Community banks — the smaller, local institutions that often serve rural areas and small towns — face the same complex capital rules as the big banks, which can be a real burden. This bill would expand access to a simpler capital framework (called the Community Bank Leverage Ratio) by raising the asset threshold from $10 billion to $15 billion and lowering the required capital ratio to between 6% and 8%, down from the current 8%–10% range. Federal regulators would have 180 days to propose new rules and a year to finalize them, after studying how to encourage more small banks to use this streamlined system.
Congressional Summary
Community Bank Leverage Improvement and Flexibility for Transparency Act or the Community Bank LIFT ActThis bill relaxes requirements related to the community bank leverage ratio, which is a simplified capital standard applicable to qualified community banks. Community banks qualify by having less than $10 billion in assets, along with meeting other criteria.Specifically, the bill increases this asset limit to $15 billion. Additionally, it reduces the statutory range of the leverage ratio from 8%-10% to 6%-8%. (The specific rate is set by regulation. A reduction in the leverage ratio eases capital requirements.)The Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation must review and report on the leverage ratio and the rules issued to carry out its implementation. The report must include a consideration of how to modify the leverage ratio to encourage more participation in the community bank leverage ratio framework, with a focus on community banks with fewer assets and providing relief from regulatory compliance burdens.After this report is issued, the participating agencies must propose and finalize rules to implement this bill and the recommendations contained in the report.
Details
- Congress
- 119th
- Chamber
- Status
- summarized
- Action
- Action Date
- Date Added
- 2026-04-02