Promoting New Bank Formation Act
Sponsored By: Representative Barr
In Committee
Summary
Phase in federal capital rules to make starting and growing banks easier, with targeted relief for rural new banks. This bill would give new banks time to meet capital standards, speed regulator review of business-plan changes, add powers for Federal Savings Associations, and require a study on low new-bank formation.
Show full summary
- New and forming banks: Would provide a mandatory three-year phase-in for federal capital standards starting when an institution becomes an insured depository institution. During that window regulators must review requests to change approved business plans within 30 days and a lack of agency action is deemed approval.
- Rural community banks: Would establish a Rural Community Depository Institution leverage ratio by fixing the Community Bank Leverage Ratio at 8 percent for eligible rural institutions during the three-year period and allow lower phase-in percentages in years one and two. Eligible institutions are those with under $10 billion in total consolidated assets and located in a rural area as defined in 12 CFR 1026.35(b)(iv)(A).
- Federal Savings Associations and underserved areas: Would add agricultural loans to the types of loans Federal Savings Associations may hold. The bill would also require a joint study by the Federal banking agencies on causes of the low number of de novo insured depository institutions over the prior ten-year period and deliver recommendations to Congress within one year.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 2 benefits, 0 costs, 0 mixed.
More farm loans from Federal Savings Associations
If enacted, Federal Savings Associations would be allowed to make loans for farm purposes. This could help farmers and small agricultural businesses that use these banks get credit. The change would take effect when the bill becomes law.
New banks get phased-in capital and faster approvals
If enacted, federal banking agencies would give new insured banks and their holding companies three years to meet capital rules. Newly insured rural banks with under $10 billion in assets could use an 8% leverage ratio for three years, and regulators could allow lower ratios in years one and two. The three-year clock would start when the bank becomes insured, or for a holding company when its bank subsidiary is insured. During those three years, a new bank or its holding company could ask to change its approved business plan. The agency would have 30 days to decide, or the change would be approved, and any denial would include reasons and suggested fixes.
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Sponsors & CoSponsors
Sponsor
Barr
KY • R
Cosponsors
Rep. Meuser, Daniel [R-PA-9]
PA • R
Sponsored 1/21/2025
Rep. Downing, Troy [R-MT-2]
MT • R
Sponsored 1/22/2025
Loudermilk
GA • R
Sponsored 1/22/2025
Rep. De La Cruz, Monica [R-TX-15]
TX • R
Sponsored 1/22/2025
Rep. Cline, Ben [R-VA-6]
VA • R
Sponsored 1/22/2025
Ellzey
TX • R
Sponsored 1/22/2025
Franklin, Scott
FL • R
Sponsored 1/23/2025
Huizenga
MI • R
Sponsored 1/23/2025
Knott
NC • R
Sponsored 1/23/2025
Timmons
SC • R
Sponsored 1/23/2025
Rep. Dunn, Neal P. [R-FL-2]
FL • R
Sponsored 2/4/2025
Rep. Williams, Roger [R-TX-25]
TX • R
Sponsored 2/4/2025
Rep. Flood, Mike [R-NE-1]
NE • R
Sponsored 2/4/2025
Rep. Palmer, Gary J. [R-AL-6]
AL • R
Sponsored 2/4/2025
Donalds
FL • R
Sponsored 2/4/2025
Rose
TN • R
Sponsored 2/5/2025
McDowell
NC • R
Sponsored 2/5/2025
Rep. Alford, Mark [R-MO-4]
MO • R
Sponsored 2/5/2025
Schmidt
KS • R
Sponsored 2/10/2025
Fitzgerald
WI • R
Sponsored 2/10/2025
Rep. Shreve, Jefferson [R-IN-6]
IN • R
Sponsored 2/24/2025
Moore (NC)
NC • R
Sponsored 2/24/2025
Rep. Lawler, Michael [R-NY-17]
NY • R
Sponsored 3/31/2025
Sessions
TX • R
Sponsored 4/1/2025
Roll Call Votes
No roll call votes available for this bill.
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