The Federal Deposit Insurance Corporation, the Federal Reserve Board and the Office of the Comptroller of the Currency issued a proposal to revise the community bank leverage ratio (CBLR) framework under statutory authority, aiming to reduce regulatory burden and give community banks more flexibility in capital management while retaining strong capital requirements. The CBLR, adopted in 2019, allows eligible community banks that opt in to use a simplified leverage ratio measure of capital adequacy and avoid calculating and reporting risk-based capital ratios. The proposal would reduce the CBLR requirement to 8% from 9% and extend the grace period for an opt-in community bank that falls out of compliance to return to compliance to four quarters from two. The agencies also stated the framework would continue to require capital consistent with community bank safety and soundness and comparable to or higher than the risk-based capital framework, while keeping the leverage ratio at twice the minimum leverage ratio applicable to community banks that do not opt in. Comments are due 60 days after publication in the Federal Register.
Office of the Comptroller of the Currency 2025-11-25
FDIC, Federal Reserve Board and Office of the Comptroller of the Currency propose lowering the community bank leverage ratio to 8% and extending the grace period to four quarters
The Federal Deposit Insurance Corporation, Federal Reserve Board, and Office of the Comptroller of the Currency proposed revisions to the community bank leverage ratio (CBLR) framework to reduce regulatory burden and enhance capital management flexibility. The proposal lowers the CBLR requirement to 8% from 9% and extends the compliance grace period to four quarters, maintaining capital requirements consistent with community bank safety and soundness.