H.R. 5276 — Community Bank LIFT Act

This section revises the community bank leverage ratio (CBLR)—which allows qualifying insured depository institutions and their holding companies to satisfy applicable capital and leverage requirements using a simple tangible equity to average total assets ratio in lieu of risk-based capital requirements—by (1) increasing the qualifying asset threshold to $15 billion (from $10 billion); and (2) lowering the required leverage ratio range to not less than 6% and not more than 8% (from not less than 8% and not more than 10%). It further directs the Board of Governors of the Federal Reserve System, Comptroller of the Currency, and Federal Deposit Insurance Corporation to propose rules implementing these changes within 180 days of enactment—after reviewing a specified report—and to finalize such rules within one year of enactment.

This section directs the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (agencies) to review the Community Bank Leverage Ratio (CBLR)—a simplified alternative capital framework established under section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act for qualifying community banks (generally, insured depository institutions with total consolidated assets of less than $10 billion)—to consider modifications that encourage more such banks, especially those with fewer assets, to opt in and reduce compliance burdens by simplifying its application. Not later than 150 days after enactment, the agencies must report to the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs their findings and recommendations on (1) CBLR numerator and denominator calculations; (2) treatments of specific asset classes or exposures to reflect community banks' risk profiles; (3) qualifying community bank definition and criteria; (4) opt-in and opt-out procedures, including streamlined reporting and transitions; (5) grace periods for transitions; and (6) any required statutory changes.