A recently unveiled bill is intended to make it easier for community banks to raise capital by increasing the required asset threshold to qualify as a small bank holding company to $10 billion from $3 billion.
The bill, introduced late last month by Rep. Alex Mooney (R-W.V.), would allow more banks to operate at higher debt levels, potentially allowing them to raise capital at a cheaper price. The legislation does not change capital rules and regulations for subsidiary banks.
“This legislation provides sensible regulatory relief to rural financial institutions, while also preserving safety and soundness measures,” Mooney said. “On average, the United States loses more than one community bank every day because of burdensome federal regulation.”
The bill, supported by the American Bankers Association and Independent Community Bankers of America, is cosponsored by five House Republicans: Andy Barr of Kentucky; Byron Donalds of Florida; Monica De La Cruz of Texas; Andy Ogles of Tennessee; and Zach Nunn of Iowa.
ABA President and CEO Rob Nichols said the bill “will allow community banks to better meet the needs of their customers, clients and communities, while preserving their commitment to safety and soundness.”
ICBA President and CEO Rebeca Romero Rainey said the proposal “will make it easier for small bank and thrift holding companies to raise additional capital, promoting lending and economic growth in local communities while preserving safety and soundness.”