Community Bank LIFT Act

Bill Number: H.R. 5276
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Finance and Financial Sector
Status: Introduced
Latest Action: 2025-11-04: Placed on the Union Calendar, Calendar No. 319.
Last Updated: 2026-05-02T19:06:20Z

AI-Generated Summary

Purpose

The Community Bank Leverage Improvement and Flexibility for Transparency Act (H.R. 5276), also known as the Community Bank LIFT Act, aims to simplify and adjust regulatory requirements for smaller banks. It modifies the Community Bank Leverage Ratio (CBLR)—a straightforward measure of a bank's capital strength compared to its assets—to make it easier for community banks to comply with federal rules, reduce paperwork burdens, and encourage more banks to use this simplified framework. This supports community banks in lending to local businesses and individuals without complex risk assessments.

Key Provisions

Asset Threshold Adjustment: Raises the maximum asset size for banks eligible to use the CBLR from $10 billion to $15 billion.
Leverage Ratio Range Update: Lowers the required CBLR percentage from 8% to 10% to a new range of 6% to 8%, making it easier for qualifying banks to meet the standard.
Rulemaking Requirement: The Federal Reserve, Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC) must propose rules within 180 days of enactment and finalize them within one year. These rules implement the changes and incorporate recommendations from a required review report.
Review and Report on CBLR:
Agencies must review the CBLR framework, focusing on adjustments to attract more small community banks (especially those with fewer assets) and simplify compliance.
Within 150 days of enactment, agencies submit a report to the House Committee on Financial Services and Senate Committee on Banking, Housing, and Urban Affairs. The report includes findings and recommendations on:
How to calculate the ratio's components (numerator for capital and denominator for assets).
Better handling of specific bank assets or loans to match community banks' lower-risk profiles.
Criteria for qualifying as a community bank.
Easier processes for banks to join or leave the CBLR system, including simpler reporting and transition rules.
Extended grace periods for switching between CBLR and other regulatory methods.
Any needed changes to federal law.

Significant Changes to Existing Law

This bill amends Section 201 of the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act, which introduced the CBLR as a simplified alternative to more detailed capital rules for banks under $10 billion in assets. Key changes include:

Expanding eligibility to larger banks (up to $15 billion in assets), allowing more institutions to benefit from streamlined regulations.
Reducing the minimum CBLR threshold, which eases capital requirements and could free up resources for lending.
Mandating a formal review and public report, which could lead to further tweaks not directly specified in the bill, promoting ongoing regulatory flexibility.

Potential Impacts

On Government Agencies: The Federal Reserve, OCC, and FDIC face new deadlines for rulemaking and reporting, increasing short-term administrative work but potentially reducing long-term oversight complexity for smaller banks.
On Citizens: Community banks may lend more easily to local customers (e.g., small businesses and homebuyers), improving access to credit in rural and underserved areas without raising systemic risks.
On International Relations: Minimal direct impact, as the bill focuses on domestic U.S. banking regulations; it does not alter international banking standards or cross-border rules.
Overall, it could boost local economic activity by supporting community banks, which hold about 15% of U.S. bank assets but serve many small communities.

Main Stakeholders Affected

Community Banks: Primary beneficiaries, especially those with assets under $15 billion, gaining easier compliance and potential cost savings on regulatory reporting.
Federal Banking Regulators: Federal Reserve, OCC, and FDIC, who must conduct reviews, issue rules, and adapt supervision to the updated framework.
Congressional Committees: House Financial Services and Senate Banking committees, receiving the report to guide future oversight or legislation.
Bank Customers and Local Economies: Indirectly affected through potentially increased lending and economic growth in communities served by these banks.

Notable Legal, Constitutional, or Political Implications

Legal Implications: Strengthens the 2018 law's goal of tailored regulation for smaller banks, potentially reducing litigation over compliance burdens. The mandated review ensures evidence-based adjustments, aligning with administrative law requirements for reasoned rulemaking.
Constitutional Implications: None significant; the bill operates within Congress's authority to regulate banking under the Commerce Clause and does not raise free speech, due process, or federalism concerns.
Political Implications: Supports bipartisan efforts to ease post-2008 financial crisis rules for "Main Street" banks, contrasting with stricter oversight for larger institutions. It may influence debates on financial deregulation, emphasizing simplicity over one-size-fits-all approaches, without altering broader consumer protections.

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

Sponsor

Rep. Kim, Young [R-CA-40]

Recent Actions

2025-11-04: Placed on the Union Calendar, Calendar No. 319.
2025-11-04: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-367.
2025-11-04: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-367.
2025-09-16: Ordered to be Reported (Amended) by the Yeas and Nays: 33 - 19.
2025-09-16: Committee Consideration and Mark-up Session Held
2025-09-10: Referred to the House Committee on Financial Services.
2025-09-10: Introduced in House
2025-09-10: Introduced in House

Bill Versions

Community Bank Leverage Improvement and Flexibility for Transparency Act — issued 2025-09-10 — PDF (4 pages)
Community Bank Leverage Improvement and Flexibility for Transparency Act — issued 2025-11-04 — PDF (8 pages)