Community Bank Regulatory Tailoring Act

Bill Number

H.R. 7056

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Finance and Financial Sector

Status

Introduced

Latest Action

2026-03-19: Placed on the Union Calendar, Calendar No. 480.

Last Updated

2026-06-11T23:41:24Z

AI-Generated Summary

Purpose of the Legislation

The "Community Bank Regulatory Tailoring Act" (H.R. 7056) aims to update outdated dollar-amount thresholds in various U.S. financial laws. These thresholds determine when banks, credit unions, and other institutions face certain regulatory requirements. The bill adjusts them to reflect historical economic growth (measured by increases in current-dollar U.S. gross domestic product, or GDP) and establishes a process for future periodic updates. This is intended to reduce regulatory burdens on smaller financial institutions, making rules more aligned with today's economy.

Key Provisions

• Short Title (Section 1): The act is named the "Community Bank Regulatory Tailoring Act."
• Initial Threshold Adjustments (Section 2): Increases specific dollar thresholds across multiple laws, including:
• Bank Holding Company Act: Raises limits from $1 million to $3 million (for certain reporting) and from $10 billion to $15 billion (for enhanced supervision of large holding companies).
• Community Reinvestment Act: Increases the asset size exemption from $250 million to $800 million for certain community development requirements.
• Depository Institution Management Interlocks Act: Adjusts thresholds for management overlaps between competing institutions, e.g., from $100 million to $600 million for small organizations and from $2.5 billion to $10 billion for larger ones.
• Dodd-Frank Act: Raises systemic risk thresholds from $50 billion to $105 billion and other limits like from $1 million to $5 million for resolution planning.
• Federal Credit Union Act: Updates insurance and risk thresholds, e.g., from $10 million to $34 million for de minimis (minimal) risk calculations and from $50 million to $170 million for capital requirements.
• Federal Deposit Insurance Act: Increases limits for assessments and safety standards, e.g., from $5 billion to $8 billion for well-capitalized banks.
• Other laws (e.g., Federal Home Loan Bank Act, Federal Reserve Act, Home Mortgage Disclosure Act, Truth in Lending Act): Similar upward adjustments, such as from $1 billion to $3 billion for membership eligibility or from $10 billion to $15 billion for qualified mortgage rules.
• Periodic Adjustments (Section 3): Starting April 1, 2031, and every five years thereafter, the Federal Reserve Board must recalculate and increase these thresholds based on GDP growth ratios published by the Department of Commerce. Adjustments round upward in specified increments (e.g., to the nearest $50 billion for amounts over $100 billion, or $500 for smaller amounts). The board publishes changes in the Federal Register, effective January 1 of the following year.

Significant Changes to Existing Law

The bill makes one-time increases to over 30 specific dollar thresholds in 14 different financial statutes, which have not been updated since the post-2008 financial crisis era (e.g., Dodd-Frank Act thresholds from 2010). It introduces a new mechanism for automatic, inflation-adjusted updates every five years, tied to GDP data. This replaces static figures with dynamic ones, preventing thresholds from becoming outdated due to economic expansion. Minor fixes include correcting a typo ("De minimus" to "De minimis" in the Federal Credit Union Act).

Potential Impacts

• On Government Agencies: Reduces administrative workload for regulators like the Federal Reserve, FDIC (Federal Deposit Insurance Corporation), and NCUA (National Credit Union Administration) by exempting more mid-sized institutions from complex reporting, stress testing, and oversight. This could streamline supervision but might slightly increase monitoring of larger entities.
• On Citizens: May encourage more lending and financial services from community banks and credit unions, potentially improving access to credit in local areas (e.g., for home loans or small businesses) without heightened regulatory hurdles. However, it could indirectly affect consumer protections if fewer institutions face strict disclosure rules.
• On International Relations: Minimal impact, as the changes focus on domestic U.S. banking regulations with no direct provisions for foreign entities or cross-border activities.

Main Stakeholders Affected

• Community Banks and Credit Unions: Primary beneficiaries, as higher thresholds mean fewer face stringent rules like enhanced prudential standards or interlock restrictions, allowing focus on local lending.
• Bank Holding Companies: Mid-sized firms (e.g., $10–15 billion in assets) gain relief from supervision tailored for "systemically important" institutions.
• Regulators (e.g., Federal Reserve, FDIC, NCUA): Must implement adjustments and periodic reviews, shifting resources from smaller to larger institutions.
• Consumers and Borrowers: Indirectly affected through potential changes in lending availability and mortgage disclosures.
• Larger Financial Institutions: May see competitive advantages erode slightly, as smaller rivals face lighter regulation.

Notable Legal, Constitutional, or Political Implications

• Legal Implications: The bill harmonizes thresholds across statutes, reducing inconsistencies in banking oversight (e.g., aligning Dodd-Frank's systemic risk levels with GDP growth). It mandates use of official Commerce Department data, ensuring transparency and limiting agency discretion.
• Constitutional Implications: None significant; the changes fall under Congress's enumerated powers to regulate interstate commerce and banking, without infringing on states' rights or individual liberties.
• Political Implications: Positions as relief for community banks against post-financial crisis regulations perceived as overly burdensome on smaller players. It could appeal to bipartisan interests in economic growth but face criticism from those favoring stricter oversight to prevent future crises. The five-year review cycle promotes long-term adaptability without frequent legislative intervention.

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. Gottheimer, Josh [D-NJ-5], Rep. Meuser, Daniel [R-PA-9]

Recent Actions

• 2026-03-19: Placed on the Union Calendar, Calendar No. 480.
• 2026-03-19: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-558.
• 2026-03-19: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-558.
• 2026-01-22: Ordered to be Reported (Amended) by the Yeas and Nays: 33 - 21.
• 2026-01-22: Committee Consideration and Mark-up Session Held
• 2026-01-14: Referred to the House Committee on Financial Services.
• 2026-01-14: Introduced in House
• 2026-01-14: Introduced in House

Bill Versions

• Community Bank Regulatory Tailoring Act — issued 2026-01-14 — PDF (11 pages)
• Community Bank Regulatory Tailoring Act — issued 2026-03-19 — PDF (14 pages)