The Independent Community Bankers of America (ICBA) said in a press release that nearly 15,000 community bankers and their allies have signed a petition calling on banking regulators to exempt community banks from proposed Basel III capital regulations. The petition notes that the Basel III rules were conceived as an international standard that would apply only to the largest, internationally active banks because of their contributions to the Wall Street financial crisis. However, the proposed rule issued by federal regulators would impose the new regulations on banks of all sizes.

“The community banking industry has spoken—regulators’ approach to Basel III capital rules will have a negative impact on Main Street communities,” ICBA President and CEO Camden R. Fine said. “These proposed capital standards were designed to reduce the risks posed by the large and complex financial institutions that contributed to the worst financial crisis since the Great Depression. Applying overly complex capital rules on community banks will fuel concentration in the banking industry, leaving small businesses and consumers with fewer banking options.”

ICBA’s petition notes that community banks maintain the highest capital levels in the banking industry and did not engage in the reckless behavior that contributed to the recent financial crisis. Imposing complex and excessive capital standards on these Main Street institutions will limit the ability of community banks to lend and invest in their communities, which will threaten the nation’s economic recovery.

The petition expresses particular concerns with the impact of proposed risk weights on mortgages and certain types of commercial loans, which would severely restrict the availability of credit. ICBA’s petition calls for allowing community banks to continue using Basel I risk standards, which more accurately align their regulatory capital with the type of assets they hold and the relationship model they follow.