HR6955-119

What This Bill Does

The Main Street Act is a large banking-regulatory package aimed at community banks, de novo bank formation, supervisory process, deposits, bank mergers, bank resolution, and bank-fintech partnerships. It begins by requiring federal banking agencies to phase in capital requirements for newly formed banks and holding companies over three years. It requires OCC and NCUA annual reporting on national bank, federal savings association, and federal credit union charter applications. It also requires studies on rural depository growth and barriers, expands national bank community-development investment authority from 15 percent to 20 percent, requires annual Treasury testimony on the CDFI Fund, and changes the CDFI Bond Guarantee Program by reducing the minimum guarantee amount to $25 million and adjusting guarantee calculations.

The bill raises or indexes multiple regulatory thresholds. It directs regulators to account for low-risk institutions, raises the Small Bank Holding Company Policy Statement threshold, increases the community bank leverage ratio asset cap, raises enhanced-regulation thresholds from $100 billion to $150 billion and from $250 billion to $370 billion, adjusts thresholds by current-dollar GDP, raises several community-bank tailoring thresholds, and reduces credit union board meeting frequency. These provisions generally reduce regulatory burden for community banks, smaller holding companies, and some regional banks while requiring regulators to rewrite rules and monitor larger thresholds.

The supervision title makes CAMELS ratings more objective, imposes timelines on exams and reports, creates written-determination procedures for planned bank actions, establishes an Office of Independent Examination Review and appeal rights for material supervisory determinations, provides examination relief for well-managed and well-capitalized institutions, changes supervisory testing thresholds, adds stress-test transparency in earlier versions, requires community-bank representation on the Federal Reserve Board, and limits use of reputational risk against legally operating businesses. The bill also revises FDIC board composition and terms, requires guidance disclaimers stating that guidance is not binding law, expands EGRPRA regulatory review, and requires Federal Reserve and OCC reporting on global financial regulatory forums.

The deposits and liquidity title requires a Federal Reserve review of discount-window operations, revises reciprocal-deposit treatment so more deposits can remain local, and creates a limited custodial-deposit brokered-deposit exception for eligible institutions. The merger and resolution titles reduce competition review for mergers resulting in institutions under $10 billion, require GAO and inspector general studies of merger commitments and processing, clarify Federal Reserve application completeness timelines, modify FDIC least-cost and failing-bank acquisition exceptions, require studies on bridge-bank participation, and require GAO review of systemic-risk determinations. The final title extends merchant-banking holding periods and requires regulators to study bank-fintech partnerships.

Who Benefits and How

De novo bank organizers benefit from phased-in capital requirements and more transparent charter-application reporting. Community banks benefit from higher thresholds, examination relief, deposit access changes, community-development investment flexibility, and more representation in Federal Reserve supervision. Rural depositories benefit from required studies on growth, capital adequacy, profitability, and statutory or regulatory barriers. CDFI lenders benefit from annual Treasury testimony and lower CDFI Bond Guarantee Program minimums. Federal credit unions benefit from charter-application transparency and less frequent board-meeting requirements. Small bank holding companies benefit from a higher policy-statement threshold. Bank merger applicants benefit from narrower competition review, processing studies, and clearer application completeness rules. Fintech companies benefit from a federal study focused on effective bank-fintech partnerships. Financial institutions under examination benefit from clearer CAMELS standards, exam timelines, written determinations, and independent review rights.

Who Bears the Burden and How

Federal banking agencies must issue rules, rewrite thresholds, conduct studies, create reports, administer new examination-review processes, and adjust merger, supervision, guidance, and deposit rules. Federal Reserve staff must revise holding-company policy, stress testing or enhanced-regulation thresholds, discount-window processes, global-forum disclosures, and community-bank supervision roles. FDIC staff must adjust board procedures, brokered-deposit rules, least-cost exceptions, failing-bank acquisition rules, and systemic-risk documentation. OCC charter staff and NCUA charter staff must publish detailed annual application data. GAO analysts and inspector general staff must perform multiple merger, resolution, discount-window, and systemic-risk reviews. Consumer protection advocates and competition advocates may bear policy risk if higher thresholds and narrower merger review reduce regulatory scrutiny. Federal taxpayers and the Deposit Insurance Fund may face increased exposure if bank-resolution or supervisory relief weakens safeguards.

Key Provisions

• Requires a three-year capital phase-in for newly formed depository institutions and holding companies.
• Requires OCC and NCUA annual reports on charter applications, approval timing, denials, withdrawals, and inactive applications.
• Directs federal banking agencies to study rural depository growth, profitability, capital adequacy, and barriers.
• Expands national bank community-development investment limits and improves CDFI Fund and CDFI Bond Guarantee Program transparency.
• Raises or indexes community-bank, holding-company, leverage-ratio, enhanced-regulation, and interlock thresholds.
• Directs CAMELS, examination-timeline, written-determination, and independent-examination-review reforms.
• Requires guidance clarity statements and global regulatory forum disclosures.
• Provides discount-window review, reciprocal-deposit changes, and custodial-deposit brokered-deposit relief.
• Limits competition review for smaller bank mergers and requires merger-process studies and inspector general reviews.
• Modifies FDIC least-cost, failing-bank acquisition, and systemic-risk review procedures.
• Extends merchant-banking holding periods and requires a bank-fintech partnership study.