TAILOR Act of 2025

The bill would require the OCC, the Federal Reserve, the FDIC, the NCUA, and the CFPB to take into account each institution's risk profile and business model whenever issuing proposed or final rules, and to tailor those rules to limit cost, staffing burdens, and other regulatory impacts as appropriate for the institutions involved. Agencies would be required to document their tailoring analysis in every notice of proposed rulemaking and every final rule, and to submit annual reports to Congress on actions taken to tailor their regulations. The bill also mandates a look-back review of all regulations issued under statutes enacted in the 15 years before introduction, with any required revisions due within three years of enactment.

Separately, the bill would direct federal banking agencies to promulgate regulations creating a short-form (reduced) call report for community banks eligible for the Community Bank Leverage Ratio, covering the first and third report of condition each year. It would also require a report, due within 18 months, on modernizing bank supervision — covering examiner workforce and training, supervisory technology, community bank-specific issues, and any statutory changes needed for more effective oversight.

Community banks, credit unions, and other financial institutions regulated by the OCC, Federal Reserve, FDIC, NCUA, and CFPB — particularly smaller institutions with lower risk profiles that currently face compliance costs designed for larger banks. The five named federal financial regulatory agencies bear the core procedural obligations. Congressional banking committees would receive annual tailoring reports and the modernization study.

Smaller financial institutions, especially community banks, frequently face compliance costs calibrated for the largest banks regardless of their actual risk level. If enacted, regulators would be legally required to justify and document risk-based tailoring in every rulemaking, and would have to revisit 15 years of existing regulations under the same standard — potentially reducing ongoing compliance burdens for community banks and credit unions across the country.

Each of the five agencies would incorporate a tailoring analysis into the standard notice-and-comment rulemaking process, disclosing in each proposed and final rule how it weighed institutional risk profiles and business models. For existing regulations, agencies must complete a review and any revisions within three years. Federal banking agencies would separately issue regulations creating a short-form call report for CBLR-eligible banks. Annual tailoring reports and an 18-month modernization report would go to the Senate Banking and House Financial Services Committees. The bill relies on agency rulemaking to implement most of its substantive requirements rather than imposing direct statutory mandates on institutions.