I
119THCONGRESS
1
STSESSION H. R. 478
To require the appropriate Federal banking agencies to establish a 3-year
phase-in period for de novo financial institutions to comply with Federal
capital standards, to provide relief for de novo rural community banks,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY16, 2025
Mr. B
ARRintroduced the following bill; which was referred to the Committee
on Financial Services
A BILL
To require the appropriate Federal banking agencies to es-
tablish a 3-year phase-in period for de novo financial
institutions to comply with Federal capital standards,
to provide relief for de novo rural community banks,
and for other purposes.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Promoting New Bank 4
Formation Act’’. 5
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SEC. 2. PHASE-IN OF CAPITAL STANDARDS. 1
The Federal banking agencies shall issue rules that 2
provide for a 3-year phase-in period for a depository insti-3
tution or depository institution holding company to meet 4
any Federal capital requirements that would otherwise be 5
applicable to the depository institution or depository insti-6
tution holding company, beginning on— 7
(1) the date on which the depository institution 8
became an insured depository institution; or 9
(2) in the case of a depository institution hold-10
ing company, the date on which the depository insti-11
tution subsidiary of the depository institution hold-12
ing company became an insured depository institu-13
tion. 14
SEC. 3. CHANGES TO BUSINESS PLANS. 15
(a) I
NGENERAL.—During the 3-year period begin-16
ning on the date on which a depository institution became 17
an insured depository institution, the insured depository 18
institution or its depository institution holding company 19
may request to deviate from a business plan that has been 20
approved by the appropriate Federal banking agency by 21
submitting a request to such agency pursuant to this sec-22
tion. 23
(b) R
EVIEW OFCHANGES.—An appropriate Federal 24
banking agency shall, not later than the end of the 30- 25
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•HR 478 IH
day period beginning on the receipt of a request under 1
subsection (a)— 2
(1) approve, conditionally approve, or deny such 3
request; and 4
(2) notify the applicant of such decision and, if 5
the agency denies the request— 6
(A) provide the applicant with the reason 7
for such denial; and 8
(B) suggest changes to the request that, if 9
adopted, would allow the agency to approve 10
such request. 11
(c) R
ESULT OFFAILURETOACT.—If an appropriate 12
Federal banking agency fails to approve or deny a request 13
within the 30-day period required under subsection (b), 14
such request shall be deemed to be approved. 15
SEC. 4. RURAL COMMUNITY DEPOSITORY INSTITUTION LE-16
VERAGE RATIO. 17
(a) I
NGENERAL.—During the 3-year period begin-18
ning on the date on which a rural depository institution 19
became an insured depository institution, the Community 20
Bank Leverage Ratio for the rural community bank shall 21
be 8 percent. 22
(b) P
HASE-INAUTHORITY.—The Federal banking 23
agencies shall issue rules to phase-in the Community Bank 24
Leverage Ratio described under subsection (a) with re-25
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spect to a rural depository institution by setting lower 1
Community Bank Leverage Ratio percentages during the 2
first 2 years of the 3-year period described under sub-3
section (a). 4
(c) D
EFINITIONS.—In this section: 5
(1) C
OMMUNITY BANK LEVERAGE RATIO .—The 6
term ‘‘Community Bank Leverage Ratio’’ has the 7
meaning given that term under section 201(a) of the 8
Economic Growth, Regulatory Relief, and Consumer 9
Protection Act (12 U.S.C. 5371 note). 10
(2) R
URAL DEPOSITORY INSTITUTION .—The 11
term ‘‘rural depository institution’’ means a deposi-12
tory institution— 13
(A) with total consolidated assets of less 14
than $10,000,000,000; and 15
(B) located in a rural area, as defined 16
under section 1026.35(b)(iv)(A) of title 12, 17
Code of Federal Regulations. 18
SEC. 5. AGRICULTURAL LOAN AUTHORITY FOR FEDERAL 19
SAVINGS ASSOCIATIONS. 20
Section 5(c) of the Home Owners’ Loan Act (12 21
U.S.C. 1464(c)) is amended— 22
(1) in paragraph (1), by adding at the end the 23
following: 24
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‘‘(V) AGRICULTURAL LOANS .—Secured or 1
unsecured loans for agricultural purposes.’’; and 2
(2) in paragraph (2)(A), by striking ‘‘business, 3
or agricultural’’ and inserting ‘‘or business’’. 4
SEC. 6. STUDY ON DE NOVO INSURED DEPOSITORY INSTI-5
TUTIONS. 6
(a) S
TUDY.—The Federal banking agencies shall, 7
jointly, carry out a study on— 8
(1) the principal causes for the low number of 9
de novo insured depository institutions in the 10- 10
year period ending on the date of enactment of this 11
Act; and 12
(2) ways to promote more de novo insured de-13
pository institutions in areas currently underserved 14
by insured depository institutions. 15
(b) R
EPORT TOCONGRESS.—Not later than the end 16
of the 1-year period beginning on the date of enactment 17
of this Act, the Federal banking agencies shall, jointly, 18
issue a report to Congress containing all findings and de-19
terminations made in carrying out the study required 20
under subsection (a). 21
SEC. 7. DEFINITIONS. 22
In this Act, the terms ‘‘appropriate Federal banking 23
agency’’, ‘‘depository institution’’, ‘‘depository institution 24
holding company’’, ‘‘Federal banking agency’’, and ‘‘in-25
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sured depository institution’’ have the meaning given those 1
terms, respectively, under section 3 of the Federal Deposit 2
Insurance Act. 3
Æ
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