The Federal Reserve Board, together with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, issued a final rule revising the community bank leverage ratio (CBLR) framework to expand community banks’ ability to use a simplified capital measure instead of risk-based capital ratios. The rule, adopted without change from the November 2025 proposal, lowers the CBLR threshold from 9% to 8% and extends the grace period for a community bank that temporarily falls out of compliance from two quarters to four quarters. Community banks that opt into the framework must still maintain a leverage ratio that is significantly higher than the leverage ratio standard otherwise applicable to community banks. The changes take effect on July 1, 2026.
Federal Reserve Board 2026-04-23
Federal Reserve Board, FDIC and OCC finalize rule lowering the community bank leverage ratio to 8%
The Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency issued a final rule revising the community bank leverage ratio framework to expand use of a simplified capital measure instead of risk-based capital ratios. Adopted as proposed in November 2025, the rule lowers the leverage ratio threshold from 9% to 8% and extends the non-compliance grace period from two to four quarters, while still requiring a ratio significantly above the standard for community banks.