(Bloomberg) -- The head of one of the largest mortgage trade groups in the US said proposed rules on bank capital levels have the potential to upend the nation’s entire system of financing real estate.

The proposal, known as Basel III Endgame, would force lenders to thicken the cushions they create to absorb unexpected losses. Regulators initiated the proposed international overhaul in response to the financial crisis of 2008. If approved, the rules would require big banks to increase their capital cushion by almost 20% to ensure they can survive another crunch. 

The changes are “called the end-game proposal, but only one of those words is accurate,” Bob Broeksmit, chief executive officer of the Mortgage Bankers Association, said at a conference in San Diego Monday. “Basel III could be the end of bank real estate finance as we know it.”

Banks with at least $100 billion in assets would have to boost the amount of capital set aside by an estimated 16%. The eight largest banks face about a 19% increase, with lenders between $100 billion and $250 billion in assets seeing as little as 5% more, according to regulators. 

Read More: Why Bigger ‘Capital Cushions’ Have Banks On Edge: QuickTake 

Basel III targets banks that handle about 50% of all commercial real estate lending, according to Broeksmit. It would force many commercial property lenders to hold even more capital, which would stifle lending, reduce job opportunities and weigh on local economies, he said. 

“Washington, DC, should be helping you lend more, not forcing you to lend less,” he said. “We’re fighting Basel III tooth and nail and will continue to do so.”

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