Promoting New Bank Formation Act of 2025

Senate Bill

S. 113

119th Congress

Promoting New Bank Formation Act of 2025

In Committee

Introduced:Jan 16, 2025

Primary Sponsor

Chuck Grassley

Senator

Republican

IA

Cosponsors

1

Quick Stats

Policy Area

Finance and Financial Sector

Summary

This bill reduces barriers for starting new banks by allowing new financial institutions three years to meet capital requirements and letting them request business plan deviations. Rural community banks get a lower 8 percent leverage ratio with phase-in. Federal savings associations can deal in agricultural loans.

Latest Action

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

SponsorChuck Grassley (R-IA)

Introduced1/16/2025

StatusRead twice and referred to the Committee on Banking, Housing, and Urban Affairs.

ChamberSenate

Data from Congress.gov

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Vote Prediction

Promoting New Bank Formation Act of 2025

This bill reduces barriers for starting new banks by allowing new financial institutions three years to meet capital requirements and letting them request business plan deviations. Rural community banks get a lower 8 percent leverage ratio with phase-in. Feder

Community Breakdown

Pass

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This bill reduces barriers for starting new banks by allowing new financial institutions three years to meet capital requirements and letting them request business plan deviations. Rural community banks get a lower 8 percent leverage ratio with phase-in. Federal savings associations can deal in agricultural loans.

Bill Number: 113
Sponsor: Chuck Grassley (R-IA)
Introduced: 1/16/2025
Status: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Policy Area: Finance and Financial Sector

Data from Congress.gov

AI-generated summary

Fact Sheet

Title: Promoting New Bank Formation Act of 2025
Bill Number: 113
Sponsor: Chuck Grassley (R-IA)
Status: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Introduced: 1/16/2025
Summary: This bill reduces barriers for starting new banks by allowing new financial institutions three years to meet capital requirements and letting them request business plan deviations. Rural community banks get a lower 8 percent leverage ratio with phase-in. Federal savings associations can deal in agri

Data from Congress.gov

AI Summary

Plain-English explanation of this bill

This bill reduces barriers for starting new banks by allowing new financial institutions three years to meet capital requirements and letting them request business plan deviations. Rural community banks get a lower 8 percent leverage ratio with phase-in. Federal savings associations can deal in agricultural loans.

Last updated: 1/5/2026

Official Summary

Congressional Research Service summary

Promoting New Bank Formation Act of 2025This bill eliminates and reduces certain requirements applicable to new financial institutions, certain rural community banks, and federal savings associations.Under the bill, federal banking agencies must issue rules allowing new financial institutions to meet capital requirements within three years. During this period, a financial institution may request to deviate from an approved business plan and the appropriate agency has 30 days to approve or deny the request.In addition, the community bank leverage ratio—a way of evaluating debt levels—is reduced for new rural community banks. Specifically, new rural community banks 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%. Finally, the bill removes certain restrictions to allow federal savings associations to invest in, sell, or otherwise deal in agricultural loans.

Key Points

Main provisions of the bill

Allows new banks three years to meet capital requirements
Permits new institutions to deviate from approved business plans
Reduces leverage ratio to 8 percent for new rural community banks
Allows federal savings associations to make agricultural loans
Aims to encourage formation of new community banks

How This Impacts Americans

Potential effects on citizens and communities

Starting a new community bank would become easier with more flexible capital requirements and business planning. Rural areas could see more new banks serving agricultural customers as restrictions are reduced.

Policy Areas

Primary Policy Area

Finance and Financial Sector

Scope & Jurisdiction

Jurisdiction Level

federal

Congressional Session

119th Congress

Citation Reference

113, 119th Congress (2025). "Promoting New Bank Formation Act of 2025". Source: Voter's Right Platform. https://votersright.org/bills/118-s-113

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