Us Congress 2025-2026 Regular Session

Us Congress Senate Bill SB113 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	II
2	2	119THCONGRESS
3	3	1
4	4	STSESSION S. 113
5	5	To require the appropriate Federal banking agencies to establish a 3-year
6	6	phase-in period for de novo financial institutions to comply with Federal
7	7	capital standards, to provide relief for de novo rural community banks,
8	8	and for other purposes.
9	9	IN THE SENATE OF THE UNITED STATES
10	10	JANUARY16, 2025
11	11	Mrs. H
12	12	YDE-SMITHintroduced the following bill; which was read twice and
13	13	referred to the Committee on Banking, Housing, and Urban Affairs
14	14	A BILL
15	15	To require the appropriate Federal banking agencies to es-
16	16	tablish a 3-year phase-in period for de novo financial
17	17	institutions to comply with Federal capital standards,
18	18	to provide relief for de novo rural community banks,
19	19	and for other purposes.
20	20	Be it enacted by the Senate and House of Representa-1
21	21	tives of the United States of America in Congress assembled, 2
22	22	SECTION 1. SHORT TITLE. 3
23	23	This Act may be cited as the ‘‘Promoting New Bank 4
24	24	Formation Act of 2025’’. 5
25	25	SEC. 2. FINDINGS. 6
26	26	The Congress finds the following: 7
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30	30	(1) Trends in bank closures and consolidation 1
31	31	have left many communities without access to bank-2
32	32	ing services and disproportionately impact under-3
33	33	served rural and urban communities. 4
34	34	(2) De novo bank formation has slowed signifi-5
35	35	cantly following the financial crisis. 6
36	36	(3) A November 2019 report by the Federal 7
37	37	Reserve System found that 44 counties in the 8
38	38	United States were ‘‘deeply affected’’ by trends in 9
39	39	bank closures and consolidation, meaning that the 10
40	40	counties had fewer than 10 branches in 2012 and 11
41	41	lost not less than 50 percent of them by 2017. 12
42	42	(4) 89 percent of the deeply affected counties 13
43	43	described in paragraph (3) were rural. 14
44	44	(5) Rural counties deeply affected by branch 15
45	45	closures had higher poverty rates and lower median 16
46	46	incomes, and a higher share of their population were 17
47	47	African-American compared to all rural commu-18
48	48	nities. 19
49	49	SEC. 3. DEFINITIONS. 20
50	50	In this Act: 21
51	51	(1) A
52	52	PPROPRIATE FEDERAL BANKING AGENCY ; 22
53	53	DEPOSITORY INSTITUTION ; DEPOSITORY INSTITU -23
54	54	TION HOLDING COMPANY .—The terms ‘‘appropriate 24
55	55	Federal banking agency’’, ‘‘depository institution’’, 25
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58	58	•S 113 IS
59	59	and ‘‘depository institution holding company’’ have 1
60	60	the meanings given those terms in section 3 of the 2
61	61	Federal Deposit Insurance Act (12 U.S.C. 1813). 3
62	62	(2) C
63	63	OMMUNITY BANK LEVERAGE RATIO .—The 4
64	64	term ‘‘Community Bank Leverage Ratio’’ has the 5
65	65	meaning given that term under section 201(a) of the 6
66	66	Economic Growth, Regulatory Relief, and Consumer 7
67	67	Protection Act (12 U.S.C. 5371 note). 8
68	68	(3) F
69	69	INANCIAL INSTITUTION.—The term ‘‘fi-9
70	70	nancial institution’’ means a depository institution 10
71	71	or depository institution holding company. 11
72	72	(4) R
73	73	URAL COMMUNITY BANK .—The term 12
74	74	‘‘rural community bank’’ means a financial institu-13
75	75	tion— 14
76	76	(A) with total consolidated assets of less 15
77	77	than $10,000,000,000; and 16
78	78	(B) located in a rural area, as defined in 17
79	79	section 1026.35(b)(2)(iv)(A) of title 12, Code of 18
80	80	Federal Regulations, or any successor regula-19
81	81	tion. 20
82	82	SEC. 4. PHASE-IN OF CAPITAL STANDARDS. 21
83	83	The appropriate Federal banking agencies shall issue 22
84	84	rules that provide for a 3-year phase-in period for a finan-23
85	85	cial institution to meet any Federal capital requirements 24
86	86	that would otherwise be applicable to the financial institu-25
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90	90	tion, where the 3-year period begins on the date on which 1
91	91	the deposit insurance that the financial institution has ob-2
92	92	tained from the Federal Deposit Insurance Corporation 3
93	93	becomes effective. 4
94	94	SEC. 5. CHANGES TO BUSINESS PLANS. 5
95	95	(a) I
96	96	NGENERAL.—During the 3-year period begin-6
97	97	ning on the date on which the deposit insurance that the 7
98	98	financial institution has obtained from the Federal De-8
99	99	posit Insurance Corporation becomes effective, a financial 9
100	100	institution may request to deviate from a business plan 10
101	101	that has been approved by the appropriate Federal bank-11
102	102	ing agency by submitting a request to the agency pursuant 12
103	103	to this section. 13
104	104	(b) R
105	105	EVIEW OFCHANGES.—An appropriate Federal 14
106	106	banking agency shall, not later than the end of the 30- 15
107	107	day period beginning on the receipt of a request under 16
108	108	subsection (a)— 17
109	109	(1) approve, conditionally approve, or deny the 18
110	110	request; and 19
111	111	(2) notify the financial institution of the deci-20
112	112	sion and, if the agency denies the request— 21
113	113	(A) provide the financial institution with 22
114	114	the reason for the denial; and 23
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118	118	(B) suggest changes to the request that, if 1
119	119	adopted, would allow the agency to approve the 2
120	120	request. 3
121	121	(c) R
122	122	ESULT OFFAILURETOACT.—If an appropriate 4
123	123	Federal banking agency fails to approve or deny a request 5
124	124	within the 30-day period required under subsection (b), 6
125	125	the request shall be deemed to be approved. 7
126	126	SEC. 6. RURAL COMMUNITY BANK LEVERAGE RATIO. 8
127	127	(a) I
128	128	NGENERAL.—During the 3-year period begin-9
129	129	ning on the date on which the deposit insurance that a 10
130	130	rural community bank has obtained from the Federal De-11
131	131	posit Insurance Corporation becomes effective, the Com-12
132	132	munity Bank Leverage Ratio for the rural community 13
133	133	bank shall be 8 percent. 14
134	134	(b) P
135	135	HASE-INAUTHORITY.—The appropriate Fed-15
136	136	eral banking agencies shall issue rules to phase-in the 16
137	137	Community Bank Leverage Ratio described in subsection 17
138	138	(a) with respect to a rural community bank by setting 18
139	139	lower Community Bank Leverage Ratio percentages dur-19
140	140	ing the first 2 years of the 3-year period described in sub-20
141	141	section (a). 21
142	142	SEC. 7. AGRICULTURAL LOAN AUTHORITY FOR FEDERAL 22
143	143	SAVINGS ASSOCIATIONS. 23
144	144	Section 5(c) of the Home Owners’ Loan Act (12 24
145	145	U.S.C. 1464(c)) is amended— 25
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149	149	(1) in paragraph (1), by adding at the end the 1
150	150	following: 2
151	151	‘‘(V) A
152	152	GRICULTURAL LOANS .—Secured or 3
153	153	unsecured loans for agricultural purposes.’’; and 4
154	154	(2) in paragraph (2)(A), by striking ‘‘business, 5
155	155	or agricultural’’ and inserting ‘‘or business’’. 6
156	156	SEC. 8. STUDY ON DE NOVO FINANCIAL INSTITUTIONS. 7
157	157	(a) S
158	158	TUDY.—The appropriate Federal banking agen-8
159	159	cies shall, jointly, carry out a study on— 9
160	160	(1) the principal causes for the low number of 10
161	161	de novo financial institutions in the 10-year period 11
162	162	ending on the date of enactment of this Act; and 12
163	163	(2) ways to promote more de novo financial in-13
164	164	stitutions in areas currently underserved by financial 14
165	165	institutions. 15
166	166	(b) R
167	167	EPORT TOCONGRESS.—Not later than 1 year 16
168	168	after the date of enactment of this Act, the appropriate 17
169	169	Federal banking agencies shall, jointly, issue a report to 18
170	170	Congress containing all findings and determinations made 19
171	171	in carrying out the study required under subsection (a). 20
172	172	Æ
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