TRUST Act of 2026
- Bill Number
- S. 3830
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2026-02-11: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Last Updated
- 2026-03-26T11:03:17Z
AI-Generated Summary
Purpose
The Tailored Regulatory Updates for Supervisory Testing Act of 2026 (TRUST Act of 2026) aims to update federal banking examination rules to reduce regulatory burdens on smaller, well-managed banks. It allows federal banking agencies to conduct less frequent on-site reviews for qualifying institutions with total assets under $6 billion, promoting tailored supervision based on a bank's size and risk profile.
Key Provisions
- Amends Section 10(d) of the Federal Deposit Insurance Act (FDIC Act), which governs how often federal banking agencies (like the Federal Deposit Insurance Corporation or FDIC) must examine insured banks.
- Raises the asset threshold for eligible institutions from $3 billion to $6 billion in two specific parts of the law:
- Paragraph (4)(A): Permits examinations of qualifying well-managed banks with under $6 billion in assets at least once every 18 months, rather than annually.
- Paragraph (10): Applies the same $6 billion threshold for similar examination cycle adjustments.
- "Qualifying" institutions are those rated as well-managed by examiners, meaning they pose lower risks and demonstrate strong financial health.
Significant Changes to Existing Law
- Previously, under the FDIC Act, banks with $3 billion or more in assets generally required annual full-scope examinations, with exceptions for well-managed smaller banks examined every 18 months if under $3 billion.
- This bill doubles the asset threshold to $6 billion, expanding the number of banks eligible for the 18-month examination cycle. It does not alter requirements for larger banks or those with higher risk ratings, which still face more frequent reviews.
Potential Impacts
- On government agencies: Federal banking agencies may experience reduced workload and costs from fewer mandatory examinations, allowing them to focus resources on larger or riskier institutions.
- On citizens: Smaller banks could allocate more time and resources to lending and community services, potentially increasing access to credit for individuals and small businesses in underserved areas. However, less frequent oversight might slightly elevate risks if issues arise undetected.
- On international relations: No direct impact, as the bill focuses on domestic U.S. banking supervision.
Main Stakeholders Affected
- Federal banking agencies (e.g., FDIC, Federal Reserve, Office of the Comptroller of the Currency): Responsible for implementing and conducting examinations; they gain flexibility in scheduling.
- Insured depository institutions (community and regional banks with $3–6 billion in assets): Benefit from reduced regulatory frequency if well-rated, easing compliance costs.
- Bank customers and communities: Indirectly affected through potential improvements in banking services from less burdened smaller banks.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens the principle of "tailored regulation" under U.S. banking law, aligning with post-2010 Dodd-Frank Act reforms that emphasize risk-based supervision. No changes to core safety and soundness standards.
- Constitutional: No apparent issues; the bill operates within Congress's authority to regulate interstate commerce and banking under Article I, Section 8.
- Political: Supports bipartisan efforts to ease regulations on small banks (introduced by Sens. Budd, Kim, Kennedy, and Alsobrooks), potentially appealing to rural and community banking advocates. It could face debate over balancing deregulation with financial stability, especially after recent bank failures highlighting supervision needs.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (5)
Sen. Kim, Andy [D-NJ], Sen. Kennedy, John [R-LA], Sen. Alsobrooks, Angela D. [D-MD], Sen. Ricketts, Pete [R-NE], Sen. Warnock, Raphael G. [D-GA]
Recent Actions
- 2026-02-11: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2026-02-11: Introduced in Senate
Bill Versions
- Tailored Regulatory Updates for Supervisory Testing Act of 2026 — issued 2026-02-11 — PDF (2 pages)