A top JPMorgan Chase executive is warning that proposed federal bank capital rules could damage small businesses across the country, cautioning that Main Street may have less access to credit from banks as regulators move to finalize Basel III Endgame, one of the most important global financial regulatory standards to date.

Chase Business Bank CEO Stevie Baron said in a memo obtained by Fox News Digital that the current framework could have unintended consequences for small businesses, as capital requirements could prevent lending. Capital rules set how much loss-absorbing equity banks must hold against their assets, and banks argue that as those thresholds rise, lending becomes more expensive to fund — the core of the industry's push to soften the current draft.

"The latest revisions to the 2023 proposal are a step in the right direction, but as we reiterated to regulators, more work is needed to ensure the final rules do not increase the cost of lending or reduce access to credit for small businesses," Baron said.

Baron specifically noted proposed changes to the Global Systemically Important Bank (GSIB) surcharge, saying that formula could encourage trading over lending, raising borrowing costs for millions of small business owners. JPMorgan Chase is considered a GSIB and is required to adhere to higher loss-absorbing equity and capital requirements than other, smaller banks. The surcharge is an additional capital buffer layered on top of baseline requirements, calculated with factors intended to gauge the risk an institution poses to the broader financial system.

"The Fed should reconsider the proposed changes to the GSIB surcharge calculation, and, in particular, retain the current approach to the short-term wholesale funding factor that accounts for the size and funding diversification benefits of universal banks," Baron added. "Regulators should ensure the surcharge framework does not penalize the everyday lending and banking services relied on by small businesses."

He also argued that "capital requirements should not increase just because the economy is growing or routine activity is expanding," and that "policymakers should ensure the capital framework operates as a coherent whole, rather than layering multiple requirements on top of the same risks."

Baron oversees more than 7 million small and medium-sized businesses and over $19 billion in business banking average loans in fiscal year 2025. Unlike large corporations that can raise money through bond and stock markets, small businesses typically depend on banks for credit.

His memo also ties into the bank's broader policy agenda. The American Dream Initiative, announced by JPMorgan Chase CEO Jamie Dimon on Fox News' "Fox and Friends" in March, seeks to expand the total number of small and medium-sized businesses to ten million, in addition to a number of changes at the bank to promote growth in the U.S. economy. A senior JPMorgan Chase executive told Fox News Digital that acting Labor Secretary Keith Sonderling visited the bank's headquarters last week to discuss the initiative and the steps it is taking to implement changes under the Trump administration.

The regulatory backdrop dates to the 2008 financial crisis, after which global regulators developed the Basel III regulatory package to ensure banks have enough capital and financial cushion to weather economic volatility and protect taxpayers. U.S. regulatory agencies, including the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller, initially proposed the framework, dubbed Basel III Endgame, in 2023, but withdrew the draft for revision after pushback. In March, Trump administration regulators proposed the latest draft of Basel III Endgame, with a comment deadline of July, though banks are still lobbying for changes as regulators move to enact permanent policy. The 2023 withdrawal shows industry pushback has already reshaped the plan once, and what regulators decide next — including whether the proposed GSIB surcharge changes stand — will determine how much extra capital the largest U.S. banks are required to hold once the rule becomes permanent.

Top lawmakers, including Senate Banking Committee Chairman Tim Scott, R-South Carolina, have also warned about potential lending shortfalls if the framework is enacted.

"I have long said that overly complicated capital rules can slow economic growth without making our financial system safer," Scott said in a March statement. "The Biden administration's plan would have made it harder to get a mortgage, harder to start a business, and more expensive to make ends meet. That is the wrong direction when families are already feeling squeezed. There is still more work to do. We need rules that keep our financial system strong while making sure banks can lend, and our economy can grow."

Baron aligned with Scott's view that there needs to be assurance banks will be able to lend freely, stating in his memo that small businesses could be restricted from expansion and investing in growth should there be limited access to capital.

Baron's memo is part of a new JPMorgan Chase series titled "from the desk of," in which top executives, including Dimon, have shared their takes on various economic and political policies and how they affect America's largest bank.