S. 427 — TAILOR Act of 2025

This section requires each Federal financial institutions regulatory agency—i.e., the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, and Bureau of Consumer Financial Protection—for any regulatory action (i.e., proposed, interim, or final rule or regulation, excluding actions solely applicable to an individual institution) after enactment to (1) consider the risk profile and business models of affected institutions or classes of institutions and (2) tailor the action to limit regulatory burdens (including costs and human resource allocation) appropriate to those factors. In doing so, agencies must consider (1) the aggregate impact of all regulations on institutions' ability to serve customers and local markets, (2) potential effects of implementation efforts or third-party actions that could undercut tailoring, and (3) the statutory basis, congressional intent, and policy objectives of the action. The section further requires agencies to disclose application of these requirements in every notice of proposed rulemaking and final rule; submit annual reports to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services, beginning one year after enactment, detailing tailoring actions taken; and review all final regulations issued from seven years before Senate introduction of this Act through enactment, apply these requirements, and revise as needed within three years.

This section directs the appropriate Federal banking agencies to promulgate regulations establishing reduced reporting requirements (short-form call reports) for all banks eligible for the community bank leverage ratio—i.e., a simplified capital framework available to qualifying banks with assets under $10 billion—when filing the first and third quarterly reports of condition required under the Federal Deposit Insurance Act. (Thus, these banks would file full call reports only for the second and fourth quarters.)

This section directs the appropriate Federal banking agencies, in consultation with State bank supervisors, to submit to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services, not later than 18 months after the date of enactment, a report on the modernization of bank supervision that addresses (1) changing bank business models, (2) examiner workforce and training, (3) the structure of supervisory activities within banking agencies, (4) improving bank-supervisor communication and collaboration, (5) the use of supervisory technology, (6) supervisory factors uniquely applicable to community banks, and (7) changes in statutes necessary to achieve more effective supervision.