H.R. 5276: Community Bank LIFT Act

This bill relaxes requirements related to the community bank leverage ratio, which is a simplified capital standard applicable to qualified community banks. Community banks qualify by having less than $10 billion in assets, along with meeting other criteria.

Specifically, the bill increases this asset limit to $15 billion. Additionally, it reduces the statutory range of the leverage ratio from 8%-10% to 6%-8%. (The specific rate is set by regulation. A reduction in the leverage ratio eases capital requirements.)

The Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation must review and report on the leverage ratio and the rules issued to carry out its implementation. The report must include a consideration of how to modify the leverage ratio to encourage more participation in the community bank leverage ratio framework, with a focus on community banks with fewer assets and providing relief from regulatory compliance burdens.

Written by the Congressional Research Service, Library of Congress.