Stevie Baron, the chief executive of Chase Business Bank, has cautioned that upcoming federal bank capital regulations may negatively impact small businesses by restricting their access to credit. In a memo obtained by Fox News Digital, Baron expressed concern that the current framework for the Basel III Endgame could lead to unintended consequences, specifically preventing banks from extending loans due to heightened capital requirements.
Baron acknowledged that recent revisions to the 2023 proposal represent progress but argued that additional work is necessary to prevent an increase in the cost of lending. He specifically highlighted proposed changes to the Global Systemically Important Bank (GSIB) surcharge, asserting that the current calculation formula might incentivize trading activities over lending.
This shift, he warned, could raise borrowing costs for millions of small business owners. Baron urged the Federal Reserve to reconsider the surcharge calculation, particularly regarding the short-term wholesale funding factor, to ensure that universal banks are not penalized for providing everyday banking services.
JPMorgan Chase is classified as a GSIB, which subjects it to stricter loss-absorbing equity and capital requirements compared to smaller institutions. Baron further argued that capital requirements should not automatically rise simply because the economy is growing or routine business activity is expanding.
He emphasized that policymakers should ensure the capital framework functions as a coherent whole rather than layering multiple requirements on the same risks.
Baron oversees a portfolio that includes more than seven million small and medium-sized businesses and manages over $19 billion in average business banking loans for fiscal year 2025. The bank’s broader efforts to support these entities are part of the American Dream Initiative, a program announced by JPMorgan Chase CEO Jamie Dimon in March.
This initiative aims to expand the total number of small and medium-sized businesses to ten million and promote economic growth. A senior JPMorgan Chase executive noted that acting Labor Secretary Keith Sonderling visited the bank’s headquarters last week to discuss the initiative and implementation steps under the current administration.
