Pub. 3 2013 Issue 1

12 www.azbankers.org October 17, 2012 Senator John McCain 241Russell Senate Office Bldg Washington, DC 20510 RE: Basel Ill Capital Proposals Dear Senator McCain: I would like to express my concerns about the Basel III proposals recently approved by the Federal Reserve Board,the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. I am a member of the senior management team at CoBiz Financial, a $2.5 billion financial services company whose bank — Colorado Business Bank and Arizona Business Bank — serve the needs of businesses and business own- ers in metropolitan Denver, Boulder and the Vail Valley in Colorado and the greater Phoenix metropolitan area in Arizona. I am in support of ensuring that banks in our country maintain strong capital levels. Like most prudent commu- nity banks, we continued to build our capital levels as well as our reserve for potential loan losses throughout the economic downturn. However, I do have concerns with the impact of the approved proposal on banks like ours. We are a community bank and, as such, have always played an important role in driving economic growth in our markets. During the first six months of this year, we made loans totaling $410.9 million primarily to businesses that employ thousands of individuals and that truly serve as the economic engine in our communities. We bank Basel III Capital Proposals A Note from Paul As many of our readers know, the Arizona Bankers Association has been active in advocating against the Basel III capital standards as the federal banking regulators have proposed to apply them across the entire in- dustry — not just to large, internationally active banks. During our September 2012 visit to Washington, D.C. we made that case to not only banking regulators, but also to members of our congressional delegation. We also aggressively took part in the comment phase of the rule making process, including sending let- ters to Members of Congress. Part of that advocacy included the message that Basel III was an international agreement. It was not a treaty subject to Senate ratification with the force of law. Yet U.S. banking regulators were treating it as such. In so doing they were essentially cutting Congress out of its constitutional role as the lawmaking authority of the United States — on a matter critical to economic growth. The letter below to Senator McCain by Arizona Business Bank President Toby Day on the issue is a good illustration of the advocacy that led the Senate to hold hearings on the capital standards last fall, as well as the agencies’ decision to postpone implementation of the final rule. This is all part of what it takes to help shape public policy in a fashion that allows the banking sector to continue in its vital role of growing our economy. I commend the strong engagement of Arizona bankers in this endeavor and encourage your continued active involvement in this and other issues near and dear to our industry.