Financial Institution Regulatory Tailoring Enhancement Act

Bill Number

H.R. 3230

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Finance and Financial Sector

Status

Introduced

Latest Action

2025-06-20: Placed on the Union Calendar, Calendar No. 132.

Last Updated

2026-06-11T05:06:24Z

AI-Generated Summary

Purpose

The Financial Institution Regulatory Tailoring Enhancement Act (H.R. 3230) aims to reduce regulatory burdens on smaller and mid-sized financial institutions by raising the asset thresholds that trigger stricter oversight and compliance requirements. This is intended to promote economic growth by allowing these institutions more flexibility in operations, such as lending, while maintaining core protections.

Key Provisions

• Supervision by the Consumer Financial Protection Bureau (CFPB): Increases the asset threshold for when insured depository institutions and credit unions must undergo enhanced supervision and examinations by the CFPB from $10 billion to $50 billion in total assets.
• Volcker Rule Compliance: Raises the threshold for applying stricter standards under the Volcker Rule (which limits banks' risky trading activities) from $10 billion to $50 billion in assets for certain holding companies.
• Qualified Mortgage Exemptions: Adjusts the exemption from certain ability-to-repay rules for qualified mortgages (loans deemed safe for consumers) from $10 billion to $50 billion in assets for insured depository institutions.
• Capital and Leverage Requirements: Updates the thresholds for enhanced prudential standards, including leverage and risk-based capital rules (which ensure banks hold enough reserves against losses), from $10 billion to $50 billion in assets.

Significant Changes to Existing Law

• All targeted amendments replace the existing $10 billion asset threshold with a $50 billion threshold across multiple laws, including the Consumer Financial Protection Act of 2010, the Bank Holding Company Act of 1956, the Truth in Lending Act, and the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018.
• These changes build on prior reforms by further tailoring regulations to focus stricter rules only on larger institutions, exempting more mid-sized banks from complex compliance.

Potential Impacts

• On Government Agencies: Reduces the workload for regulators like the CFPB and the Federal Reserve by limiting their intensive oversight to fewer, larger institutions; this could free up resources for other priorities but might require adjustments in supervisory strategies.
• On Citizens: Could lead to increased access to credit and mortgages from mid-sized banks, potentially benefiting consumers and small businesses through more lending; however, it might slightly reduce some consumer protections for those dealing with institutions in the $10–50 billion range.
• On International Relations: Minimal direct impact, as the bill focuses on U.S. domestic financial institutions; it does not alter international banking standards or cross-border rules.

Main Stakeholders Affected

• Financial Institutions: Primarily community banks, regional banks, and credit unions with assets between $10 billion and $50 billion, who gain relief from costly regulations; larger banks (over $50 billion) remain fully subject to rules.
• Regulators: Agencies such as the CFPB, Federal Reserve, and Office of the Comptroller of the Currency, which will supervise fewer institutions at enhanced levels.
• Consumers and Borrowers: Individuals and small businesses seeking loans or mortgages, who may experience easier access to financing but with potentially less rigorous oversight on certain products.
• Industry Groups: Banking associations advocating for deregulation, who support the bill, versus consumer advocacy groups concerned about reduced protections.

Notable Legal, Constitutional, or Political Implications

• Legal Implications: The bill makes targeted statutory amendments without creating new enforcement mechanisms, ensuring consistency with existing frameworks like the Dodd-Frank Act; it avoids broad overhauls, reducing risks of legal challenges on overreach.
• Constitutional Implications: No apparent issues, as it involves congressional authority over economic regulation under the Commerce Clause; it does not infringe on individual rights or federalism principles.
• Political Implications: Represents a deregulatory approach that could spark debate between pro-growth Republicans (who introduced the bill) and those prioritizing financial stability post-2008 crisis; passage might signal a shift toward lighter touch regulation, influencing future banking reforms.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Barr, Andy [R-KY-6]

Cosponsors (2)

Rep. Meuser, Daniel [R-PA-9], Rep. Sessions, Pete [R-TX-17]

Recent Actions

• 2025-06-20: Placed on the Union Calendar, Calendar No. 132.
• 2025-06-20: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-165.
• 2025-06-20: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-165.
• 2025-05-21: Ordered to be Reported (Amended) by the Yeas and Nays: 29 - 23.
• 2025-05-21: Committee Consideration and Mark-up Session Held
• 2025-05-07: Referred to the House Committee on Financial Services.
• 2025-05-07: Introduced in House
• 2025-05-07: Introduced in House

Bill Versions

• Financial Institution Regulatory Tailoring Enhancement Act — issued 2025-05-07 — PDF (2 pages)
• Financial Institution Regulatory Tailoring Enhancement Act — issued 2025-06-20 — PDF (6 pages)