Florida Banking April/May 2026

Right-Sizing Regulation for Community Banks PRESIDENT'S PERSPECTIVE

all bankers to provide input. No issue is too small. If a rule is outdated, unnecessarily complex, duplicative or simply does not make sense for the size and risk profile of your institution, it should be raised. Many of the most meaningful reforms begin with practical observations from the bankers who deal with these rules every day. Congress is also moving bills to right size community bank regulation. House Financial Services Committee Chairman French Hill, with the help of many friends on the Committee, has advanced the Main Street Capital Access Act , legislation that would restore meaningful tailoring across the regulatory framework. Among other reforms, the bill would raise the asset threshold for the Federal Reserve’s Small Bank Holding Company Policy Statement from $3 billion to $25 billion, increase eligibility for the Community Bank Leverage Ratio framework from $10 billion to $15 billion, and reduce the statutory CBLR range to 6-8 percent to provide greater flexibility for well-capitalized community banks. The legislation also would index certain regulatory thresholds to nominal GDP so regulatory requirements evolve with economic growth rather than becoming more restrictive over time simply because the economy expands. He has also demonstrated flexibility and leadership in adjusting to the proposals to gain bipartisan support along the way. These bills underscore an important reality: while regulators can make important adjustments through rulemaking and supervision, only Congress can make those reforms durable. Further, policymakers cannot do this work alone. They need public support from us, and they need continued insights as to the biggest pain points holding you back from serving your customers and communities. Please respond to FBA calls to action and let us know your ideas!

There is growing momentum in Washington to bring greater balance and common sense to bank regulation. That action deserves recognition and requires your support! Over the past year, the federal banking agencies have taken meaningful steps to tailor regulation and supervision. Treasury Secretary Bessent has made this a priority, and President Trump recently issued an Executive Order to bring community banks back into the mortgage business as one prong to address home affordability. Fed Vice Chair Bowman, FDIC Chairman Hill, and OCC Comptroller Gould have made clear their commitment to focusing oversight on material financial risk rather than unnecessary and outdated bureaucracy. They are leaving no stone unturned! The list is lengthy, and they are just getting started. For example, the FDIC and OCC issued a joint proposed regulation to focus examiners on material financial risks by defining “unsafe or unsound practices” and “matters requiring attention.” Both agencies have already adjusted training manuals and will update them to match the final rule. The banking agencies have finalized changes to the enhanced supplementary leverage ratio, and modifications to the community bank leverage ratio will be finalized soon based on the comments submitted. Risk based capital rules implementing Basel III are out for comment, and the agencies are working on reforms to the CAMELS rating system. They are streamlining BSA/AML requirements and going through the list of long-needed reforms. Bowman has been advocating for streamlining and focusing regulation for community bankers for a long time — and is now in a seat to drive the Fed’s reforms. She has emphasized the importance of understanding the hidden costs of supervision and compliance and calling on

KATHY KRANINGER

FBA PRESIDENT & CEO “

Policymakers need our support and continued insights as to pain

points holding you back from serving your customers and communities.”

Upcoming Event CFO Forum Where Florida Financial Leaders Connect Renaissance Orlando Resort Disney Springs Lake Buena Vista, Florida Learn more: May 14-15, 2026

floridabankers.com /fba-cfo-forum.html

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