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Banks fear SEC rule may limit access to capital markets

A proposed SEC rule change could make bank funding more expensive, potentially leading to tighter credit standards for consumer financing programs.

Major banking trade groups are pushing back against a proposed SEC rule change that could make it harder for banks to raise money quickly. The dispute centers on 'Form S-3' eligibility. Essentially, this form acts as a fast-pass for companies to issue new stock or debt without a lengthy waiting period. The SEC wants to tighten the rules on who can use this shortcut. Bank advocates argue that if lenders lose access to this streamlined process, their cost of doing business will go up. For your business, this is a 'upstream' issue that could eventually flow down to your showroom floor. When banks face hurdles in capital markets, they often become more selective about their lending or raise interest rates to offset their own increased costs. If this rule passes, it could lead to a tighter credit environment where lenders have less appetite for risk or less liquidity to fund consumer loans at the same volume they do now. We are watching this closely because any friction in how banks get funded usually results in stricter approval criteria for your customers.

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