U.S. regulators likely will miss the Jan. 1, 2013, deadline for finalizing the Basel III global capital and liquidity requirements for financial institutions, American Banker reported Nov. 6.

The Federal Reserve Board, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency received more than a thousand comment letters from banks and other financial firms expressing concern about the proposed rule changes, and it’s unlikely that regulators will have time to address all the issues before the end of the year.

Community banks are particularly concerned about Basel III requirements and the potential cost burdens the smaller institutions may face, American Banker reported. Small to mid-sized banks have captured Congressional attention, leading members of both parties of the Senate to send a joint letter to federal regulators in September stating that the new rules were too complex and cost prohibitive for community banks to implement.

Greg Lyons, a partner at the New York law firm Debevoise and Plimpton, noted that it’s highly unlikely regulators will have the new rules finalized by Jan. 1. “It’s a bit much to ask the industry, especially community banks and the regional banks, which are subject to some of these rules, to start living with it on such a quick basis,” he told American Banker.

Financial leaders around the world agreed to adopt the new Basel III standards in December 2010, but so far, only eight of the 27 countries that make up the Basel Committee on Banking Supervision have finished the rule-writing process. The U.S. is among 17 counterparts, including the European Union, that only have published drafts of the standards. Two nations have yet to even release proposals.

American Banker reported that European leaders already have indicated that they may delay the phasing in of the new guidelines by as much as a year, which also would give the U.S. the opportunity to spend more time working on the rules.