119-SJRES-110 Journalist Public Summary
A Senate resolution led by Sen. Elizabeth Warren would use the Congressional Review Act to cancel a late‑2025 banking rule that recalibrated big‑bank leverage and related debt standards; backers say the rule weakened safeguards, while opponents warn undoing it would hamper Treasury‑market plumbing and raise funding costs. (public-inspection.federalregister.gov)
Headline Summary
Warren’s resolution would overturn a December 2025 rule that eased parts of large‑bank capital rules by recalibrating the enhanced supplementary leverage ratio (eSLR) and related TLAC/LTD requirements for U.S. GSIBs and their bank subsidiaries, using the fast‑track Congressional Review Act process. (federalreserve.gov)
What It Does
In plain terms, this measure tells regulators to scrap their December 1, 2025 capital rule that changed how the strict, backstop leverage requirement applies to the biggest banks and their depository institutions. That 2025 rule replaced fixed eSLR buffers with a formula tied to each firm’s GSIB surcharge (capped at 1%) and adjusted related TLAC/LTD requirements; it takes effect April 1, 2026 (with optional early adoption from January 1, 2026). If Congress passes this resolution and the President signs it, the rule would have no force or effect, and regulators could not issue a new rule that is “substantially the same” unless Congress later authorizes it. (public-inspection.federalregister.gov)
Why It Matters
The fight is about how much loss‑absorbing capital the largest banks must carry—and whether leverage rules are too tight (and gumming up Treasury‑market plumbing) or too loose (and risking costlier failures and bailouts). Supporters of the 2025 rule argue recalibration reduces distortions and helps banks intermediate Treasuries; critics say it weakens a vital backstop at the biggest, most complex firms. (federalreserve.gov)
Who’s For It
- Sen. Elizabeth Warren and allied Democrats who favor tougher capital at megabanks, arguing the 2025 rule “weakens” the eSLR and heightens systemic risk. (banking.senate.gov)
- Consumer and financial‑reform groups (e.g., Better Markets; Americans for Financial Reform) warning that lowering leverage requirements for GSIBs undermines safety and could increase odds of failures or bailouts. (bettermarkets.org)
- Some regulators opposed the 2025 rule internally—most prominently Federal Reserve Governor Michael Barr—citing concerns that it reduces bank‑level capital cushions. (federalreserve.gov)
Who’s Against It
- Federal banking agencies’ majority and several Fed officials (e.g., Chair Jerome Powell; Governors Christopher Waller and Michelle Bowman) who supported revisiting eSLR to make it a true backstop and ease Treasury‑market frictions. (federalreserve.gov)
- Banking trade groups (e.g., American Bankers Association, Bank Policy Institute) backing the 2025 rule as a sensible recalibration that lowers funding costs without compromising safety. (bankingjournal.aba.com)
- Some market participants argue a CRA repeal would re‑tighten constraints just as regulators moved to reduce disincentives for lower‑risk activities like Treasury intermediation. (federalreserve.gov)
What’s Next
Status: As of March 6, 2026, the joint resolution has been introduced in the Senate and referred to the Banking, Housing, and Urban Affairs Committee. If it advances, a CRA disapproval must pass both chambers and be signed by the President (or enacted over a veto) to void the 2025 rule; once enacted, agencies are barred from issuing “substantially the same” rule absent new statutory authorization. (congress.gov)
Discussion