Community Bank LIFT Act
The Community Bank LIFT Act would expand and adjust the Community Bank Leverage Ratio (CBLR) regime established by the Economic Growth, Regulatory Relief, and Consumer Protection Act. Specifically, it raises the asset threshold for banks that can elect the CBLR from $10 billion to $15 billion, and lowers the required CBLR leverage ratio from a range of 8-10% to 6-8%. The bill also requires federal banking agencies to propose and finalize implementing rules within set timeframes. In addition, it directs a formal joint review of the CBLR to consider modifications that would make it easier for more community banks to opt in, with particular attention to smaller banks and streamlined compliance. Overall, the measure seeks to broaden eligibility and make the framework more flexible, while providing a structured timeline for rulemaking and evaluation.
Key Points
- 1Asset threshold for qualifying banks increases from $10 billion to $15 billion, expanding which banks may elect the CBLR framework.
- 2Minimum/maximum CBLR under the regime is lowered from 8-10% to 6-8%, reducing the capital burden for participating banks.
- 3Rulemaking deadline: federal banking agencies must propose rules within 180 days of enactment and finalize them within 1 year, implementing the amendments.
- 4Section 3 mandates a joint review by the Federal Reserve, the OCC, and the FDIC of the CBLR framework, focusing on making it easier for more banks to opt in, especially smaller ones.
- 5The review must address changes to the calculation (numerator/denominator), asset class treatment, qualifying criteria, streamlined opt-in/opt-out processes, transition grace periods, and any needed statutory changes.