Community Bank Representation Act
- Bill Number
- H.R. 6554
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2026-02-25: Placed on the Union Calendar, Calendar No. 458.
- Last Updated
- 2026-06-11T23:26:43Z
AI-Generated Summary
Purpose
The Community Bank Representation Act (H.R. 6554) aims to strengthen the Federal Reserve's focus on community banks—smaller financial institutions that serve local communities—by assigning specific roles to a Board member with expertise in this area. It ensures that supervision and regulation of these banks are informed by relevant experience and adjusted over time for economic changes, promoting fairer oversight without overburdening smaller entities.
Key Provisions
- Designation of a Community Bank Expert: The Chairman of the Federal Reserve Board must select one Board member with primary experience working in or supervising community banks. This member will develop policy recommendations and oversee the supervision and regulation of banks with less than $17 billion in total assets, in consultation with the Vice Chairman for Supervision and any other relevant Board members.
- Congressional Reporting Requirement: This designated member (if not the Vice Chairman for Supervision) must testify before the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services at semi-annual hearings. These hearings will cover the Federal Reserve Board's efforts, activities, objectives, and plans related to supervising and regulating smaller banks (under $17 billion in assets).
- Annual Threshold Adjustment: At the end of each year when U.S. nominal gross domestic product (GDP—a measure of the country's total economic output) increases, the Federal Reserve Board must adjust the $17 billion asset threshold (and related figures in other laws) upward by the percentage increase in GDP compared to the highest GDP year in the prior five years. This uses official GDP data from the Bureau of Economic Analysis to account for inflation and economic growth.
- Consultation in Related Councils: Amends the Federal Financial Institutions Examination Council Act of 1978 to require the Federal Reserve Governor on that council to consult with the designated community bank expert when handling matters related to smaller banks.
Significant Changes to Existing Law
- Updated Asset Threshold: Removes an outdated reference to banks with less than $10 billion in assets from the Federal Reserve Act and introduces a new $17 billion threshold for defining community banks in supervision and regulation contexts, making it more inclusive of mid-sized institutions.
- New Responsibilities for Board Members: Adds explicit duties for a specialized Board member focused on community banks, which were not previously outlined in the Federal Reserve Act. This includes policy development, oversight, and mandatory congressional appearances, shifting from a general supervisory role to one tailored for smaller banks.
- Inflation-Linked Adjustments: Introduces a novel mechanism (paragraph 13 in Section 10 of the Federal Reserve Act) to automatically update dollar thresholds based on GDP growth, preventing thresholds from becoming obsolete due to inflation— a feature absent in prior law.
- Enhanced Consultation: Modifies the Federal Financial Institutions Examination Council Act to mandate input from the community bank expert, ensuring coordinated regulation across federal banking agencies.
Potential Impacts
- On Government Agencies: The Federal Reserve Board will need to allocate resources for policy development, oversight, and semi-annual congressional testimonies, potentially streamlining internal decision-making for smaller banks. The Federal Financial Institutions Examination Council may see more consistent handling of community bank issues through required consultations.
- On Citizens: Local communities relying on community banks for loans, mortgages, and basic banking services could benefit from regulations better suited to smaller institutions, possibly leading to more accessible financial services and reduced regulatory burdens that might otherwise stifle lending.
- On International Relations: Minimal direct impact, as the bill focuses on domestic U.S. banking regulation; however, it could indirectly influence global perceptions of U.S. financial stability by emphasizing support for diverse banking sectors.
Main Stakeholders Affected
- Community Banks: Primary beneficiaries, gaining dedicated Federal Reserve oversight and policy input to address their unique challenges, such as compliance costs relative to their size.
- Federal Reserve Board and Staff: Must implement new roles, consultations, and adjustments, affecting internal operations and expertise requirements for appointments.
- Congressional Committees: The Senate Banking Committee and House Financial Services Committee will receive regular updates, enhancing their oversight of Federal Reserve activities on smaller banks.
- Larger Banks and Financial Institutions: Indirectly affected, as resources and policies shift toward community banks, potentially altering competitive dynamics in the broader banking sector.
- Banking Regulators: Entities like the Federal Financial Institutions Examination Council will incorporate more community bank perspectives in coordinated efforts.
Notable Legal, Constitutional, or Political Implications
- Legal Implications: Reinforces the Federal Reserve's statutory mandate under the Federal Reserve Act to balance supervision across bank sizes, potentially reducing litigation risks from smaller banks claiming inadequate representation. The GDP-based adjustment provides a clear, data-driven method to update thresholds, minimizing arbitrary changes.
- Constitutional Implications: Aligns with Congress's enumerated powers to regulate commerce and coin money (Article I, Section 8), without raising separation-of-powers concerns, as it directs an executive agency (the Federal Reserve) while preserving congressional oversight through hearings.
- Political Implications: Enhances accountability by mandating expert input and public reporting, which could foster bipartisan support for community banking issues in rural and underserved areas. It signals a policy priority on economic equity for smaller institutions amid debates over "too big to fail" banks, but may spark discussions on whether the $17 billion threshold adequately captures "community" banks versus regional ones.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. De La Cruz, Monica [R-TX-15]
Cosponsors (3)
Rep. Williams, Roger [R-TX-25], Rep. Sessions, Pete [R-TX-17], Rep. Nunn, Zachary [R-IA-3]
Recent Actions
- 2026-02-25: Placed on the Union Calendar, Calendar No. 458.
- 2026-02-25: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-533.
- 2026-02-25: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-533.
- 2025-12-17: Ordered to be Reported (Amended) by the Yeas and Nays: 29 - 22.
- 2025-12-17: Committee Consideration and Mark-up Session Held
- 2025-12-16: Committee Consideration and Mark-up Session Held
- 2025-12-10: Referred to the House Committee on Financial Services.
- 2025-12-10: Introduced in House
- 2025-12-10: Introduced in House
Bill Versions
- Community Bank Representation Act — issued 2025-12-10 — PDF (5 pages)
- Community Bank Representation Act — issued 2026-02-25 — PDF (8 pages)