Small Bank Lending Could Take Hit Under Fed Capital Rules

Law360, New York (June 8, 2012, 7:44 PM EDT) -- The Federal Reserve's proposed increased capital standards unfairly put community banks on the same playing field as the megabanks at the center of the financial crisis, small banks say, warning that the rules would effectively force them to pull back on mortgage lending.

Under the proposals released Thursday to bring the U.S. into line with the Basel III international banking accords, banks would be required to apply a different risk weighting to individual assets they hold, including mortgages, meaning they would have to hold more money...
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