A minor but significant modification. Section 2(b) was amended to explicitly require regulatory agencies to finalize rules not only for the statutory changes to the Community Bank Leverage Ratio but also for any recommended modifications resulting from the mandated review. This ensures a more comprehensive regulatory update.
Community Bank LIFT Act
- Sponsor
- Rep. Kim, Young [R-CA-40]
- Committees
- Financial Services Committee (primary)
- Last action
- Nov 4, 2025
Bottom line
The bill aims to provide regulatory relief and flexibility for a broader range of community banks by adjusting capital requirements and streamlining compliance.
What it actually does
This bill amends the Economic Growth, Regulatory Relief, and Consumer Protection Act to increase the asset threshold for community banks eligible to use the Community Bank Leverage Ratio (CBLR) from $10 billion to $15 billion. It also lowers the required leverage ratio range for these banks from 8-10 percent to 6-8 percent. Additionally, the bill mandates a review of the CBLR by federal banking agencies to identify ways to encourage more community banks, especially smaller ones, to opt into the framework and reduce compliance burdens, followed by a rulemaking process.
Proponents argue
Supporters argue that increasing the asset threshold and lowering the leverage ratio will reduce regulatory burden for more community banks, allowing them to focus resources on serving their communities rather than on complex compliance. They contend that the current framework is overly burdensome for smaller institutions and that these adjustments will encourage greater participation in the simplified CBLR framework, fostering economic growth and lending in local communities without compromising financial stability.
Opponents contend
Critics might express concerns that lowering capital requirements, even for community banks, could incrementally increase systemic risk or reduce the resilience of the financial system during economic downturns. They may argue that while regulatory relief is desirable, it should not come at the expense of robust capital buffers, especially given past financial crises. Some might also argue that the changes do not go far enough to address the challenges faced by the smallest community banks, or conversely, that they extend too much flexibility to banks approaching the $15 billion threshold.
The bill is very concise and can be read and understood quickly, making it highly accessible for anyone wishing to evaluate its provisions.
Section 2(a)(1)
Increased Asset Threshold for CBLR Eligibility
This provision raises the maximum asset size for banks to qualify for the Community Bank Leverage Ratio (CBLR) framework. Previously, only banks with less than $10 billion in assets could opt into this simplified capital calculation. This amendment increases that limit to $15 billion, making more community banks eligible for the streamlined regulatory approach.
Supporters argue
Proponents argue that expanding CBLR eligibility to banks with up to $15 billion in assets will provide much-needed regulatory relief to a broader segment of community banks. This allows these institutions to allocate fewer resources to complex capital calculations and more to lending and community development, fostering local economic growth.
Critics contend
Opponents might contend that extending simplified capital rules to larger institutions, even if still considered 'community banks,' could introduce additional risk into the financial system. They may argue that banks approaching $15 billion in assets face different complexities and risks than smaller institutions and should therefore be subject to more stringent capital requirements.
Tradeoffs
The provision balances the desire for regulatory simplification and burden reduction for community banks against potential concerns about maintaining robust capital standards for slightly larger institutions.
Section 2(a)(2)
Adjusted Community Bank Leverage Ratio Range
This provision modifies the acceptable range for the Community Bank Leverage Ratio (CBLR) itself. It changes the minimum and maximum required leverage ratio from 'not less than 8 percent and not more than 10 percent' to 'not less than 6 percent and not more than 8 percent.' This effectively lowers the capital cushion required for qualifying community banks under this simplified framework.
Section 2(b) and Section 3
Mandated Review and Rulemaking for CBLR
This section requires the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (FDIC) to conduct a comprehensive review of the Community Bank Leverage Ratio (CBLR). The review must focus on how to modify and calibrate the CBLR to encourage more qualifying community banks, especially those with fewer assets, to opt into the framework and to provide regulatory compliance burden relief. Following this review, the agencies must issue a report with specific recommendations to Congress and then propose and finalize rules to implement the amendments made by this Act and the recommended modifications from their report within specific deadlines.