What This Bill Does
This bill requires federal banking agencies to create a 3-year grace period for new banks to meet capital requirements (the amount of money banks must keep on hand). It also provides special relief for new rural banks and changes the rules for federal savings associations to make agricultural loans.
Who It Affects
New banks that just became insured depository institutions (banks protected by federal insurance), rural community banks with less than $10 billion in total assets, federal savings associations (a type of savings bank), and the federal banking agencies that oversee banks.
Key Provisions
• Federal banking agencies must create rules allowing new banks and bank holding companies a 3-year period to meet federal capital requirements, starting from when the bank became federally insured (Sec. 2)
• During the first 3 years, new banks can request approval to change their approved business plan, and the federal agency must decide within 30 days or the request is automatically approved (Sec. 3)
• For new rural banks, the Community Bank Leverage Ratio (a measure of how much money a bank must hold) will be set at 8 percent during the 3-year period, with lower percentages allowed in the first 2 years (Sec. 4)
• Federal savings associations can now make secured or unsecured agricultural loans (loans that may or may not require collateral, or something of value as a guarantee) (Sec. 5)
• Federal banking agencies must jointly study why so few new banks have been created in the past 10 years and report findings to Congress within 1 year (Sec. 6)
What Changes
New banks will have 3 years instead of immediately having to meet the same strict capital requirements as established banks. New rural banks get even more flexibility with lower leverage ratio requirements. Federal savings associations gain the ability to make agricultural loans. Federal banking agencies must complete a study on why new bank creation is low.
Important Definitions
The bill references definitions from the Federal Deposit Insurance Act for "appropriate Federal banking agency," "depository institution," "depository institution holding company," "Federal banking agency," and "insured depository institution." The bill defines "rural depository institution" as a bank with less than $10 billion in total assets located in a rural area. The bill also references the "Community Bank Leverage Ratio" as defined in another federal law.
Effective Date
Not specified in bill text
IB
Union Calendar No. 649
118TH CONGRESS
2D SESSION
H. R. 758
[Report No. 118–786]
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
FEBRUARY 2, 2023
Mr. BARR introduced the following bill; which was referred to the Committee
on Financial Services
DECEMBER 3, 2024
Additional sponsors: Mr. SESSIONS, Mr. LOUDERMILK, Mr. DONALDS, Mr.
LUETKEMEYER, Mrs. KIM
of California, Mr. FITZPATRICK, Mr.
KUSTOFF, Mr. GUEST, Mr. TIMMONS, Mr. VALADAO, Mr. ROSE, Mr.
WILLIAMS of Texas, Mr. RESCHENTHALER, Mr. EZELL, Mr. POSEY, Ms.
DE LA CRUZ, and Mrs. HOUCHIN
DECEMBER 3, 2024
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on February 2, 2023]
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•HR 758 RH
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.
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•HR 758 RH
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 Access to
4
Capital in Underbanked Communities Act of 2023’’.
5
SEC. 2. PHASE-IN OF CAPITAL STANDARDS.
6
The Federal banking agencies shall issue rules that
7
provide for a 3-year phase-in period for a depository insti-
8
tution or depository institution holding company to meet
9
any Federal capital requirements that would otherwise be
10
applicable to the depository institution or depository insti-
11
tution holding company, beginning on—
12
(1) the date on which the depository institution
13
became an insured depository institution; or
14
(2) in the case of a depository institution hold-
15
ing company, the date on which the depository insti-
16
tution subsidiary of the depository institution holding
17
company became an insured depository institution.
18
SEC. 3. CHANGES TO BUSINESS PLANS.
19
(a) IN GENERAL.—During the 3-year period beginning
20
on the date on which a depository institution became an
21
insured depository institution, the insured depository insti-
22
tution or its depository institution holding company may
23
request to deviate from a business plan that has been ap-
24
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•HR 758 RH
proved by the appropriate Federal banking agency by sub-
1
mitting a request to such agency pursuant to this section.
2
(b) REVIEW OF CHANGES.—An appropriate Federal
3
banking agency shall, not later than the end of the 30-day
4
period beginning on the receipt of a request under sub-
5
section (a)—
6
(1) approve, conditionally approve, or deny such
7
request; and
8
(2) notify the applicant of such decision and, if
9
the agency denies the request—
10
(A) provide the applicant with the reason
11
for such denial; and
12
(B) suggest changes to the request that, if
13
adopted, would allow the agency to approve such
14
request.
15
(c) RESULT OF FAILURE TO ACT.—If an appropriate
16
Federal banking agency fails to approve or deny a request
17
within the 30-day period required under subsection (b),
18
such request shall be deemed to be approved.
19
SEC. 4. RURAL COMMUNITY DEPOSITORY INSTITUTION LE-
20
VERAGE RATIO.
21
(a) IN GENERAL.—During the 3-year period beginning
22
on the date on which a rural depository institution became
23
an insured depository institution, the Community Bank
24
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•HR 758 RH
Leverage Ratio for the rural community bank shall be 8
1
percent.
2
(b) PHASE-IN
AUTHORITY.—The Federal banking
3
agencies shall issue rules to phase-in the Community Bank
4
Leverage Ratio described under subsection (a) with respect
5
to a rural depository institution by setting lower Commu-
6
nity Bank Leverage Ratio percentages during the first 2
7
years of the 3-year period described under subsection (a).
8
(c) DEFINITIONS.—In this section:
9
(1) COMMUNITY
BANK
LEVERAGE
RATIO.—The
10
term ‘‘Community Bank Leverage Ratio’’ has the
11
meaning given that term under section 201(a) of the
12
Economic Growth, Regulatory Relief, and Consumer
13
Protection Act (12 U.S.C. 5371 note).
14
(2) RURAL DEPOSITORY INSTITUTION.—The term
15
‘‘rural depository institution’’ means a depository in-
16
stitution—
17
(A) with total consolidated assets of less
18
than $10,000,000,000; and
19
(B) located in a rural area, as defined
20
under section 1026.35(b)(iv)(A) of title 12, Code
21
of Federal Regulations.
22
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•HR 758 RH
SEC. 5. AGRICULTURAL LOAN AUTHORITY FOR FEDERAL
1
SAVINGS ASSOCIATIONS.
2
Section 5(c) of the Home Owners’ Loan Act (12 U.S.C.
3
1464(c)) is amended—
4
(1) in paragraph (1), by adding at the end the
5
following:
6
‘‘(V) AGRICULTURAL
LOANS.—Secured or
7
unsecured loans for agricultural purposes.’’; and
8
(2) in paragraph (2)(A), by striking ‘‘business,
9
or agricultural’’ and inserting ‘‘or business’’.
10
SEC. 6. STUDY ON DE NOVO INSURED DEPOSITORY INSTI-
11
TUTIONS.
12
(a) STUDY.—The Federal banking agencies shall,
13
jointly, carry out a study on—
14
(1) the principal causes for the low number of de
15
novo insured depository institutions in the 10-year
16
period ending on the date of enactment of this Act;
17
and
18
(2) ways to promote more de novo insured depos-
19
itory institutions in areas currently underserved by
20
insured depository institutions.
21
(b) REPORT TO CONGRESS.—Not later than the end
22
of the 1-year period beginning on the date of enactment of
23
this Act, the Federal banking agencies shall, jointly, issue
24
a report to Congress containing all findings and determina-
25
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•HR 758 RH
tions made in carrying out the study required under sub-
1
section (a).
2
SEC. 7. DEFINITIONS.
3
In this Act, the terms ‘‘appropriate Federal banking
4
agency’’, ‘‘depository institution’’, ‘‘depository institution
5
holding company’’, ‘‘Federal banking agency’’, and ‘‘in-
6
sured depository institution’’ have the meaning given those
7
terms, respectively, under section 3 of the Federal Deposit
8
Insurance Act.
9
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Union Calendar No. 649
118TH CONGRESS
2D SESSION
H. R. 758
[Report No. 118–786]
A BILL
To require the appropriate Federal banking agen-
cies 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.
DECEMBER 3, 2024
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union,
and ordered to be printed
VerDate Sep 11 2014
01:00 Dec 04, 2024
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PO 00000
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