Agencies Issue Proposal to Enhance Community Banks’ Ability to Serve Their Communities While Maintaining Strong Capital Requirements — 2025-11-25

The federal bank regulatory agencies today invited public comment on a proposal that would implement changes to the community bank leverage ratio framework in accordance with statutory authority. By incorporating these changes, the revisions would reduce regulatory burden and provide community banks with greater flexibility and optionality in their capital management approach. The proposal reflects a deeper understanding of the unique business models, risk profiles, and operational realities of community banks. These tailored modifications represent a necessary step in continuing to focus attention on the unique needs of community banks in today’s financial landscape. The community bank leverage ratio, adopted in 2019, simplifies regulatory capital requirements for community banks by allowing them to adopt a relatively simple leverage ratio to measure capital adequacy. A bank that opts into the framework is not required to calculate and report risk-based capital ratios.