Sponsors
The bill aims to free up capital and simplify rules for community banks—boosting lending and regulatory clarity—while increasing the risk of weaker cushions against bank losses and potential taxpayer exposure, and raising concerns about rushed or uneven regulatory outcomes.
Community banks (especially smaller ones) will face lower effective capital requirements and simplified capital rules, freeing up capital and reducing regulatory burden so they can lend more to small businesses and rural communities.
The bill corrects a garbled statutory dollar figure and requires agencies to meet specific rulemaking deadlines, reducing legal uncertainty and providing faster regulatory clarity for banks and supervisors.
Streamlined Community Bank Leverage Ratio (CBLR) opt-in/opt-out and a more tailored treatment of asset classes lower compliance costs and better align capital requirements with actual risks, helping preserve local lending capacity.
Depositors and taxpayers face higher risk of bank losses and potential FDIC or taxpayer-backed interventions if reduced capital cushions increase the chance of bank failures or systemic stress.
Mandated faster rulemaking deadlines risk producing rushed or less-considered regulations, which could weaken supervision or create implementation errors.
Statutory changes and transition to new rules can impose short-term compliance and implementation costs on banks and supervisory agencies, potentially disrupting lending during the transition.
Based on analysis of 3 sections of legislative text.
Lowers the CBLR qualifying range to 6–8%, corrects a statutory numeric value, and directs regulators to review and simplify CBLR rules with set reporting and rulemaking deadlines.
Introduced September 10, 2025 by Young Kim · Last progress September 10, 2025
Changes the Community Bank Leverage Ratio (CBLR) law to correct a numeric value and lower the qualifying CBLR range from 8–10% to 6–8%, and directs bank regulators to review and update CBLR rules. The Federal Reserve, OCC, and FDIC must study how to simplify and expand CBLR eligibility, submit a report to Congress within 150 days, propose implementing rules within 180 days, and finalize rules within one year of enactment.