly complex capital rules could slow economic growth without necessarily improving financial stability.
Baron echoed this position, arguing that small businesses need reliable access to capital to support expansion, investment and job creation.
