07/15/26

Community bankers understand that regulatory burden is not measured only in dollars. It is measured in the hours senior officers spend responding to exam requests, the employees assigned to prepare duplicative reports, the capital held against rules designed for more complex institutions and the opportunities a bank must decline because compliance resources are already stretched thin. While federal regulators have made positive changes during the current administration to improve the way community banks are examined, the Main Street Capital Access Act would codify those reforms in law so they remain durable through future changes in political leadership.

The Main Street Capital Access Act, H.R. 6955, would address those challenges through more than two dozen reforms to federal banking regulation, supervision, capital requirements, deposit funding and merger review. For community banks, this legislation would deliver concrete changes to how they are regulated and examined—not simply direct regulators to conduct another study.

The House Financial Services Committee approved the legislation on March 4 by a vote of 26–16. The Ohio Bankers League is asking Ohio bankers to send a grassroots email urging their members of Congress to support the bill and move it through the full House.

More focused and efficient examinations

For well-managed and well-capitalized banks with $6 billion or less in assets, the bill would require regulators to alternate between full-scope and limited-scope examinations. After a bank completes a full-scope, on-site examination, its next regularly scheduled examination would be limited in scope, unless the bank is subject to a formal enforcement action or has experienced a change in control.

The bill would also allow an eligible community bank to request that regulators conduct two or three of its safety-and-soundness, consumer compliance, information technology and cybersecurity examinations at the same time. Instead of preparing for separate examinations throughout the year, a bank could consolidate the process and reduce repeated requests for management time, documents and staff assistance.

For every bank below $6 billion, federal regulators would be required, to the maximum extent practicable, to:

• Assign an experienced examiner to lead the examination.
• Minimize the number of examiners involved.
• Minimize the amount of time examiners spend at the bank.
• Schedule the examination at a time that is reasonably convenient for the institution.
• Provide advance notice of the issues expected to be covered.

Regulators would have to report annually to Congress on their compliance, including the average experience of lead examiners, the number of examiners assigned and the amount of time spent on-site at community banks.

The legislation would also increase the asset threshold for qualifying for an 18-month examination cycle from $3 billion to $6 billion. Banks already below $3 billion may qualify for the longer cycle today, but this change would allow them to grow beyond the current threshold without immediately becoming subject to more frequent examinations.

A meaningful right to appeal examination decisions

The Main Street Capital Access Act would establish an Office of Independent Examination Review within the Federal Financial Institutions Examination Council. A bank would have the right to seek an independent review of a material supervisory determination contained in a final examination report rather than relying solely on an appeal process housed within the same regulatory agency that issued the finding.

A bank generally would have 60 days after receiving its final examination report to request review. It could also request the factual and examination information the regulator relied upon in making the determination, and the agency would be required to provide that information within 14 days of the request. The independent review board could uphold, cancel or modify the examiner’s determination, and the bank could elect to receive a hearing.

The bill would separately require the FFIEC to develop recommendations for making CAMELS ratings more consistent and transparent. Those recommendations would include objective and quantifiable criteria for each CAMELS component, a weighting methodology that better reflects actual risk and consideration of whether the Management component should be narrowed or eliminated.

For a community bank, these provisions would create a more credible process for challenging an examination conclusion that could otherwise affect its rating, capital planning, growth strategy, dividends, acquisitions or ability to offer new products.

Simpler capital and reporting requirements

The legislation would make significant changes to the Community Bank Leverage Ratio, or CBLR. It would lower the statutory range within which regulators establish the CBLR from the current 8%–10% range to a 6%–8% range. It would not automatically establish a 6% ratio for every bank; the banking agencies would still be required to finalize implementing regulations within that range.

The agencies would also have to conduct a comprehensive review of the CBLR framework, with a specific focus on smaller community banks and making the framework easier to use. The review would examine:

• How the ratio’s numerator and denominator are calculated.
• Whether particular assets and exposures should receive different treatment.
• The criteria for qualifying to use the CBLR.
• The process for opting into or out of the framework.
• Reporting and transition requirements.
• The grace period available when a bank no longer meets the requirements.

The intent is to make the CBLR a genuinely simpler alternative to complex risk-based capital calculations while maintaining appropriate safety-and-soundness standards.

Banks eligible for the CBLR would also receive reduced Call Report requirements for the first and third quarters of each year. That would give qualifying community banks a short-form reporting process twice annually instead of requiring the full reporting burden every quarter.

The bill would raise the eligibility threshold for the Federal Reserve’s Small Bank Holding Company Policy Statement from $3 billion to $25 billion. Banks below $3 billion generally already receive the policy statement’s benefits, but raising the threshold would eliminate a major regulatory cliff as they grow. A community bank would not have to choose between remaining below $3 billion and losing access to the holding-company financing flexibility that can support acquisitions, stock redemptions and ownership transitions.

Rules tailored to community-bank risk

The bill would require the FDIC, Federal Reserve, OCC and CFPB to consider an institution’s business model and risk profile whenever they issue a new regulation. Agencies would have to tailor regulatory requirements to limit unnecessary costs, staffing demands and other burdens and explain publicly how they applied those principles in each proposed and final rule. Importantly, the requirement would not apply only to future regulations. Agencies would have to review final regulations issued under laws enacted during the preceding 15 years and revise those rules, where necessary, to comply with the new tailoring standards. The legislation would also require banking agencies to review the cumulative burden of their regulations every seven years instead of every 10 years. This recognizes that a rule that appears manageable on its own can become disproportionately burdensome when layered on top of dozens of other requirements.

An end to supervision based on “reputational risk”

The Main Street Capital Access Act would prohibit federal regulators from using undefined “reputational risk” as a basis for regulating, examining or taking enforcement action against a bank. Regulators would have to remove references to reputational risk from their rules, guidance, examination manuals and supervisory materials. They could not issue an examination finding, adjust a supervisory rating or initiate an enforcement action based on concerns that a lawful customer or business relationship might generate negative publicity. Regulators would remain able to supervise actual legal, compliance, credit, liquidity, operational and safety-and-soundness risks. The bill would also require agency guidance to state clearly that it does not have the force of law and is intended only to explain existing legal requirements or agency policies. That would help prevent informal guidance and examiner preferences from being treated as binding regulation.

Greater certainty for community-bank mergers

For community banks considering a merger or acquisition, the legislation would establish firm regulatory timelines. Agencies generally would have 30 days to tell applicants whether the application is complete and identify any additional information required. They would then have to approve or deny the application within 90 days of its initial submission, with one additional 30-day extension available at the applicant’s request. If the agency failed to act within the statutory period, the application would be deemed approved.

For transactions resulting in an institution with less than $10 billion in assets, the bill would also allow regulators to forgo a competitive-factors report from the Department of Justice and would remove the federal competitive-factor analysis from the bank-merger approval process. Safety and soundness, financial and managerial resources, community needs and other applicable statutory considerations would remain part of the review.

These provisions would not guarantee approval of every community-bank transaction. They would, however, give banks clearer timelines and prevent viable transactions from remaining in regulatory limbo indefinitely.

Community bankers need to be heard

The Main Street Capital Access Act recognizes that a locally focused community bank with a traditional business model should not be regulated as though it presents the same risks as a complex, systemically important institution.

For banks below $3 billion, the bill would mean fewer duplicative examinations, reduced Call Reports, a more workable capital framework, greater access to nonbrokered deposits, an independent examination appeal process, stronger regulatory tailoring and room to grow without immediately crossing outdated regulatory thresholds.

These are practical reforms that would allow community bankers to spend less time managing unnecessary regulatory processes and more time making loans, serving customers, and investing in their communities.

Take Action Now! Please take a few minutes today to send a grassroots email urging your members of Congress to support and pass the Main Street Capital Access Act. Congress needs to hear directly from the bankers who understand what these changes would mean for Main Street communities across Ohio.