The American Bankers Association President and CEO Rob Nichols said in a letter to Biden that a raft of new regulations including new capital rules for banks, tighter Community Reinvestment Act requirements and an overhaul of the Federal Home Loan Bank System could hamstring banks' ability to provide credit and services. 

"If preserving the dynamic, diverse U.S. banking system remains a priority for the nation and access to affordable banking services for every American a table-stakes imperative, I encourage you to ask tough questions about the regulatory tsunami now forming and whether it is consistent with your goals to increase economic growth and expand opportunities for all Americans," Nichols wrote. 

It's a familiar argument that the banks have been pushing in Congress, as well as to everyday consumers in advertisements and other types of public outreach. 

"Implementation of each of these regulations on their own creates significant challenges for banks that impact their customers," Nichols said in the letter. "Together, these new regulations and a persistent high interest rate environment mean banks of all sizes, including the smallest community banks, will face higher costs for deposits, higher costs to offer basic banking services like free checking accounts, higher costs to make loans (even relative to nonbanks) and higher costs to run basic payment programs and invest in critical cybersecurity and other fraud mitigation systems. Collectively, these increased costs to banks translate into increased costs for customers — or scarcity, and no single regulator, much less the group as a whole, is measuring how these costs will add up and flow through the economy."

Nichols also asked Biden to direct Treasury Secretary Janet Yellen to examine the new rules at the Financial Stability Oversight Council. 

"Without commenting on specific proposed regulations, President Biden supports common-sense reforms to reverse Trump-era weakening of the supervision of large regional banks in order to strengthen our banking system to avoid future crises like the collapse of Silicon Valley Bank," the White House said in a statement. "A safe and diversified banking sector — including healthy community and regional banks — is a source of strength for our economy. As is common practice, independent regulators are currently in the process of taking comment from industry, businesses and other stakeholders on specific aspects of their proposed rules." 

While it's unlikely that FSOC will heed the pleas of the ABA, given that it's made up of the regulators that are proposing these changes in the first place, the letter can be seen as teeing up an agenda should there be a change in the administration in 2024. 

"It provides political protection for a potential GOP administration in early 2025 to broadly freeze all pending financial rulemakings in order to assess their collective impact on lending, competitiveness, consolidation and the economy," said Jaret Seiberg, financial services and housing policy analyst for TD Cowen Washington Research Group. "This could include rules that the agencies already finalized." 

Seiberg said that a new administration could run into political difficulty should they try to argue that each individual regulation proposed by the Biden administration has a safety and soundness or a consumer protection issue. 

"The easier argument is that Team Biden failed to look at the broader impact per the ABA letter," he said.