HR7056-119

What This Bill Does

The Community Bank Regulatory Tailoring Act raises numerous statutory dollar thresholds in banking and financial-regulation laws to account for historical growth in current-dollar U.S. GDP. It increases Bank Holding Company Act thresholds, including a section 5(c) threshold from $1 million to $3 million and a Volcker-related threshold from $10 billion to $15 billion. It raises the Community Reinvestment Act small-bank threshold from $250 million to $800 million and increases Depository Institution Management Interlocks Act thresholds, including $100 million to $600 million, $50 million to $110 million, and certain market thresholds to $10 billion.

The bill also raises Dodd-Frank orderly liquidation and incentive-compensation thresholds, Federal Credit Union Act thresholds, and other bank-regulatory thresholds. For credit unions, it raises de minimis and asset-related thresholds, including $10 million to $34 million, $500 million to $2 billion, and related reporting or examination cutoffs. The House-reported version also adjusts repeated $50 billion Dodd-Frank references to $105 billion.

Beginning April 1, 2031, and every five years afterward, the Board of Governors of the Federal Reserve System must increase each covered dollar amount by the ratio of current-dollar U.S. GDP before the adjustment year to current-dollar GDP before April 1, 2026, if that ratio is greater than one. The bill specifies rounding rules by size band, from rounding amounts of $100 billion or more up to the nearest $50 billion down to amounts under $1 million rounded up to the nearest $100,000.

Who Benefits and How

Community banks benefit because higher CRA, interlocks, and bank-holding-company thresholds can reduce reporting, examination, governance, and compliance burdens. Mid-size bank holding companies benefit from higher Dodd-Frank and Volcker-related thresholds. Credit unions benefit from higher Federal Credit Union Act de minimis and asset thresholds. Smaller mortgage lenders and financial firms benefit where raised thresholds move them below covered regulatory cutoffs. Bank trade associations benefit from an automatic five-year GDP-indexing formula instead of repeated statutory threshold fights.

Who Bears the Burden and How

Federal Reserve staff must calculate and publish five-year threshold adjustments using Department of Commerce GDP data and statutory rounding rules. Bank regulators must update supervision, examination, reporting, and guidance systems as thresholds rise. Consumers and communities may bear risk if raised thresholds reduce CRA coverage, interlocks restrictions, compensation rules, or resolution-related oversight for growing institutions. Community reinvestment advocates may lose regulatory leverage over banks newly treated as smaller institutions. Department of Commerce data staff indirectly support the indexing formula through GDP publications.

Key Provisions

• Modifies Bank Holding Company Act thresholds from $1 million to $3 million and from $10 billion to $15 billion.
• Modifies the Community Reinvestment Act threshold from $250 million to $800 million.
• Modifies Depository Institution Management Interlocks Act thresholds to $600 million, $110 million, and $10 billion.
• Modifies Dodd-Frank thresholds, including selected $50 billion references to $105 billion in the reported version.
• Modifies Federal Credit Union Act thresholds, including $10 million to $34 million and $500 million to $2 billion.
• Requires Federal Reserve threshold adjustments every five years starting April 1, 2031.
• Provides current-dollar GDP indexing and statutory rounding rules for covered thresholds.