The Office of the Comptroller of the Currency, Federal Reserve Board and Federal Deposit Insurance Corporation have updated their compliance guide for the optional community bank leverage ratio framework to reflect changes effective July 1, 2026. The revised framework lowers the leverage ratio requirement from 9% to greater than 8%, expanding eligibility among qualifying community banking organizations with less than USD 10 billion in total consolidated assets. Eligible organizations that elect the framework are deemed to satisfy applicable risk-based and leverage capital requirements and avoid calculating and reporting risk-based capital ratios. The framework extends the grace period for an electing organization that ceases to meet a qualifying criterion from two quarters to four, provided its leverage ratio remains greater than 7%. Grace-period use is limited to eight of the previous 20 quarters. An organization must move to the risk-based capital framework if it does not restore compliance during the grace period, has a leverage ratio of 7% or less, exhausts the grace-period limit or ceases to qualify because of a merger or acquisition.
Federal Deposit Insurance Corporation2026-07-30
Office of the Comptroller of the Currency, Federal Reserve Board and Federal Deposit Insurance Corporation update community bank leverage ratio compliance guide
The federal banking agencies updated their community bank leverage ratio compliance guide to reflect an eligibility threshold of greater than 8% and a four-quarter grace period. The optional framework applies to qualifying community banking organizations with less than USD 10 billion in assets, while grace-period use is capped at eight of the previous 20 quarters.