This bill eases requirements for new banks by giving them three years to meet capital requirements and allowing business plan deviations. Rural community banks get a reduced leverage ratio of 8 percent with a phase-in period. Federal savings associations gain authority to make agricultural loans.
Latest Action
Placed on the Union Calendar, Calendar No. 64.
AI Summary
Plain-English explanation of this bill
This bill eases requirements for new banks by giving them three years to meet capital requirements and allowing business plan deviations. Rural community banks get a reduced leverage ratio of 8 percent with a phase-in period. Federal savings associations gain authority to make agricultural loans.
Last updated: 1/6/2026
Official Summary
Congressional Research Service summary
<p><strong>Promoting New Bank Formation Act</strong></p><p>This bill eliminates and reduces certain requirements applicable to new depository institutions, certain rural community depository institutions, and federal savings associations.</p><p>Federal banking agencies must issue rules allowing a new depository institution or depository institution holding company three years to meet capital requirements. During this period, a depository institution or its depository institution holding company may request to deviate from an approved business plan, and the appropriate agency has 30 days to approve or deny the request.</p><p>In addition, the community bank leverage ratio—a way of evaluating debt levels—is reduced for new rural community depository institutions. Specifically, new rural community depository institutions must have a ratio of 8%, with a three-year phase-in of the rate. After this period, the ratio rises to its current level of 9%. </p><p>Finally, the bill removes certain restrictions to allow federal savings associations to invest in, sell, or otherwise deal in agricultural loans.</p>
Key Points
Main provisions of the bill
Gives new banks three years to meet capital requirements
Allows deviations from approved business plans during startup
Reduces leverage ratio to 8 percent for rural community banks
Three-year phase-in of leverage requirements
Allows federal savings associations to make agricultural loans
How This Impacts Americans
Potential effects on citizens and communities
Starting a new bank would become easier with more time to meet capital requirements. Rural communities could benefit from new local banks with relaxed initial requirements. Federal savings associations could expand into agricultural lending.
Policy Areas
Primary Policy Area
Finance and Financial Sector
Related Subjects
Administrative law and regulatory procedures
Agricultural prices, subsidies, credit
Bank accounts, deposits, capital
Banking and financial institutions regulation
Congressional oversight
Credit and credit markets
Financial services and investments
Government information and archives
Government studies and investigations
Rural conditions and development
Scope & Jurisdiction
Jurisdiction Level
federal
Congressional Session
119th Congress
Citation Reference
478, 119th Congress (2025). "Promoting New Bank Formation Act". Source: Voter's Right Platform. https://votersright.org/bills/118-hr-478
