2 versions

SubstantiveWhat changed in REPORTED IN HOUSEcompared with INTRODUCED IN HOUSE (May 7, 2025)

A substantive expansion of the bill's regulatory tailoring. v2 adds an amendment to Section 1026(a) of the Consumer Financial Protection Act of 2010, increasing the asset threshold for Bureau supervision for an additional category of financial institutions. A minor technical correction to a statutory reference in the Qualified Mortgage Requirements section was also made.

H.R. 3230119th CongressIntroduced May 7, 2025

Financial Institution Regulatory Tailoring Enhancement Act

Reported To HouseFinance and Financial SectorMajor

View bill text

Sponsor: Rep. Barr, Andy [R-KY-6]
Committees: Financial Services Committee (primary)
Last action: Jun 20, 2025

Bottom line

The bill aims to reduce regulatory burdens on mid-sized financial institutions by raising key asset thresholds, potentially impacting financial stability, consumer protection, and lending practices.

What it actually does

This bill significantly raises the asset thresholds at which financial institutions become subject to several key federal regulations, moving the benchmark from $10 billion to $50 billion. Specifically, it exempts banks with assets between $10 billion and $50 billion from direct supervision by the Consumer Financial Protection Bureau (CFPB), certain requirements of the Volcker Rule, specific Qualified Mortgage (QM) requirements, and certain leverage and risk-based capital requirements.

Proponents argue

Proponents argue that the current $10 billion threshold for these regulations is arbitrary and overly burdensome for regional and community banks, hindering their ability to lend and grow. They contend that raising the threshold to $50 billion will appropriately tailor regulations to the actual systemic risk posed by institutions, freeing up capital and resources for these banks to better serve their communities without compromising overall financial stability.

Opponents contend

Opponents argue that this deregulation increases systemic risk by allowing a significant segment of the banking industry to operate with less stringent oversight and capital requirements, potentially leading to future financial instability. They also express concerns that reduced CFPB supervision and relaxed QM rules could weaken consumer protections and increase the risk of predatory lending practices.

The bill is very short and straightforward, making it highly accessible for a reader to quickly understand its provisions and implications.

Section 2(a)(1) and (2)

Increase in CFPB Supervision Threshold

prominently featuredstraightforward

This provision amends the Consumer Financial Protection Act of 2010 to raise the asset threshold for certain financial institutions to be subject to direct supervision by the Bureau of Consumer Financial Protection (CFPB) from $10 billion to $50 billion. This means banks with assets between $10 billion and $50 billion would no longer be directly supervised by the CFPB for compliance with federal consumer financial laws.

GroupImpactMechanismScale

GroupFinancial institutions with assets between $10 billion and $50 billionImpactReduced direct regulatory oversight from the CFPB, potentially lowering compliance costs.MechanismStatutory amendment to 12 U.S.C. 5515(a) and 5516(a).ScaleAffects a significant number of regional banks.

GroupConsumersImpactPotential reduction in direct consumer protection oversight for financial products offered by these institutions.MechanismChange in supervisory authority.ScaleBroad, affecting customers of mid-sized banks.

Supporters argue

Supporters argue this change reduces compliance costs and regulatory burden for mid-sized banks, allowing them to focus more on serving their communities and lending without posing systemic risk.

Critics contend

Critics contend this increases consumer risk by removing direct CFPB oversight from a substantial segment of the banking industry, potentially leading to less rigorous consumer protection practices.

Tradeoffs

The provision balances the desire to reduce regulatory burden on mid-sized banks with the need to ensure robust consumer protection across the financial sector.

Section 2(b)

Increase in Volcker Rule Requirements Threshold

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This provision amends the Bank Holding Company Act of 1956 to raise the asset threshold for certain requirements under the Volcker Rule from $10 billion to $50 billion. This change would exempt banks with assets between these amounts from specific prohibitions on proprietary trading and investments in hedge funds or private equity funds, offering them greater flexibility in their investment activities.

Section 2(c)

Increase in Qualified Mortgage (QM) Requirements Threshold

prominently featuredmoderately complex

This provision amends the Truth in Lending Act to raise the asset threshold for certain Qualified Mortgage (QM) requirements from $10 billion to $50 billion. This adjustment would provide banks with assets in this range more flexibility in originating mortgages that are presumed to meet ability-to-repay standards, potentially expanding access to credit for consumers.

Section 2(d)

Increase in Leverage and Risk-based Capital Requirements Threshold

prominently featuredhighly complex

This provision amends the Economic Growth, Regulatory Relief, and Consumer Protection Act to raise the asset threshold for certain leverage and risk-based capital requirements from $10 billion to $50 billion. This means banks with assets in this range would be subject to less stringent capital requirements, potentially freeing up capital for lending, investment, or shareholder returns.

About this analysis. AI-Generated from the official bill text and available committee reports. Gaps in available data are noted explicitly. Verify important details with the official Congress.gov record.

SubstantiveWhat changed in REPORTED IN HOUSEcompared with INTRODUCED IN HOUSE (May 7, 2025)

See full diff

H.R. 3230119th CongressIntroduced May 7, 2025

Financial Institution Regulatory Tailoring Enhancement Act

Reported To HouseFinance and Financial SectorMajor

View bill text

Sponsor: Rep. Barr, Andy [R-KY-6]
Committees: Financial Services Committee (primary)
Last action: Jun 20, 2025

Bottom line

The bill aims to reduce regulatory burdens on mid-sized financial institutions by raising key asset thresholds, potentially impacting financial stability, consumer protection, and lending practices.

What it actually does

Proponents argue

Opponents contend

The bill is very short and straightforward, making it highly accessible for a reader to quickly understand its provisions and implications.

Section 2(a)(1) and (2)

Increase in CFPB Supervision Threshold

prominently featuredstraightforward

GroupImpactMechanismScale

Supporters argue

Supporters argue this change reduces compliance costs and regulatory burden for mid-sized banks, allowing them to focus more on serving their communities and lending without posing systemic risk.

Critics contend

Critics contend this increases consumer risk by removing direct CFPB oversight from a substantial segment of the banking industry, potentially leading to less rigorous consumer protection practices.

Tradeoffs

The provision balances the desire to reduce regulatory burden on mid-sized banks with the need to ensure robust consumer protection across the financial sector.

Section 2(b)

Increase in Volcker Rule Requirements Threshold

prominently featuredmoderately complex

Section 2(c)

Increase in Qualified Mortgage (QM) Requirements Threshold

prominently featuredmoderately complex

Section 2(d)

Increase in Leverage and Risk-based Capital Requirements Threshold

prominently featuredhighly complex