Sponsors
The bill eases capital and compliance burdens for many community and regional banks to free up lending and reduce costs, but it increases risks to depositors and taxpayers by lowering capital cushions and narrowing enhanced supervision, creating a trade-off between bank relief and financial-system safety.
Community banks (and their customers) would face lower leverage requirements and a simplified Community Bank Leverage Ratio (CBLR) opt-in, freeing capital for lending and reducing regulatory burden.
Banks with assets under $5 billion would be removed from enhanced supervisory requirements, lowering compliance costs for many regional and smaller banks.
Regulated firms and supervisors would gain clearer timelines (statutory deadlines and a required joint congressional report), improving predictability for rulemaking and enabling more timely legislative oversight.
Taxpayers and depositors could face higher risk because lower leverage requirements and raising the threshold for enhanced supervision may leave some banks with thinner capital buffers and lighter oversight, increasing the chance of bank failures and potential taxpayer-funded resolutions.
Simplifying opt-in rules and changing CBLR mechanics could create transitional implementation uncertainty and short-term regulatory complexity, raising compliance and supervisory costs during the shift.
If the report’s recommendations require statutory changes, lawmakers may face tradeoffs and delays between reducing burden and maintaining safety, prolonging uncertainty for banks and markets.
Based on analysis of 3 sections of legislative text.
Lowers the CBLR range to 6–8%, raises a statutory dollar threshold to $5 billion, and orders regulators to review and revise CBLR rules with set reporting and rulemaking deadlines.
Changes the Community Bank Leverage Ratio (CBLR) framework to make it easier for more community banks to use a simpler leverage-based capital standard: it lowers the CBLR target range to 6–8% and raises a statutory dollar threshold to $5,000,000,000, and it directs the Federal Reserve, OCC, and FDIC to review the CBLR rules and issue a report with recommendations and timely rulemakings. The three agencies must report findings and recommendations within 150 days and must propose and finalize implementing rules on a set schedule (propose within 180 days; finalize within one year).
Introduced September 10, 2025 by Young Kim · Last progress September 10, 2025