Affordability Is Also a Credit Issue

Affordability is dominating the policy conversation, and most of the debate centers on prices. However, few families pay for a home or car all at once, and few small businesses fund a new hire straight from revenue. What they can afford often depends on whether they can borrow, and at what rate.

Credit is where policy meets the kitchen table

For a family whose car breaks down the week before a new job starts, or a restaurant owner who needs a new oven before the holiday rush, credit lets them fix the problem now and pay over time.

Capital requirements help set what that credit costs and who can get it. With strong rules calibrated to actual risk, we can keep the financial system resilient without needlessly squeezing lending. Regulators say their 2026 proposals aim for exactly that.

• Rep. Andy Barr (R-KY) said the goal is "a strong, resilient banking system that supports American homebuyers, small businesses, and farmers."

What it means for families and small businesses

• Homebuyers: Regulators expect the proposals to ease constraints on mortgage lending. Mortgage Bankers Association President Robert Broeksmit explained, "the less capital a bank has to hold against a safe asset like a mortgage, the more mortgages they can make and the lower the rate will be."
• Small businesses: Owners borrow to make payroll while they wait on a client's payment. Federal Reserve Vice Chair for Supervision Michelle Bowman says regulators must ask whether capital rules "support or restrict lending to the small businesses" that create jobs.
• Consumers: Capital rules also help shape credit card APRs for the 78 percent of U.S. adults who have a card, along with rates on auto loans.

Add credit to the conversation

Lawmakers looking to lower costs for families should also look at what it costs them to borrow, and getting capital calibration right is part of that work.

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