To require the appropriate Federal banking agencies to establish a 3-year phase-in period for de novo financial institutions to comply with Federal capital standards, to provide relief for de novo rural community banks, and for other purposes.
Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.
Summary
The Promoting New Bank Formation Act of 2025 addresses the decline in new bank creation, especially in underserved rural communities. It requires federal banking regulators to give newly chartered banks a 3-year phase-in period to meet capital requirements and allows them to request business plan changes during that period (with auto-approval if the regulator does not respond within 30 days). Rural community banks under billion in assets would receive a reduced 8% Community Bank Leverage Ratio during their first 3 years. The bill also allows federal savings associations to make agricultural loans for the first time and mandates a joint study on causes of low new bank formation and ways to promote it in underserved areas.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers.
At a Glance
What This Bill Does
Promotes the formation of new (de novo) banks by easing capital requirements during their first three years, providing regulatory flexibility for business plan changes, reducing the capital leverage ratio for rural community banks, expanding agricultural lending authority for federal savings associations, and requiring a study on barriers to new bank formation.
Who Benefits
- De novo bank applicants and organizers
- Rural community banks
- Underserved rural and urban communities
Who Bears Costs
- Federal banking regulators (OCC, FDIC, Federal Reserve)
- FDIC deposit insurance fund (marginally higher risk from lower capital requirements)
Key Policy Areas
{'domain': 'Finance', 'evidence': ['Sec. 4 provides 3-year phase-in of capital standards for de novo banks', 'Sec. 6 sets Community Bank Leverage Ratio at 8% for rural community banks', 'Sec. 5 allows business plan deviations with 30-day agency review']}, {'domain': 'Agriculture', 'evidence': ['Sec. 7 authorizes federal savings associations to make agricultural loans by amending Home Owners Loan Act']}
Primary Purpose
Promotes the formation of new (de novo) banks by easing capital requirements during their first three years, providing regulatory flexibility for business plan changes, reducing the capital leverage ratio for rural community banks, expanding agricultural lending authority for federal savings associations, and requiring a study on barriers to new bank formation.
Policy Domains
Legislative Strategy
"Reduces regulatory burden on new bank entry specifically targeting rural and underserved communities affected by bank consolidation, combining immediate regulatory relief with long-term study mandate."
Legislative Progress
IntroducedMrs. Hyde-Smith introduced the following bill; which was read twice …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
De novo financial institutions, De novo rural community banks under B in assets, Financial institutions under billion in rural areas
Federal banking regulators, Federal banking regulators (OCC, FDIC, Federal Reserve)
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "appropriate_federal_banking_agencies"
- → OCC, FDIC, Federal Reserve
- "appropriate_federal_banking_agencies"
- → OCC, FDIC, Federal Reserve
- "appropriate_federal_banking_agencies"
- → OCC, FDIC, Federal Reserve
Key Definitions
Terms defined in this bill
As defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
As defined under section 201(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act.
A depository institution or depository institution holding company.
A financial institution with total consolidated assets less than billion, located in a rural area as defined in 12 CFR 1026.35(b)(2)(iv)(A).
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology