Ricketts Urges Prudential Regulators to Improve the Ability of Smaller Banks to Participate in the Mortgage Market at Senate Banking Hearing 

WASHINGTON, D.C. – Yesterday, U.S. Senator Pete Ricketts (R-NE) participated in a Senate Banking Committee hearing where he advocated for regulatory relief for Nebraska’s financial institutions through bank capital modernization, emphasizing the critical role of relationship-based mortgage lending in localand rural communities. During the hearing, Ricketts focused on the negative impact of the current Basel III Mortgage Servicing Assets (MSA) capital requirements on smaller financial institutions. These capital rules directly impact their ability to originate new mortgage loans and retain mortgage servicing for existing customers.

“In Nebraska, our banking system is built around regional and community banks and credit unions, not big banks,” said Senator Ricketts. “They underwrite equipment purchases for farmers and extend working capital to small manufacturers and main street retailers. For many Nebraskan families, they are the institution that helps with a first mortgage, a home construction loan, or refinancing after a job change…Raising the cap for MSAs helps ensure a more orderly and liquid MSA market for all participants and brings more stability in the single-family mortgage market.”

Watch the video HERE.

Ricketts’ comments were made in the hearing Senate Banking Committee: “Update from the Prudential Regulators: Rightsizing Regulation to Promote American Opportunity.” The witnesses were: Hon. Michelle Bowman, Vice Chair for Supervision, Board of Governors of the Federal Reserve System; Mr. Travis Hill, Chairman, Federal Deposit Insurance Corporation; Hon. Jonathan Gould, Comptroller, Office of the Comptroller of the Currency; and Hon. Kyle Hauptmann, Chairman, National Credit Union Administration.

Background

On February 5, 2026, Sen. Ricketts sent a letter with Rep. Flood (R-NE) to Vice Chair Bowman, Comptroller Gould, and Chair Hill on removing the mortgage servicing assets (MSA) requirements for community bank leverage ratio (CBLR) regime banks. The current capital framework has created a system where community banks face making a decision between incurring severe punitive charges or cut existing valuable customer relationships by selling off MSAs.