The U.S. House Financial Services Committee held a hearing on the state of community banking, with Chairman French Hill outlining a committee agenda to pursue “commonsense” reforms aimed at reducing regulatory burdens and improving access to capital for community banks. Hill also pointed to attached discussion drafts intended to frame the committee’s work on community banking legislation. Hill highlighted the contraction in the U.S. banking sector from over 8,500 Federal Deposit Insurance Corporation-insured banks in 1999 to just over 4,000 today, alongside a sharp decline in new bank formation, from 190 new bank charters in 1999 to 82 de novo bank charters issued since 2010. He argued that community banks face regulatory requirements that consume resources and that multi-agency chartering processes and high initial capital expectations in practice, cited as up to USD 30 million and in one example USD 50 million, deter new entrants. The committee’s stated priorities include regulatory fairness, transparency and right-sizing, supporting bank health, sound growth and competition, and improving access to funding and capital, building on principles Hill released in November 2024 with more than 30 reform ideas. The discussion drafts are positioned as the starting point for further committee conversations and hearings throughout the 119th Congress.
U.S. Financial Services Committee 2025-02-05
U.S. House Financial Services Committee launches community banking reform agenda with hearing and discussion drafts
The U.S. House Financial Services Committee, led by Chairman French Hill, held a hearing on community banking reforms to reduce regulatory burdens and improve capital access. Hill noted the decline in U.S. banks and new formations, citing regulatory challenges and high capital requirements as barriers. The committee's priorities include regulatory fairness, transparency, and supporting bank health, with discussion drafts as a basis for future legislative efforts.