Technical corrections only. The v2 version of H.R. 2835 includes procedural updates such as additional sponsors and committee report information. There are no substantive changes to the legislative text or policy provisions between v1 and v2.
Small Bank Holding Company Relief Act
- Sponsor
- Rep. Donalds, Byron [R-FL-19]
- Committees
- Financial Services Committee (primary)
- Last action
- Jul 15, 2025
Bottom line
The bill significantly expands the definition of a 'small' bank holding company, reducing regulatory burden for a larger segment of the financial industry by raising the asset threshold to $25 billion.
What it actually does
This bill directs the Board of Governors of the Federal Reserve System to revise its 'Small Bank Holding Company and Savings and Loan Holding Company Policy Statement' within 180 days of enactment. The revision will raise the consolidated asset threshold under this policy statement to $25,000,000,000 for any bank holding company or savings and loan holding company. This change would exempt a larger number of financial institutions from certain regulatory requirements typically applied to larger, more complex entities.
Proponents argue
Proponents argue that raising the asset threshold for the small bank holding company policy statement will reduce unnecessary regulatory burdens on a broader range of financial institutions, allowing them to allocate more capital to lending and economic development rather than compliance costs. They contend this will foster competition, support community banking, and stimulate economic growth without compromising financial stability, as these institutions are still subject to other forms of oversight.
Opponents contend
Opponents might argue that significantly raising the asset threshold to $25 billion for 'small' bank holding companies could increase systemic risk by subjecting a larger pool of institutions to less stringent oversight. They may contend that institutions with $25 billion in assets are not truly 'small' and should be subject to more robust regulatory scrutiny to prevent potential financial instability, especially given past financial crises linked to insufficient oversight.
The bill text is exceptionally short and clear, making it very accessible for any reader to understand its core purpose quickly.
Section 2
Changes Required to the Small Bank Holding Company and Savings and Loan Holding Company Policy Statement
This section mandates that the Federal Reserve Board update its policy statement concerning small bank holding companies and savings and loan holding companies. Specifically, it requires the Board to increase the consolidated asset threshold from its current level (which is not specified in the bill but is understood to be lower) to $25 billion. This means that any bank or savings and loan holding company with consolidated assets up to $25 billion will now qualify for the less stringent regulatory framework designed for 'small' institutions, such as exemptions from certain capital and debt requirements.
Supporters argue
Supporters argue that this threshold increase is a common-sense measure to right-size regulation, allowing a greater number of institutions to operate efficiently without being bogged down by rules designed for much larger, more complex banks. They believe it will free up capital for investment and lending in local communities, promoting economic growth.
Critics contend
Critics contend that a $25 billion asset threshold is too high for an institution to be considered 'small' and subject to reduced regulatory scrutiny. They argue that such a change could create a regulatory blind spot, potentially allowing institutions that are significant in size and interconnectedness to take on greater risks, thereby increasing the vulnerability of the financial system to future crises.
Tradeoffs
The provision balances the desire to reduce regulatory compliance costs for financial institutions, which can foster economic growth and competition, against the need to maintain robust oversight to ensure financial stability and protect against systemic risks. It also involves defining what constitutes a 'small' institution in an evolving financial landscape.