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119-s-113119th CongressWALLET

Promoting New Bank Formation Act of 2025

Sponsored By: Senator Hyde-Smith, Cindy [R-MS]

Introduced

Summary

Eases capital and regulatory requirements to encourage new bank formation. This bill would make it easier for new and rural banks to start and expand, and would let federal savings associations do more agricultural lending.

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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 explicitly allowed to make secured or unsecured loans for agricultural purposes. The bill would add "agricultural loans" to the list of permitted loan types and would change the existing loan-purpose wording to broaden this authority. Farmers and rural borrowers could have more places to seek farm credit.

Easier startup rules for new banks

This bill would give newly insured banks three years to meet federal capital rules. The three-year clock would start when the bank's FDIC deposit insurance becomes effective. During that period, banks could ask to change their agency-approved business plans and agencies would have 30 days to approve, conditionally approve, or deny the request. Rural community banks (under $10 billion in assets and in a rural area) would use an 8% Community Bank Leverage Ratio during the three years, with agencies required to phase in lower percentages in years one and two. The bill also defines key terms used to implement these rules.

Sponsors & CoSponsors

Sponsor

Hyde-Smith, Cindy [R-MS]

MS • R

Cosponsors

  • Sen. Sheehy, Tim [R-MT]

    MT • R

    Sponsored 1/27/2025

Roll Call Votes

No roll call votes available for this bill.

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