Community Bank LIFT Act
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The bill would ease the capital requirements that govern the community bank leverage ratio (CBLR) — a simplified financial-health standard — by raising the asset limit for eligible banks from $10 billion to $15 billion and lowering the required ratio range from 8%–10% to 6%–8%.
It would also require federal banking regulators to review the CBLR framework, report recommendations to Congress, and then propose and finalize updated rules within one year — aiming to draw more community banks into the simplified capital framework.
What this bill would do
What it would do
The bill would amend Section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act in two ways. First, it would raise the asset ceiling for banks that qualify for the community bank leverage ratio (CBLR) framework from $10 billion to $15 billion, making more banks eligible. Second, it would lower the statutory range for the leverage ratio itself from 8%–10% to 6%–8%, reducing the minimum capital cushion regulators can require within that framework.
The bill would also direct the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation to jointly review how the CBLR is structured, issue a report to Congress within 150 days of enactment with findings and specific recommendations, and then propose implementing rules within 180 days and finalize them within one year. The bill does not itself set a specific leverage ratio — that remains a regulatory determination within the new statutory range.
Key provisions
- 1Would raise the asset ceiling for qualifying community banks under the CBLR framework from $10 billion to $15 billion, expanding eligibility.
- 2Would lower the statutory leverage ratio range from 8%–10% to 6%–8%, reducing the minimum capital requirement regulators can set within the framework.
- 3Would require the Federal Reserve, OCC, and FDIC to review the CBLR framework and issue a report to Congress within 150 days, including specific recommendations on modifications.
- 4Would require the three agencies to propose rules within 180 days and finalize them within one year of enactment, incorporating the report's recommendations.
Who would be affected
Community banks currently holding between $10 billion and $15 billion in assets, who would become newly eligible for the simplified CBLR framework, and banks already in the framework that could benefit from a lower ratio requirement. Federal banking regulators — the Federal Reserve, OCC, and FDIC — would be directed to conduct a review and complete new rulemaking.
Why it matters
A lower leverage ratio minimum means community banks would need to hold less capital as a share of their assets to remain compliant, potentially freeing up funds for lending. A higher asset ceiling extends eligibility to mid-size community banks, reducing their compliance complexity. The regulatory review could produce further targeted relief for smaller community banks with the fewest resources to manage compliance burdens.
What would change
Changes to existing law
Amends Economic Growth, Regulatory Relief, and Consumer Protection Act, Section 201 (12 U.S.C. 5371 note) (Sec. 2(a))
Raises qualifying community bank asset threshold from $10 billion to $15 billion and lowers the leverage ratio statutory range from 8%–10% to 6%–8%.
Agencies directed to act
Effective dates
- Agencies must issue the CBLR review report to Congress
- Agencies must propose implementing rules
- Agencies must finalize implementing rules
How implementation would work
Upon enactment, the Federal Reserve, OCC, and FDIC would immediately begin a review of the CBLR framework and must issue a joint report to the House Financial Services Committee and Senate Banking Committee within 150 days. The report must include specific recommendations on calibration, asset-class treatment, qualifying criteria, opt-in/opt-out procedures, and any needed statutory changes. After reviewing the report, the agencies must propose implementing rules within 180 days and finalize them within one year of enactment. The specific leverage ratio within the new 6%–8% range remains a regulatory decision.
Legislative status & sources
Latest action
Placed on the Union Calendar, Calendar No. 319.
Official CRS summary
Show the CRS summaryHide the CRS summary
This 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.
Legislative subjects
Banking and financial institutions regulation; Competition and antitrust; Corporate finance and management; Finance and Financial Sector
Committee report
H. Rept. 119-367