Notice of Proposed Rulemaking on Revisions to the Community Bank Leverage Ratio (CBLR) Framework
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FDIC Financial Institution Letters › Notice of Proposed Rulemaking on Revisions to the Community Bank Leverage Ratio (CBLR) Framework
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This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
Proposed Rules
Federal Register
55048
Vol. 90, No. 228
Monday, December 1, 2025
DEPARTMENT OF TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket ID OCC–2025–0141]
RIN 1557–AF33
FEDERAL RESERVE SYSTEM
12 CFR Part 217
[Docket No. R–1876]
RIN 7100–AH08
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 324
RIN 3064–AG17
Regulatory Capital Rule: Revisions to
the Community Bank Leverage Ratio
Framework
AGENCY: Office of the Comptroller of the
Currency, Treasury; the Federal Deposit
Insurance Corporation; and the Board of
Governors of the Federal Reserve
System.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Office of the Comptroller
of the Currency, the Board of Governors
of the Federal Reserve System, and the
Federal Deposit Insurance Corporation
are inviting public comment on a notice
of proposed rulemaking (proposal) that
would lower the community bank
leverage ratio (CBLR) requirement for
certain depository institutions and
depository institution holding
companies from 9 percent to 8 percent,
consistent with the lower bound
provided in section 201 of the Economic
Growth, Regulatory Relief, and
Consumer Protection Act. The proposal
would also extend the length of time
that certain depository institutions or
depository institution holding
companies can remain in the CBLR
framework while not meeting all of the
qualifying criteria for the CBLR
framework from two quarters to four
quarters, subject to a limit of eight
quarters in any five-year period.
DATES: Comments must be received by
January 30, 2026.
ADDRESSES: Comments should be
directed to the agencies as follows:
OCC: You may submit comments to
the OCC by any of the methods set forth
below
the CBLR
framework while not meeting all of the
qualifying criteria for the CBLR
framework from two quarters to four
quarters, subject to a limit of eight
quarters in any five-year period.
DATES: Comments must be received by
January 30, 2026.
ADDRESSES: Comments should be
directed to the agencies as follows:
OCC: You may submit comments to
the OCC by any of the methods set forth
below. Commenters are encouraged to
submit comments through the Federal
eRulemaking Portal. Please use the title
‘‘Regulatory Capital Rule: Revisions to
the Community Bank Leverage Ratio
Framework’’ to facilitate the
organization and distribution of the
comments. You may submit comments
by any of the following methods:
• Federal eRulemaking Portal—
Regulations.gov:
Go to https://regulations.gov/. Enter
Docket ID ‘‘OCC–2025–0141’’ in the
Search Box and click ‘‘Search.’’ Public
comments can be submitted via the
‘‘Comment’’ box below the displayed
document information or by clicking on
the document title and then clicking the
‘‘Comment’’ box on the top-left side of
the screen. For help with submitting
effective comments, please click on
‘‘Commenter’s Checklist.’’ For
assistance with the Regulations.gov site,
please call 1–866–498–2945 (toll free)
Monday–Friday, 9 a.m.–5 p.m. EST, or
email regulationshelpdesk@gsa.gov.
• Mail: Chief Counsel’s Office,
Attention: Comment Processing, Office
of the Comptroller of the Currency, 400
7th Street SW, Suite 3E–218,
Washington, DC 20219.
• Hand Delivery/Courier: 400 7th
Street SW, Suite 3E–218, Washington,
DC 20219.
Instructions: You must include
‘‘OCC’’ as the agency name and Docket
ID ‘‘OCC–2025–0141’’ in your comment.
In general, the OCC will enter all
comments received into the docket and
publish the comments on the
Regulations.gov website without
change, including any business or
personal information provided such as
name and address information, email
addresses, or phone numbers
n,
DC 20219.
Instructions: You must include
‘‘OCC’’ as the agency name and Docket
ID ‘‘OCC–2025–0141’’ in your comment.
In general, the OCC will enter all
comments received into the docket and
publish the comments on the
Regulations.gov website without
change, including any business or
personal information provided such as
name and address information, email
addresses, or phone numbers.
Comments received, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. Do not
include any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
You may review comments and other
related materials that pertain to this
action by the following method:
• Viewing Comments Electronically—
Regulations.gov:
Go to https://regulations.gov/. Enter
Docket ID ‘‘OCC–2025–0141’’ in the
Search Box and click ‘‘Search.’’ Click on
the ‘‘Dockets’’ tab and then the
document’s title. After clicking the
document’s title, click the ‘‘Browse All
Comments’’ tab. Comments can be
viewed and filtered by clicking on the
‘‘Sort By’’ drop-down on the right side
of the screen or the ‘‘Refine Comments
Results’’ options on the left side of the
screen. Supporting materials can be
viewed by clicking on the ‘‘Browse
Documents’’ tab. Click on the ‘‘Sort By’’
drop-down on the right side of the
screen or the ‘‘Refine Results’’ options
on the left side of the screen checking
the ‘‘Supporting & Related Material’’
checkbox. For assistance with the
Regulations.gov site, please call 1–866–
498–2945 (toll free) Monday–Friday, 9
a.m.–5 p.m. EST, or email
regulationshelpdesk@gsa.gov.
The docket may be viewed after the
close of the comment period in the same
manner as during the comment period.
Board: You may submit comments,
identified by Docket No. R–1876 and
RIN 7100–AH08, by any of the following
methods:
• Agency website: https://
www.federalreserve.gov/apps/
proposals/
498–2945 (toll free) Monday–Friday, 9
a.m.–5 p.m. EST, or email
regulationshelpdesk@gsa.gov.
The docket may be viewed after the
close of the comment period in the same
manner as during the comment period.
Board: You may submit comments,
identified by Docket No. R–1876 and
RIN 7100–AH08, by any of the following
methods:
• Agency website: https://
www.federalreserve.gov/apps/
proposals/. Follow the instructions for
submitting comments, including
attachments. Preferred Method.
• Mail: Benjamin W. McDonough,
Deputy Secretary, Board of Governors of
the Federal Reserve System, 20th Street
and Constitution Avenue NW,
Washington, DC 20551.
• Hand Delivery/Courier: Same as
mailing address.
• Other Means: publiccomments@
frb.gov. You must include the docket
number in the subject line of the
message.
Comments received are subject to
public disclosure. In general, comments
received will be made available on the
Board’s website at https://
www.federalreserve.gov/apps/
proposals/ without change and will not
be modified to remove personal or
business information including
confidential, contact, or other
identifying information. Comments
should not include any information
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1 12 CFR 3.12 (OCC); 12 CFR 217.12 (Board); 12
CFR 324.12 (FDIC).
2 Public Law 115–174, 132 Stat. 1296, 1306–07
s
should not include any information
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1 12 CFR 3.12 (OCC); 12 CFR 217.12 (Board); 12
CFR 324.12 (FDIC).
2 Public Law 115–174, 132 Stat. 1296, 1306–07
(2018) (codified at 12 U.S.C. 5371 note). The
authorizing statute uses the term ‘‘qualifying
community bank,’’ whereas the agencies’
regulations implementing the statute use the term
‘‘qualifying community banking organization.’’ See,
e.g., 12 CFR 3.12(a)(2) (OCC); 12 CFR 217.12(a)(2)
(Board); 12 CFR 324.12(a)(2) (FDIC). The terms
generally have the same meaning. Section 201(a)(3)
of EGRRCPA provides that a qualifying community
banking organization is a depository institution or
depository institution holding company with total
consolidated assets of less than $10 billion that
satisfies such other factors, based on the banking
organization’s risk profile, that the agencies
determine are appropriate. Section 201(a)(3) further
provides that this determination shall be based on
consideration of off-balance sheet exposures,
trading assets and liabilities, total notional
derivatives exposures, and such other factors that
the agencies determine appropriate.
3 The OCC’s capital rule is at 12 CFR part 3. The
Board’s capital rule is at 12 CFR part 217. The
FDIC’s capital rule is at 12 CFR part 324.
4 84 FR 61776 (Nov. 13, 2019).
5 See 12 CFR 3.10(b)(4) (OCC); 12 CFR
217.10(b)(4) (Board); 12 CFR 324.10(b)(4) (FDIC).
6 See 12 CFR 3.12(a)(2) (OCC); 12 CFR
217.12(a)(2) (Board); 12 CFR 324.12(a)(2) (FDIC).
7 See 12 CFR 3.100(b) (OCC); 12 CFR 217.100(b)
(Board); 12 CFR 324.100(b) (FDIC).
such as confidential information that
would be not appropriate for public
disclosure. Public comments may also
be viewed electronically or in person in
Room M–4365A, 2001 C St
10(b)(4) (Board); 12 CFR 324.10(b)(4) (FDIC).
6 See 12 CFR 3.12(a)(2) (OCC); 12 CFR
217.12(a)(2) (Board); 12 CFR 324.12(a)(2) (FDIC).
7 See 12 CFR 3.100(b) (OCC); 12 CFR 217.100(b)
(Board); 12 CFR 324.100(b) (FDIC).
such as confidential information that
would be not appropriate for public
disclosure. Public comments may also
be viewed electronically or in person in
Room M–4365A, 2001 C St. NW,
Washington, DC 20551, between 9 a.m.
and 5 p.m. during Federal business
weekdays.
FDIC: You may submit comments,
identified by RIN 3064–AG17, by any of
the following methods:
Agency website: https://www.fdic.gov/
federal-register-publications. Follow
instructions for submitting comments
on the FDIC’s website.
Mail: Jennifer M. Jones, Deputy
Executive Secretary, Attention:
Comments/Legal OES RIN 3064–AG17,
Federal Deposit Insurance Corporation,
550 17th Street NW, Washington, DC
20429.
Hand Delivered/Courier: Comments
may be hand-delivered to the guard
station at the rear of the 550 17th Street
NW, building (located on F Street NW)
on business days between 7 a.m. and 5
p.m. eastern time.
Email: comments@FDIC.gov. Include
the RIN 3064–AG17 on the subject line
of the message.
Public Inspection: Comments
received, including any personal
information provided, may be posted
without change to https://www.fdic.gov/
federal-register-publications.
Commenters should submit only
information that the commenter wishes
to make available publicly. The FDIC
may review, redact, or refrain from
posting all or any portion of any
comment that it may deem to be
inappropriate for publication, such as
irrelevant or obscene material. The FDIC
may post only a single representative
example of identical or substantially
identical comments, and in such cases
will generally identify the number of
identical or substantially identical
comments represented by the posted
example
refrain from
posting all or any portion of any
comment that it may deem to be
inappropriate for publication, such as
irrelevant or obscene material. The FDIC
may post only a single representative
example of identical or substantially
identical comments, and in such cases
will generally identify the number of
identical or substantially identical
comments represented by the posted
example. All comments that have been
redacted, as well as those that have not
been posted, that contain comments on
the merits of this notice will be retained
in the public comment file and will be
considered as required under all
applicable laws. All comments may be
accessible under the Freedom of
Information Act.
FOR FURTHER INFORMATION CONTACT:
OCC: Benjamin Pegg, Technical
Expert, Capital Policy, (202) 649–6370;
or Carl Kaminski, Assistant Director,
Ron Shimabukuro, Senior Counsel or
Daniel Perez, Counsel, Bank Advisory
Group, Chief Counsel’s Office, (202)
649–5490, Office of the Comptroller of
the Currency, 400 7th Street SW,
Washington, DC 20219. If you are deaf,
hard of hearing, or have a speech
disability, please dial 7–1–1 to access
telecommunications relay services.
Board: Juan Climent, Deputy
Associate Director, (202) 872–7526;
Morgan Lewis, Manager, (202) 407–
5093; Missaka Nuwan
Warusawitharana, Manager, (202) 452–
3461; Lars Arnesen, Senior Financial
Institution Policy Analyst, (202) 868–
0546, Division of Supervision and
Regulation; or Jay Schwarz, Deputy
Associate General Counsel, (202) 731–
8852; Mark Buresh, Senior Special
Counsel, (202) 499–0261; Jasmin
Keskinen, Counsel, (202) 853–7872,
Legal Division, Board of Governors of
the Federal Reserve System, 20th and C
Streets NW, Washington, DC 20551. For
the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), (202) 263–4869
pervision and
Regulation; or Jay Schwarz, Deputy
Associate General Counsel, (202) 731–
8852; Mark Buresh, Senior Special
Counsel, (202) 499–0261; Jasmin
Keskinen, Counsel, (202) 853–7872,
Legal Division, Board of Governors of
the Federal Reserve System, 20th and C
Streets NW, Washington, DC 20551. For
the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), (202) 263–4869.
FDIC: Benedetto Bosco, Chief, Capital
Policy Section; Kyle McCormick, Senior
Policy Analyst; Keith Bergstresser,
Senior Policy Analyst; Matthew Park,
Financial Analyst; Rachel Romm-
Nisson, Risk Analytics Specialist;
Capital Markets and Accounting Policy
Branch, Division of Risk Management
Supervision; Catherine Wood, Counsel;
Merritt Pardini, Counsel; Kevin Zhao,
Senior Attorney; Nicholas Soyer,
Attorney; Legal Division,
regulatorycapital@fdic.gov, (202) 898–
6888; Federal Deposit Insurance
Corporation, 550 17th Street NW,
Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
A. Economic Growth, Regulatory Relief,
and Consumer Protection Act
The community bank leverage ratio
(CBLR) framework 1 implements section
201 of the Economic Growth, Regulatory
Relief, and Consumer Protection Act
(EGRRCPA), which requires the Office
of the Comptroller of the Currency
(OCC), the Board of Governors of the
Federal Reserve System (Board), and the
Federal Deposit Insurance Corporation
(FDIC) (collectively, the agencies) to
establish a community bank leverage
ratio (the CBLR requirement) of not less
than 8 percent and not more than 10
percent for qualifying community
banking organizations.2
Under section 201(c) of EGRRCPA, a
qualifying community banking
organization that exceeds the CBLR
requirement shall be considered to have
met: (i) the generally applicable risk-
based and leverage capital requirements
in the capital rule; 3 (ii) the capital ratio
requirements to be considered well
capitalized under the agencies’ prompt
corrective action (PCA) framework (in
the case of insured
ection 201(c) of EGRRCPA, a
qualifying community banking
organization that exceeds the CBLR
requirement shall be considered to have
met: (i) the generally applicable risk-
based and leverage capital requirements
in the capital rule; 3 (ii) the capital ratio
requirements to be considered well
capitalized under the agencies’ prompt
corrective action (PCA) framework (in
the case of insured depository
institutions); and (iii) any other
applicable capital or leverage
requirements. Section 201(b) of
EGRRCPA also requires each of the
agencies to establish procedures for the
treatment of a qualifying community
banking organization whose leverage
ratio falls below the CBLR requirement
as established by each of the agencies.
In 2019, the agencies issued a final
rule establishing the CBLR framework,
which became effective January 1, 2020
(2019 final rule).4 Under the 2019 final
rule, each of the agencies established a
CBLR requirement of greater than 9
percent. The CBLR was defined by
reference to the capital rule’s existing
leverage ratio, equal to tier 1 capital
divided by average total consolidated
assets.5
Under the 2019 final rule, depository
institutions and depository institution
holding companies that have less than
$10 billion in total consolidated assets;
leverage ratios of greater than 9 percent;
off-balance sheet exposures (excluding
derivatives other than sold credit
derivatives and unconditionally
cancelable commitments) of 25 percent
or less of total consolidated assets; and
trading assets and liabilities of 5 percent
or less of total consolidated assets
(qualifying community banking
organizations) are eligible to opt into the
CBLR framework.6 A qualifying
community banking organization also
cannot be an advanced approaches
banking organization.7
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or less of total consolidated assets
(qualifying community banking
organizations) are eligible to opt into the
CBLR framework.6 A qualifying
community banking organization also
cannot be an advanced approaches
banking organization.7
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8 12 CFR 6.4(b)(1)(ii) (OCC); 12 CFR
208.43(b)(1)(ii) (Board); 12 CFR 324.403(b)(1)(ii)
(FDIC). See also 12 CFR 225.2(r)(4)(i) (Board). In
addition to the capital ratio requirements, to be
considered well capitalized under the PCA
framework, a bank must also demonstrate that it is
not subject to any written agreement, order, capital
directive, or as applicable, prompt corrective action
directive, to meet and maintain a specific capital
level for any capital measure. 12 CFR 6.4(b)(1)(i)(E)
(OCC); 12 CFR 208.43(b)(1)(i)(E) (Board); 12 CFR
324.403(b)(1)(i)(E) (FDIC). See also 12 CFR
225.2(r)(1)(iii) (Board). These requirements
continue to apply under the community bank
leverage ratio framework.
9 See 84 FR 61776, 61778, 61780, 61784 (Nov. 13,
2019).
10 Coronavirus Aid, Relief, and Economic
Security Act, Public Law 116–136, 134 Stat. 281.
11 85 FR 22924 (Apr. 23, 2020). The threshold for
the grace period under the statutory interim final
rule was set at 7 percent, 1 percent less than the
CBLR requirement of 8 percent under the statutory
interim final rule.
12 85 FR 22930 (Apr. 23, 2020). The transition
interim final rule extended the 8 percent CBLR
requirement through December 31, 2020. Thus,
even if the statutory interim final rule had
terminated prior to December 31, 2020, the
transition interim final rule provided that the CBLR
requirement would continue to be set at 8 percent
for the remainder of 2020
r the statutory
interim final rule.
12 85 FR 22930 (Apr. 23, 2020). The transition
interim final rule extended the 8 percent CBLR
requirement through December 31, 2020. Thus,
even if the statutory interim final rule had
terminated prior to December 31, 2020, the
transition interim final rule provided that the CBLR
requirement would continue to be set at 8 percent
for the remainder of 2020. The threshold for the
grace period under the transition interim final rule
was set at 1 percent less than the CBLR requirement
as it increased during the transition period.
13 Id., at 22932–22933.
14 While the statutory interim final rule was in
effect, a qualifying community banking organization
that temporarily failed to meet any of the qualifying
criteria, including the applicable community bank
leverage ratio requirement, generally would still be
deemed well capitalized so long as the banking
organization maintained a leverage ratio of 7
percent or greater during a two-quarter grace period.
Similarly, while the statutory interim final rule was
in effect, a banking organization that failed to meet
the qualifying criteria by the end of the grace period
or reported a leverage ratio of less than 7 percent
was required to comply with the risk-based
requirements and file the appropriate regulatory
reports.
15 85 FR 64003 (Oct. 9, 2020).
16 ‘‘Community Bank Leverage Ratio Framework:
Interagency Statement,’’ OCC Bulletin 2021–66
(Dec. 21, 2021); ‘‘Interagency Statement on the
Community Bank Leverage Ratio Framework,’’ SR
Letter 21–21 (Dec. 21, 2021); ‘‘Interagency
Statement on the Community Bank Leverage Ratio
Framework,’’ FIL–81–2021 (Dec. 21, 2021)
d file the appropriate regulatory
reports.
15 85 FR 64003 (Oct. 9, 2020).
16 ‘‘Community Bank Leverage Ratio Framework:
Interagency Statement,’’ OCC Bulletin 2021–66
(Dec. 21, 2021); ‘‘Interagency Statement on the
Community Bank Leverage Ratio Framework,’’ SR
Letter 21–21 (Dec. 21, 2021); ‘‘Interagency
Statement on the Community Bank Leverage Ratio
Framework,’’ FIL–81–2021 (Dec. 21, 2021).
A qualifying community banking
organization that elects to use the CBLR
framework is considered to satisfy the
risk-based capital requirements and any
other applicable capital or leverage
requirements and, in the case of an
insured depository institution, to meet
the capital ratio requirements for the
well capitalized capital category under
the PCA framework.8 The agencies
adopted the 9 percent requirement on
the basis that this threshold, with
complementary qualifying criteria,
would generally maintain the level of
regulatory capital held by qualifying
community banking organizations and
support the agencies’ goal of reducing
regulatory burden while maintaining
safety and soundness.9
The 2019 final rule also established a
two-quarter grace period during which a
qualifying community banking
organization that fails to meet any of the
qualifying criteria, including the 9
percent CBLR requirement, but
maintains a leverage ratio of greater than
8 percent, would continue to be
considered to satisfy the risk-based
capital requirements and any other
applicable capital or leverage
requirements and, in the case of an
insured depository institution, to meet
the capital ratio requirements for the
well capitalized capital category under
the PCA framework. If a community
banking organization returns to
compliance with all the qualifying
criteria before the conclusion of the two-
quarter grace period, the banking
organization could continue to
participate in the CBLR framework
ments and, in the case of an
insured depository institution, to meet
the capital ratio requirements for the
well capitalized capital category under
the PCA framework. If a community
banking organization returns to
compliance with all the qualifying
criteria before the conclusion of the two-
quarter grace period, the banking
organization could continue to
participate in the CBLR framework. A
community banking organization that
either failed to meet all of the qualifying
criteria by the end of the grace period
or that, at any time, failed to maintain
a leverage ratio of greater than 8 percent
would be required to comply with the
risk-based capital requirements and file
the associated information in its
regulatory reports.
B. Coronavirus Aid, Relief, and
Economic Security Act
On March 27, 2020, the Coronavirus
Aid, Relief, and Economic Security Act
(CARES Act) was signed into law.10 The
CARES Act directed the agencies to
make temporary changes to the CBLR
framework. Specifically, section 4012 of
the CARES Act directed the agencies to
help mitigate economic strain placed on
qualifying community banking
organizations by issuing an interim final
rule that would temporarily lower the
CBLR requirement to 8 percent and
provide a reasonable grace period for
qualifying community banking
organizations that fell below the 8
percent requirement. Under section
4012 of the CARES Act, the changes to
the CBLR framework were effective
during the period beginning on the date
on which the agencies issued the
interim final rule implementing the
statute and ending on the sooner of the
termination date of the national
emergency concerning the coronavirus
disease (COVID–19) outbreak declared
by the President on March 13, 2020,
under the National Emergencies Act, or
December 31, 2020
ges to
the CBLR framework were effective
during the period beginning on the date
on which the agencies issued the
interim final rule implementing the
statute and ending on the sooner of the
termination date of the national
emergency concerning the coronavirus
disease (COVID–19) outbreak declared
by the President on March 13, 2020,
under the National Emergencies Act, or
December 31, 2020.
The agencies issued an interim final
rule implementing the CARES Act’s
temporary changes to the CBLR
framework on April 23, 2020 (statutory
interim final rule).11 To provide for a
more gradual return to the initial CBLR
calibration, the agencies also issued a
separate interim final rule providing a
graduated transition from the temporary
8 percent CBLR requirement back to the
9 percent requirement (transition
interim final rule).12 The agencies
intended for this graduated approach to
provide community banking
organizations with sufficient time to
meet the 9 percent requirement while
they focused on supporting lending to
creditworthy households and businesses
through the economic strain caused by
COVID–19.13 The interim final rules did
not make any changes to the other
qualifying criteria in the CBLR
framework.
Consistent with section 201(c) of
EGRRCPA, under the transition interim
final rule, a community banking
organization that temporarily failed to
meet any of the qualifying criteria,
including the applicable CBLR
requirement, generally would have been
considered to satisfy the risk-based
capital requirements and any other
applicable capital or leverage
requirements and, in the case of an
insured depository institution, to meet
the capital ratio requirements for the
well capitalized capital category under
the PCA framework during a two-
quarter grace period so long as the
community banking organization
maintained a leverage ratio of the
following: greater than 7 percent in the
second quarter through fourth quarter of
calendar year 2020, greater than 7.5
percent in calenda
insured depository institution, to meet
the capital ratio requirements for the
well capitalized capital category under
the PCA framework during a two-
quarter grace period so long as the
community banking organization
maintained a leverage ratio of the
following: greater than 7 percent in the
second quarter through fourth quarter of
calendar year 2020, greater than 7.5
percent in calendar year 2021, and
greater than 8 percent thereafter.14 A
community banking organization that
failed to meet the qualifying criteria by
the end of the grace period or that
reported a leverage ratio of equal to or
less than 7 percent in the second
through fourth quarters of calendar year
2020, equal to or less than 7.5 percent
in calendar year 2021, or equal to or less
than 8 percent thereafter, would have
been required to comply immediately
with the risk-based capital requirements
and file the associated regulatory
reports. Both interim final rules were
finalized without change.15
On December 21, 2021, the agencies
issued a statement confirming that the
CARES Act’s temporary changes to the
CBLR framework would expire at the
end of 2021.16 The CBLR requirement
reverted to 9 percent on January 1, 2022.
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17 Analysis summarized in sections II and III is
conducted at the community banking organization
level and includes depository institutions and
depository institution holding companies with less
than $10 billion in total consolidated assets
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17 Analysis summarized in sections II and III is
conducted at the community banking organization
level and includes depository institutions and
depository institution holding companies with less
than $10 billion in total consolidated assets.
Specifically, community banking organization level
analysis uses data that combines FR Y–9C data for
top-tier holding companies with Call Report data
for depository institutions that are standalone or do
not have a holding company with less than $10
billion in total consolidated assets that files an FR
Y–9C report. In instances where consolidated
regulatory data are not available at the consolidated
organization level, data are aggregated at the
banking organization level by combining the
balance sheets of certain depository institutions that
share the same consolidating parent. Section V
includes additional analysis at the depository
institution and holding company level.
18 As of the second quarter of 2025, community
banking organizations that participate in the
framework maintain median leverage ratios of 11.8
percent, reflecting median levels of capital 2.8
percentage points above the current 9 percent
requirement.
19 This analysis compares the proposed 8 percent
CBLR requirement relative to the 8 percent tier 1
risk-based capital requirement to be considered
well capitalized under the PCA framework for all
community banking organizations that would
qualify under the proposal, but which are not
currently participating in the CBLR framework, in
order to demonstrate the stringency of the CBLR
relative to risk-based capital requirements. The PCA
framework applies only to insured depository
institutions. The definitions of well capitalized for
bank holding companies and savings and loan
holding companies can be found at 12 CFR 225.2(r)
and 12 CFR 238.2(s), respectively
which are not
currently participating in the CBLR framework, in
order to demonstrate the stringency of the CBLR
relative to risk-based capital requirements. The PCA
framework applies only to insured depository
institutions. The definitions of well capitalized for
bank holding companies and savings and loan
holding companies can be found at 12 CFR 225.2(r)
and 12 CFR 238.2(s), respectively.
20 The agencies also compared required capital
under the proposal to other risk-based capital
requirements including the total capital
requirement and found that the 8 percent CBLR
requirement would broadly require similar or more
capital for the vast majority of depository
institutions that would be eligible under the
proposal.
II. Experience With the Community
Bank Leverage Ratio
As stated in the 2019 final rule, the
CBLR framework is intended to provide
a simple measure of capital adequacy
for qualifying community banking
organizations. It reduces burden by
removing the requirements for
calculating and reporting risk-based
capital ratios for qualifying community
banking organizations that opt into the
framework, thereby providing
meaningful regulatory relief for
qualifying community banking
organizations, while maintaining capital
levels that support safety and
soundness.
As of the second quarter of 2025, the
agencies estimate that 84 percent of
community banking organizations
qualify to use the CBLR framework.17 As
of the second quarter of 2025, 40
percent of community banking
organizations have adopted the CBLR
framework. This adoption rate has
remained relatively constant since the
rule was implemented in 2020. Notably,
data show that smaller banking
organizations are more likely to adopt
the framework, underscoring the value
of the simplification of the regulatory
capital requirements for those banking
organizations
of 2025, 40
percent of community banking
organizations have adopted the CBLR
framework. This adoption rate has
remained relatively constant since the
rule was implemented in 2020. Notably,
data show that smaller banking
organizations are more likely to adopt
the framework, underscoring the value
of the simplification of the regulatory
capital requirements for those banking
organizations. For example,
approximately half of qualifying
community banking organizations with
less than $1 billion in assets have opted
into the framework, compared to a
quarter of qualifying community
banking organizations with more than
$1 billion and less than $10 billion in
assets (see section V.A.2. for more
information).
Since the introduction of the CBLR
framework, the overwhelming majority
of qualifying community banking
organizations that participate in the
framework have continued to operate in
a safe and sound manner through a
range of conditions and most maintain
capital levels well in excess of the CBLR
requirement.18
Some qualifying community banking
organizations that have chosen not to
opt into the CBLR framework have
indicated that they do not believe it
provides effective regulatory burden
relief. These organizations have raised
concerns about the calibration of the
framework and the two-quarter grace
period. As described below, both factors
could discourage broader adoption of
the CBLR framework, as qualifying
community banking organizations
assess the risk and cost of reverting
quickly to the risk-based capital rule as
too great to provide genuine regulatory
relief.
III
relief. These organizations have raised
concerns about the calibration of the
framework and the two-quarter grace
period. As described below, both factors
could discourage broader adoption of
the CBLR framework, as qualifying
community banking organizations
assess the risk and cost of reverting
quickly to the risk-based capital rule as
too great to provide genuine regulatory
relief.
III. Summary of the Proposal
The agencies’ experience in
implementing the CBLR, including
lower-than-expected participation rates,
concerns expressed by community
banking organizations, and sound
performance of qualifying community
banking organizations participating in
the CBLR framework, demonstrate
opportunities to change the CBLR
framework to provide more meaningful
regulatory burden relief, while
continuing to achieve the agencies’
safety and soundness objective.
Accordingly, the agencies are proposing
to recalibrate the CBLR requirement and
to extend the grace period in a manner
consistent with the statutory authority
provided in section 201 of the
EGRRCPA.
A. Lower Calibration of the CBLR
Requirement
The agencies are proposing to lower
the CBLR requirement to 8 percent.
Such recalibration would allow more
community banking organizations to
qualify for the CBLR framework, which
is significantly less burdensome than
the risk-based capital requirements.
According to data from the second
quarter of 2025, an additional 475
community banking organizations
would qualify to participate in the
framework under the proposed 8
percent requirement, and the agencies
estimate that a total of 95 percent of
community banking organizations
would qualify to participate in the CBLR
framework (see section V.B.1. for
additional information)
requirements.
According to data from the second
quarter of 2025, an additional 475
community banking organizations
would qualify to participate in the
framework under the proposed 8
percent requirement, and the agencies
estimate that a total of 95 percent of
community banking organizations
would qualify to participate in the CBLR
framework (see section V.B.1. for
additional information).
In addition to expanding eligibility,
the proposed CBLR recalibration could
encourage community banking
organizations that are currently eligible,
but which are not participating in the
framework, to opt in by providing a
larger buffer between the amount of
regulatory capital held and the CBLR
requirement. A larger buffer would
decrease the likelihood that qualifying
community banking organizations that
participate in the CBLR framework
would be required to revert to the risk-
based capital requirements due to
unexpected fluctuations in regulatory
capital ratios. For example, during
periods of stress, banking organizations
can face increased credit losses, which
in turn cause leverage ratios to decline.
Reducing the CBLR requirement to 8
percent could encourage greater
adoption of the CBLR framework by
qualifying community banking
organizations, as it would decrease the
likelihood that stress losses would cause
them to fall below the CBLR
requirement.
The proposal would remain broadly
consistent with the current well
capitalized standard
which
in turn cause leverage ratios to decline.
Reducing the CBLR requirement to 8
percent could encourage greater
adoption of the CBLR framework by
qualifying community banking
organizations, as it would decrease the
likelihood that stress losses would cause
them to fall below the CBLR
requirement.
The proposal would remain broadly
consistent with the current well
capitalized standard. Specifically, the
CBLR framework would remain
comparable to and, in most cases,
materially more stringent than, the
corresponding requirements under the
PCA framework.19 The proposed 8
percent requirement would be more
stringent than the corresponding 8
percent tier 1 risk-based capital
requirement to be considered well
capitalized under the PCA framework
for all newly eligible community
banking organizations and for nearly all
community banking organizations that
are currently eligible but do not
participate in the CBLR framework (see
section V.B.1 for more information).20
Similarly, an 8 percent CBLR
requirement would be substantially
higher than the 5 percent tier 1 leverage
ratio required to be considered well-
capitalized. As of the second quarter of
2025, all community banking
organizations that would be newly
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21 To be considered well capitalized under the
agencies’ PCA framework, depository institutions
must meet or exceed a 6.5 percent common equity
tier 1 capital risk-based ratio, 8 percent tier 1 capital
risk-based ratio, and 10 percent total capital risk-
based ratio.
22 See Hanauer, M., Lytle, B., Summers, C., &
Ziadeh, S. (2021). Community banks’ ongoing role
in the US economy. Federal Reserve Bank of Kansas
City, Economic Review, 106(2), 37–81.
23 See Id
k, depository institutions
must meet or exceed a 6.5 percent common equity
tier 1 capital risk-based ratio, 8 percent tier 1 capital
risk-based ratio, and 10 percent total capital risk-
based ratio.
22 See Hanauer, M., Lytle, B., Summers, C., &
Ziadeh, S. (2021). Community banks’ ongoing role
in the US economy. Federal Reserve Bank of Kansas
City, Economic Review, 106(2), 37–81.
23 See Id.
24 For an analysis of the impact of a low interest
rate environment on small banking organizations,
see Genay, H., & Podjasek, R. (2014). What is the
impact of a low interest rate environment on bank
profitability. Chicago Fed Letter, 324(1).
25 Qualifying community banking organizations
would continue to opt in to and out of the CBLR
framework through their regulatory reports.
eligible under the proposed 8 percent
CBLR requirement are currently well
capitalized under the PCA framework.21
As further discussed in the economic
analysis in section V.C.2, lowering the
calibration to 8 percent would provide
additional balance sheet capacity for
lending by community banking
organizations that are currently
participating in the CBLR framework.
Community banking organizations serve
a vital function in the economy through
their relatively outsized lending to
agricultural and commercial
borrowers.22 In addition, rural
communities rely heavily on
community banking organizations for
lending and financial services.23
Additional lending by community
banking organizations supports the
economic activity of the communities
and industries that they serve.
B. Extension of the Grace Period
Under the proposal, a qualifying
community banking organization that
fails to meet the qualifying criteria after
opting into the CBLR framework would
have four reporting periods to meet the
qualifying criteria again under the CBLR
framework or satisfy risk-based capital
requirements
the
economic activity of the communities
and industries that they serve.
B. Extension of the Grace Period
Under the proposal, a qualifying
community banking organization that
fails to meet the qualifying criteria after
opting into the CBLR framework would
have four reporting periods to meet the
qualifying criteria again under the CBLR
framework or satisfy risk-based capital
requirements.
Supervisory experience indicates that,
since the adoption of the CBLR
framework, about half of community
banking organizations that fell out of
compliance with the CBLR requirement
returned to compliance within the two-
quarter grace period. The remaining
community banking organizations
transitioned back to the risk-based
capital requirements. Under a four-
quarter grace period, more community
banking organizations could return to
compliance and remain in the CBLR
framework. For additional grace period
analysis, see section V.C.1.
While a majority of community
banking organizations were able to
return to compliance within two
quarters, doing so may have incurred
unnecessary costs or been operationally
challenging in certain circumstances.
For example, in part because
community banking organizations
generally have reduced access to capital
markets compared to larger banking
organizations, they tend to rely more
heavily on retained earnings for
regulatory capital. As a result,
community banking organizations may
face challenges increasing capital
quickly, particularly in environments in
which bank profitability is
constrained.24
The agencies believe the grace period
should ensure that a banking
organization that ceases to meet the
criteria for a qualifying community
banking organization has sufficient time
to make appropriate changes to its
activities and build up its regulatory
capital levels as necessary, or to begin
reporting risk-based capital consistent
with the risk-based capital rule
ty is
constrained.24
The agencies believe the grace period
should ensure that a banking
organization that ceases to meet the
criteria for a qualifying community
banking organization has sufficient time
to make appropriate changes to its
activities and build up its regulatory
capital levels as necessary, or to begin
reporting risk-based capital consistent
with the risk-based capital rule. When
the agencies initially adopted the CBLR
framework, they did not require
community banking organizations to
comply simultaneously with the risk-
based capital reporting requirements
after opting into the CBLR framework.
Since the adoption of the CBLR
framework, it has not been the agencies’
policy to require qualifying community
banking organizations to hold a
minimum amount of common equity
tier 1 capital or to demonstrate, from a
supervisory perspective, that they have
a readiness plan to comply with risk-
based capital requirements in the event
they become ineligible to use the CBLR
framework.
A longer grace period would provide
community banking organizations that
fail to meet the qualifying criteria with
additional time to satisfy the definition
of a qualifying community banking
organization under the CBLR
framework, or to achieve compliance
with risk-based capital requirements. By
reducing the risk of a rapid requirement
to implement the risk-based capital
framework, the proposed changes could
incentivize greater adoption of the less
burdensome CBLR framework.
Under the proposal, a community
banking organization that has opted into
the CBLR framework and no longer
meets the qualifying criteria would have
a four-quarter grace period to remain in
the CBLR framework provided it
maintains a leverage ratio above 7
percent
he risk-based capital
framework, the proposed changes could
incentivize greater adoption of the less
burdensome CBLR framework.
Under the proposal, a community
banking organization that has opted into
the CBLR framework and no longer
meets the qualifying criteria would have
a four-quarter grace period to remain in
the CBLR framework provided it
maintains a leverage ratio above 7
percent. This 7 percent minimum would
ensure that community banking
organizations with capital levels that
have declined significantly would be
subject to the risk-based capital
framework, which more accurately
accounts for a banking organization’s
risk profile.
For example, if a qualifying
community banking organization that
has opted into the CBLR framework no
longer meets one of the qualifying
criteria as of February 15 and still does
not meet the criteria as of the end of that
quarter, the grace period for such a
banking organization will begin as of the
end of the quarter ending March 31. The
banking organization may continue to
use the CBLR framework as of June 30,
September 30, and December 31 but will
need to comply fully with the risk-based
capital framework (including the
associated reporting requirements) as of
March 31 of the following calendar year,
unless by that date the banking
organization once again meets all
qualifying criteria of the CBLR
framework, including a leverage ratio
above 8 percent.25
Consistent with the current rule, a
banking organization that no longer
meets the definition of a qualifying
community banking organization as a
result of a merger or acquisition would
not be able to use the grace period as of
the quarter in which the merger or
acquisition occurs. A banking
organization that plans to grow or
materially expand its activities due to a
merger or acquisition should develop
systems to calculate and report risk-
based capital commensurate with those
plans
qualifying
community banking organization as a
result of a merger or acquisition would
not be able to use the grace period as of
the quarter in which the merger or
acquisition occurs. A banking
organization that plans to grow or
materially expand its activities due to a
merger or acquisition should develop
systems to calculate and report risk-
based capital commensurate with those
plans.
A qualifying community banking
organization that has elected to use the
CBLR framework and that expects to no
longer meet the qualifying criteria as a
result of a business combination
generally would be expected to provide
its pro forma risk-based capital ratios to
its appropriate regulator as part of its
merger application, if applicable, and
fully comply with risk-based capital
requirements for the regulatory
reporting period during which the
transaction is completed.
C. Additional Limitation Relating to
Usage of the Grace Period
The CBLR framework is an optional,
burden-reducing framework for
qualifying community banking
organizations. To ensure that the
proposed recalibration of the CBLR and
the extended grace period continue to
support prudent levels of capitalization,
the agencies are proposing a limitation
regarding the use of the grace period.
Specifically, although a qualifying
community banking organization may
use the grace period for up to four
quarters at a time, it would only be
allowed to use the grace period if it had
not used the grace period for more than
eight of the prior twenty quarters. If a
banking organization that has used the
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quarters at a time, it would only be
allowed to use the grace period if it had
not used the grace period for more than
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26 12 CFR 3.1(d) (OCC); 12 CFR 217.1(d) (Board);
12 CFR 324.1(d) (FDIC).
27 12 CFR 3.12(a)(4) (OCC); 12 CFR 3.303 (OCC);
12 CFR 217.12(a)(4) (Board); 12 CFR 217.304
(Board); 12 CFR 324.12(a)(4) (FDIC); 12 CFR
324.303 (FDIC).
28 Subject to a maximum of eight quarters within
any given five-year (20 quarter) period.
29 Not including nine insured branches of foreign
banks or eight noninsured depository institutions
that do not report regulatory capital. Of the 4,477
depository institutions, 4,421 have their deposits
insured by the FDIC.
grace period for eight of the previous 20
quarters subsequently ceases to meet the
definition of a qualifying community
banking organization, it must
immediately comply with the minimum
risk-based capital requirements and
report the required risk-based capital
ratios.
For example, if a community banking
organization were to use the grace
period for each of the eight quarters in
calendar year 2026 and calendar year
2028, without using the grace period in
calendar year 2027, it would not be able
to use the grace period during calendar
years 2029 or 2030. If it ceases meeting
the definition of a qualifying
community banking organization in the
second quarter of 2029, it would be
required to comply immediately with
the risk-based capital requirements
ht quarters in
calendar year 2026 and calendar year
2028, without using the grace period in
calendar year 2027, it would not be able
to use the grace period during calendar
years 2029 or 2030. If it ceases meeting
the definition of a qualifying
community banking organization in the
second quarter of 2029, it would be
required to comply immediately with
the risk-based capital requirements. If,
instead, the community banking
organization does not use the grace
period in calendar year 2029 or 2030,
but ceases meeting the definition of a
qualifying community banking
organization in the second quarter of
2031, it would be able to use the grace
period in that quarter because, in the
twenty quarters prior (the second
quarter of 2026 through first quarter of
2031), it would have used the grace
period for seven quarters (the second,
third and fourth quarters of 2026 and all
four quarters of 2028). This limitation
would help ensure that the proposed
longer grace period is not used to allow
a community banking organization with
a leverage ratio below the required level
to remain within the CBLR framework
for an extended period and would
encourage appropriate long-term capital
planning by community banking
organizations.
The agencies intend to monitor usage
of the grace period to determine
whether it is functioning as intended. If
unique or unusual circumstances
warrant a further extension of the grace
period, or if application of different
regulatory capital requirements becomes
necessary, the agencies continue to
reserve the authority to apply different
risk-based or leverage capital
requirements as appropriate and
commensurate with the relevant risks
and circumstances of a banking
organization.26
D
tended. If
unique or unusual circumstances
warrant a further extension of the grace
period, or if application of different
regulatory capital requirements becomes
necessary, the agencies continue to
reserve the authority to apply different
risk-based or leverage capital
requirements as appropriate and
commensurate with the relevant risks
and circumstances of a banking
organization.26
D. Removal of Temporary CARES Act
Provisions
The agencies are also proposing to
remove the provisions under the CBLR
framework that provided temporary
relief for qualifying community banking
organizations during the COVID–19
outbreak, including provisions required
by the CARES Act.27 Because this
temporary burden relief expired on
December 31, 2021, removal of these
provisions would have no substantive
impact.
IV. Request for Comment
The agencies invite commenters’
views on all aspects of the proposal,
including the proposed CBLR
calibration and grace period.
Question 1: What other factors should
the agencies consider in calibrating the
CBLR requirement and why?
Question 2: Under what facts and
circumstances might the appropriate
grace period for returning to compliance
with the CBLR qualifying criteria vary?
What alternative regulatory
requirements should the agencies
consider with respect to a community
banking organization that no longer
meets the definition of a qualifying
community banking organization and
why?
Question 3: What factors should the
agencies consider in determining
whether to impose limits on the number
of times during a fixed time horizon that
a community banking organization can
enter the grace period and remain in the
CBLR framework? What are the
advantages and disadvantages of the
proposed limitation to ensure that
community banking organizations
maintain appropriate levels of
capitalization while using the CBLR
framework, and what other options
should the agencies consider to achieve
this goal? For example, what are the
advantages and disadvantages of
n can
enter the grace period and remain in the
CBLR framework? What are the
advantages and disadvantages of the
proposed limitation to ensure that
community banking organizations
maintain appropriate levels of
capitalization while using the CBLR
framework, and what other options
should the agencies consider to achieve
this goal? For example, what are the
advantages and disadvantages of an
alternative limitation that would allow
for the proposed four quarter grace
period, but would temporarily (for
example, for 5 years) limit its
subsequent use to two quarters if a
qualifying community banking
organization were to fail to meet the
qualifying criteria due to a leverage ratio
of eight percent or less?
Question 4: What changes, if any, to
the numerator of the CBLR requirement
should the agencies consider? What are
the advantages and disadvantages of
requiring the numerator of the CBLR to
be predominantly common equity?
What would be the benefits and
drawbacks of using tangible GAAP
equity, excluding accumulated other
comprehensive income, as the
numerator of the CBLR?
V. Economic Analysis
This section outlines the expected
economic effects of the proposal,
including both its benefits and costs, on
community banking organizations. The
proposal would modify the CBLR
framework for qualifying community
banking organizations along two key
dimensions. First, it reduces the
calibration of the CBLR requirement,
from 9 percent to 8 percent. Second, a
qualifying community banking
organization that fails to meet the
qualifying criteria after opting into the
CBLR framework would have four
quarters, rather than two quarters,28 to
meet the qualifying criteria under the
CBLR framework or to comply with the
risk-based capital requirements
ions. First, it reduces the
calibration of the CBLR requirement,
from 9 percent to 8 percent. Second, a
qualifying community banking
organization that fails to meet the
qualifying criteria after opting into the
CBLR framework would have four
quarters, rather than two quarters,28 to
meet the qualifying criteria under the
CBLR framework or to comply with the
risk-based capital requirements. The
analysis compares outcomes under the
proposal to a baseline scenario in which
the current framework remains
unchanged; specifically, the baseline
assumes a 9 percent CBLR requirement
with a two-quarter grace period for
electing community banking
organizations.
The analysis is based on data from
recent Reports of Condition and Income
(Call Reports) for depository institutions
and Consolidated Financial Statements
for Holding Companies (FR Y–9C) data
for holding companies. Core statistics
are reported at the depository
institution, community bank holding
company, and community banking
organization levels, with the latter using
consolidated organization data
aggregated at the top-tier consolidated
organization level. While some
supporting analysis is conducted at
either the depository institution level or
the community banking organization
level, the agencies expect the
conclusions to be broadly applicable
across these entity types.
A. Baseline
According to Call Reports for the
quarter ending June 30, 2025, there are
4,477 depository institutions.29 Of
these, 4,240 meet the size and simplicity
thresholds for CBLR eligibility: total
consolidated assets of less than $10
billion, off-balance sheet exposures of
no more than 25 percent of total
consolidated assets, total trading assets
and trading liabilities of no more than
5 percent of total consolidated assets,
and are not an advanced approaches
banking organization.
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ance sheet exposures of
no more than 25 percent of total
consolidated assets, total trading assets
and trading liabilities of no more than
5 percent of total consolidated assets,
and are not an advanced approaches
banking organization.
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30 Depository institution holding companies with
less than $3 billion in total consolidated assets and
which meet certain additional criteria qualify for
the Board’s small bank holding company policy
statement and are not subject to the capital rule. See
12 CFR 217.1(c)(1)(ii) and (iii); 12 CFR part 225,
appendix C; 12 CFR 238.9.
31 An additional three depository institutions
have leverage ratios greater than 9 percent but do
not meet one of the qualifying criteria.
32 See section VI.A for a further analysis of
entities with less than $850 million in assets for the
Regulatory Flexibility Act (RFA).
According to FR Y–9C data for the
quarter ending June 30, 2025, there are
238 community bank holding
companies subject to the capital rule.30
Of these, 228 meet the size and
simplicity thresholds for CBLR
eligibility.
Taking a consolidated perspective,
these depository institutions and
holding companies together compose
4,101 unique community banking
organizations as of June 30, 2025. Of
these, 4,030 meet the size and simplicity
thresholds for CBLR eligibility.
1. Community Banking Organizations
and CBLR Framework Participation
Of the 4,240 depository institutions
that meet the size and simplicity
thresholds for CBLR eligibility, 3,641
report a leverage ratio greater than 9
percent and therefore meet all
requirements to qualify for the CBLR
framework. Of the 3,641 qualifying
depository institutions, 1,694 currently
participate in the CBLR framework
ommunity Banking Organizations
and CBLR Framework Participation
Of the 4,240 depository institutions
that meet the size and simplicity
thresholds for CBLR eligibility, 3,641
report a leverage ratio greater than 9
percent and therefore meet all
requirements to qualify for the CBLR
framework. Of the 3,641 qualifying
depository institutions, 1,694 currently
participate in the CBLR framework. That
is, 47 percent of eligible depository
institutions have adopted the CBLR
framework, and this participation rate
has remained relatively constant since
the CBLR framework was implemented
in 2020. Another 20 depository
institutions, although not presently
meeting the CBLR requirement, remain
in the framework under the current two
quarter grace period.31 Table 1 reports
counts of these depository institutions,
including a breakdown by discrete
leverage ratio:
TABLE 1—CURRENT COUNTS OF DEPOSITORY INSTITUTIONS, PARTITIONED BY LEVERAGE RATIOS
Range of leverage ratio
(percent) *
Total
≤ 7
7–8
8–9
9–10
10–11
11–12
> 12
Excess leverage ratio * * ....................................
≤ ¥2
¥2–¥1
¥1–0
0–1
1–2
2–3
> 3
....................
Depository institutions that meet CBLR size
and simplicity requirements * * * .....................
20
101
478
871
754
546
1,470
4,240
Participating depository institutions * * * * ...........
0
0
20
274
322
261
837
1,714
% Participating depository institutions ..............
0%
0%
4%
31%
43%
48%
57%
40%
Call Report Data, June 30, 2025.
* Each range excludes the lower end and includes the upper end.
* * ‘‘Excess leverage ratio’’ is equal to leverage ratio minus the CBLR requirement of 9 percent.
* * * * ‘‘Participating depository institutions’’ are those qualifying depository institutions that had elected to use the CBLR framework as of June 30, 2025
.......
0%
0%
4%
31%
43%
48%
57%
40%
Call Report Data, June 30, 2025.
* Each range excludes the lower end and includes the upper end.
* * ‘‘Excess leverage ratio’’ is equal to leverage ratio minus the CBLR requirement of 9 percent.
* * * * ‘‘Participating depository institutions’’ are those qualifying depository institutions that had elected to use the CBLR framework as of June 30, 2025.
* * * These counts include only depository institutions that meet the qualifying community banking organization criteria involving advanced approaches, total consoli-
dated assets, off-balance sheet exposures, and trading assets and liabilities.
As Table 1 shows, the fraction of
participating depository institutions
increases with the depository
institutions’ excess leverage ratio. This
tendency suggests that, by decreasing
the CBLR requirement to 8 percent, the
proposal could encourage some
currently eligible depository institutions
to opt into the framework.
Turning to community bank holding
companies, 165 report a leverage ratio
greater than 9 percent and therefore
meet all requirements to be considered
qualifying community banking
organizations. Of the 165 qualifying
community bank holding companies, 26
currently opt into the CBLR framework.
That is, 16 percent of community bank
holding companies are participating in
the CBLR framework.
Taking a consolidated perspective,
3,430 community banking organizations
meet all requirements to be considered
qualifying community banking
organizations. Of the 3,430 qualifying
community banking organizations,
1,659 currently opt in to the CBLR
framework. That is, 48 percent of
qualifying community banking
organizations participate in the CBLR
framework.
2. CBLR Framework Adoption Among
Small Community Banking
Organizations
The smallest community banking
organizations tend to opt into the CBLR
framework at the highest rates
anizations. Of the 3,430 qualifying
community banking organizations,
1,659 currently opt in to the CBLR
framework. That is, 48 percent of
qualifying community banking
organizations participate in the CBLR
framework.
2. CBLR Framework Adoption Among
Small Community Banking
Organizations
The smallest community banking
organizations tend to opt into the CBLR
framework at the highest rates. Fifty-two
percent of qualifying community
banking organizations with assets less
than $1 billion are participating in the
framework as of June 30, 2025,
compared to 26 percent of community
banking organizations with assets above
$1 billion. Of community banking
organizations with less than $500
million in assets, 56 percent are
currently participating in the
framework. Viewed another way, 89
percent of community banking
organizations that are currently
participating in the CBLR framework
have total assets of less than $1
billion.32
B. Effects of the Proposal
1. CBLR Framework Eligibility and
Adoption Under the Proposed
Calibration
As shown above in Table 1, 478
depository institutions have leverage
ratios between 8 and 9 percent while
meeting all other qualifying criteria for
the CBLR framework. Under the
proposal, these 478 depository
institutions would be eligible for the
CBLR framework, in addition to the
3,641 depository institutions that
currently qualify, which would
represent a 13 percent increase in the
population of eligible depository
institutions. As such, under the
proposal, more depository institutions
would become eligible for the CBLR
framework.
While the proposal would increase
the number of qualifying depository
institutions, historical experience
indicates that not all qualifying
depository institutions opt into the
CBLR framework
would
represent a 13 percent increase in the
population of eligible depository
institutions. As such, under the
proposal, more depository institutions
would become eligible for the CBLR
framework.
While the proposal would increase
the number of qualifying depository
institutions, historical experience
indicates that not all qualifying
depository institutions opt into the
CBLR framework. To provide a broad
estimate of the number of depository
institutions that could opt into the
framework under the proposal, the
agencies assume that the likelihood of
adoption depends primarily on a
depository institution’s buffer of tier 1
capital in excess of the CBLR
requirement. This assumption implies
that the relationship between adoption
rates and capital buffers will remain
consistent with that observed under the
baseline. Based on this approach, the
agencies estimate that 2,034 depository
institutions would adopt the CBLR
under the expanded scope, representing
an increase of 320 depository
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33 The estimate of 320 additional participating
depository institutions could be undercounted
because the benefits of the proposal, as later
discussed in this section, would make the CBLR
framework more attractive to depository institutions
and could result in greater adoption of the CBLR
framework among organizations that currently
qualify, but have not elected, to use the CBLR. On
the other hand, historical patterns show a smaller
change in adoption rate when the CBLR
requirement was temporarily lowered: when the
statutory interim final rule reduced the CBLR
requirement from 9 percent to 8 percent between
the first and second quarters of 2020, 131 additional
organizations elected to use the CBLR framework
currently
qualify, but have not elected, to use the CBLR. On
the other hand, historical patterns show a smaller
change in adoption rate when the CBLR
requirement was temporarily lowered: when the
statutory interim final rule reduced the CBLR
requirement from 9 percent to 8 percent between
the first and second quarters of 2020, 131 additional
organizations elected to use the CBLR framework.
Later on, there was a decrease of 245 electing
organizations between the fourth quarter of 2020
(the last quarter for which the CBLR requirement
was 8 percent) and the first quarter of 2022 (the first
quarter for which the CBLR requirement reverted to
9 percent). Confounding factors such as the COVID–
19 pandemic, the initial rollout of CBLR, and the
temporary nature of the decrease make this
comparison difficult.
34 For the consolidated organization analysis,
CBLR participation and eligibility are assessed at
the highest tier entity in a banking organization. In
cases where multiple depository institutions belong
to the same organization, and one that does not
have a top-tier community bank holding company
subject to the capital rule, CBLR eligibility for the
consolidated organization is defined based on the
total assets of these depository institutions. If
eligible depository institutions account for at least
50 percent of the consolidated organizations’ assets,
the community banking organization is considered
to be CBLR eligible. The consolidated community
banking organization in these instances is
considered to be a CBLR organization if at least one
of its depository institutions participate in the
CBLR framework.
35 The PCA framework applies only to insured
depository institutions. The definitions of well
capitalized for bank holding companies and savings
and loan holding companies can be found at 12 CFR
225.2(r) and 12 CFR 238.2(s), respectively
organization in these instances is
considered to be a CBLR organization if at least one
of its depository institutions participate in the
CBLR framework.
35 The PCA framework applies only to insured
depository institutions. The definitions of well
capitalized for bank holding companies and savings
and loan holding companies can be found at 12 CFR
225.2(r) and 12 CFR 238.2(s), respectively.
36 According to agency estimates published in
January 2020, per-response Paperwork Reduction
Act (PRA) burden hours for preparing Call Reports,
which is only one component of risk-based capital
compliance costs, would decrease by approximately
3.5 hours between 2019 and 2020, with the change
in burden ‘‘predominantly due to changes
associated with the community bank leverage ratio
final rule.’’ See 85 FR 4780 at 4782. This estimated
change in PRA burden also includes various other
changes to the Call Reports that were implemented
in the first quarter of 2020 and assumed a 60
percent CBLR adoption rate.
37 These cost savings could be partially offset by
one-time costs of adoption incurred by electing
banking organizations.
38 The agencies’ analysis of the CBLR grace period
uses data starting in 2022, when the CBLR
requirement was returned to 9 percent under the
transition interim final rule. The agencies’ analysis
only includes depository institutions that entered
the grace period by the fourth quarter of 2024,
because that is the last date for which the agencies
have two subsequent quarters of Call Report data,
which are necessary to determine whether the DIs
regained eligibility within the two-quarter grace
period. Some depository institutions experienced
multiple instances of entering the grace period; the
agencies find 261 such instances between the
second quarter of 2022 and the fourth quarter of
2024, involving 210 distinct depository institutions
two subsequent quarters of Call Report data,
which are necessary to determine whether the DIs
regained eligibility within the two-quarter grace
period. Some depository institutions experienced
multiple instances of entering the grace period; the
agencies find 261 such instances between the
second quarter of 2022 and the fourth quarter of
2024, involving 210 distinct depository institutions.
As eligibility for the grace period applies at the
individual institution level, the analysis focuses on
depository institutions, without taking into account
consolidation among institutions with joint
ownership.
39 Of the 210 grace period depository institutions:
78 depository institutions had at least one instance
in which they entered the grace period and
subsequently did not regain CBLR eligibility within
the grace period (including the 28 that did not
regain eligibility within two quarters but did within
four quarters); 13 depository institutions regained
CBLR eligibility in all the instances where they
entered the grace period but still chose to leave the
CBLR framework in at least one of the instances;
and 119 depository institutions regained CBLR
eligibility within the two-quarter grace period and
continued within the CBLR framework (in all the
instances where they entered the grace period).
Continued
institutions relative to the current rule.
See Appendix for details. This estimate
is imprecise because it is based on a
simple model, which does not take into
account the potential impact of the
grace period extension on CBLR
adoption.33
For community bank holding
companies, 46 have leverage ratios
between 8 and 9 percent while meeting
all other criteria for the CBLR
framework, which would represent a 28
percent increase in the population of
eligible community bank holding
companies relative to the 165 that
currently qualify
es not take into
account the potential impact of the
grace period extension on CBLR
adoption.33
For community bank holding
companies, 46 have leverage ratios
between 8 and 9 percent while meeting
all other criteria for the CBLR
framework, which would represent a 28
percent increase in the population of
eligible community bank holding
companies relative to the 165 that
currently qualify.
Considering the depository
institutions and holding companies
together from a consolidated
perspective, 475 community banking
organizations have leverage ratios
between 8 and 9 percent while meeting
all other qualifying criteria, which
would represent a 14 percent increase in
the population of eligible community
banking organizations relative to the
3,430 community banking organizations
that currently qualify.34
The agencies assess the stringency of
the CBLR framework by comparing the
8 percent risk-based tier 1 capital
requirement to be considered well-
capitalized under the PCA framework
directly with the CBLR requirement for
community banking organizations that
are not participating in the CBLR
framework and would be eligible under
the proposal.35 The proposed 8 percent
CBLR requirement is less stringent than
the tier 1 risk-based capital requirement
for two currently eligible banking
organizations that are not participating
in the framework. No newly eligible
community banking organizations
would face a less stringent tier 1 capital
requirement under the proposed CBLR
requirement.
C. Expected Benefits of the Proposal
The agencies identify two main
benefits for the proposed changes to the
CBLR framework. First, by expanding
eligibility and extending the grace
period, the proposal would enable more
community banking organizations to
benefit from the regulatory cost savings
provided by the CBLR framework
ier 1 capital
requirement under the proposed CBLR
requirement.
C. Expected Benefits of the Proposal
The agencies identify two main
benefits for the proposed changes to the
CBLR framework. First, by expanding
eligibility and extending the grace
period, the proposal would enable more
community banking organizations to
benefit from the regulatory cost savings
provided by the CBLR framework.
Second, the reduced CBLR requirement
would provide community banking
organizations that are currently
participating in the CBLR framework
with the capacity to expand their
balance sheets, which could lead to
increased lending to the communities
served by these banking organizations.
1. Regulatory Cost Savings
All participating community banking
organizations under the proposal would
benefit by avoiding the costs associated
with gathering, recording, and reporting
various risk-based capital measures.
While the agencies do not have
sufficient information to quantify all
aspects of these savings,36 participating
community banking organizations that
operate internal recordkeeping systems
to comply with risk-based capital
regulations may discontinue or simplify
these systems. Other participating
community banking organizations that
rely on third party vendors to operate
the relevant compliance systems could
experience reductions in outsourcing
costs.37
Some participating community
banking organizations currently
maintain parallel record keeping
systems to comply with both the CBLR
framework and the risk-based capital
requirements to minimize the cost of
falling out of compliance with the CBLR
framework. The proposal would reduce
the risk of falling out of compliance by
providing additional time to adjust
systems in the event that a community
banking organization no longer meets
the qualifying criteria. As such, the
proposal could enable some
participating community banking
organizations to decide to discontinue
these systems and realize meaningful
cost savings
with the CBLR
framework. The proposal would reduce
the risk of falling out of compliance by
providing additional time to adjust
systems in the event that a community
banking organization no longer meets
the qualifying criteria. As such, the
proposal could enable some
participating community banking
organizations to decide to discontinue
these systems and realize meaningful
cost savings.
The proposed extension of the CBLR
grace period would provide benefits to
community banking organizations
participating in the framework who
enter the grace period due to a drop in
their leverage ratios or a failure to meet
any of the other qualifying criteria and
which are capable of meeting the
criteria within a four-quarter period but
not a two-quarter period. Between the
second quarter of 2022 and fourth
quarter of 2024, 210 participating
depository institutions have entered
grace periods for one or more quarters.38
Within these two years, there were 28
depository institutions that were
required to leave the CBLR framework at
least once because they did not regain
CBLR eligibility within two quarters,
and subsequently regained CBLR
eligibility within four quarters.39 Thus,
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Three depository institutions entered the grace
period between the second quarter of 2022 and the
fourth quarter of 2024, but ceased reporting Call
Reports at some point in this time period and were
not included in the previously listed population
counts.
40 For perspective from the academic literature on
the relationship between bank capital requirements
and lending, see, among others: J. S. Me´sonnier, and
A. Monk, Heightened bank capital requirements
and bank credit in a crisis: the case of the 2011 EBA
Capital Exercise in the euro area, Rue de la Banque,
this time period and were
not included in the previously listed population
counts.
40 For perspective from the academic literature on
the relationship between bank capital requirements
and lending, see, among others: J. S. Me´sonnier, and
A. Monk, Heightened bank capital requirements
and bank credit in a crisis: the case of the 2011 EBA
Capital Exercise in the euro area, Rue de la Banque,
(08) (2015); M. Behn, R. Haselmann, and P.
Wachtel, Procyclical capital regulation and lending,
The Journal of Finance, 71(2) (2016); C. Mendicino,
K. Nikolov, J. Suarez, and D. Supera, Bank capital
in the short and in the long run, Journal of
Monetary Economics, 115 (2020); S. Firestone, A.
Lorenc, and B. Ranish, An empirical economic
assessment of the costs and benefits of bank capital
in the United States, SSRN 349416 (2019); D.
Corbae, and P. D’Erasmo, Capital buffers in a
quantitative model of banking industry dynamics,
Econometrica, 89(6) (2021); V. Elenev, T. Landvoigt,
and S. Van Nieuwerburgh, A macroeconomic model
with financially constrained producers and
intermediaries, Econometrica, 89(3) (2021).
41 Section V.D discusses the agencies’ experience
with temporary changes in the CBLR requirement.
42 As reported on schedule RC–C of the Call
Report.
43 The agencies obtain a 95 percent confidence
interval of 5.3 to 7.8 percent across approximately
2,100 electing banking organizations between the
first quarter of 2020 and the second quarter of 2025.
44 The average year-over-year changes ending four
quarters prior, one quarter prior, and one quarter
after CBLR election were 1.3 percent,¥0.2 percent,
and¥0.2 percent, respectively. Only the first of
these three measures were statistically different
from zero.
45 See Liu, Ruinan, 2025, ‘‘Leverage Without Risk
Weights: A Double-Edged Sword for Community
Banks,’’ Working paper; and Lu, George, 2024, ‘‘The
Effect of Capital Modification on Community
Banking: Evidence from the Community Bank
Leverage Ratio Framework,’’ Working paper
ercent,
and¥0.2 percent, respectively. Only the first of
these three measures were statistically different
from zero.
45 See Liu, Ruinan, 2025, ‘‘Leverage Without Risk
Weights: A Double-Edged Sword for Community
Banks,’’ Working paper; and Lu, George, 2024, ‘‘The
Effect of Capital Modification on Community
Banking: Evidence from the Community Bank
Leverage Ratio Framework,’’ Working paper.
if the grace period had been four
quarters, these 28 depository
institutions would have been able to
remain in the CBLR framework and
avoid any costs incurred by returning to
the risk-based capital framework. This
suggests that there is a similar
population of depository institutions
that would benefit from the proposed
extension of the grace period.
An increase in CBLR framework
adoption is expected to especially
benefit the smaller banking
organizations that participate by
reducing their costs of compliance with
the risk-based capital framework. Such
fixed costs can have greater salience for
smaller banking organizations. This
benefit is consistent with the finding in
section V.A.2 that a greater fraction of
smaller banking organizations
participate in the CBLR framework.
2. Increased Balance Sheet Capacity To
Support Lending
The agencies examine how the
proposed calibration could expand the
balance sheet capacity of community
banking organizations that currently
participate in the CBLR framework
using a two-step process. First, the
agencies estimate the potential
reduction in community banking
organizations’ tier 1 leverage ratios due
to the proposed change in the CBLR
requirement from 9 percent to 8 percent.
The analysis assumes that community
banking organizations participating in
the CBLR framework could reduce their
tier 1 leverage ratios by the proposed
change of 1 percentage point of average
consolidated assets, except for those
community banking organizations with
a leverage ratio less than 10 percent
atios due
to the proposed change in the CBLR
requirement from 9 percent to 8 percent.
The analysis assumes that community
banking organizations participating in
the CBLR framework could reduce their
tier 1 leverage ratios by the proposed
change of 1 percentage point of average
consolidated assets, except for those
community banking organizations with
a leverage ratio less than 10 percent.
The latter are assumed to reduce their
tier 1 leverage ratio to 9 percent (that is,
maintain an excess leverage ratio of 1
percentage point).
In the second step, the analysis
computes the growth in each
participating community banking
organization’s total consolidated assets
that would reduce its tier 1 leverage
ratio to the ratio derived in step one,
while holding tier 1 capital fixed. The
estimated asset growth rate is then
multiplied by the community banking
organization’s average consolidated
assets to obtain its expanded asset base
under the proposal, with the provision
that community banking organizations
do not grow above $10 billion in total
assets.
The agencies estimate that the
reduced CBLR requirement under the
proposal could provide currently
participating community banking
organizations with the capacity to
expand their balance sheets by $64
billion in aggregate. This would
represent an 8.1 percent expansion of
participating community banking
organizations’ assets or a 1.8 percent
expansion relative to the total assets of
all community banking organizations
reduced CBLR requirement under the
proposal could provide currently
participating community banking
organizations with the capacity to
expand their balance sheets by $64
billion in aggregate. This would
represent an 8.1 percent expansion of
participating community banking
organizations’ assets or a 1.8 percent
expansion relative to the total assets of
all community banking organizations.
This increase in balance sheet capacity
could facilitate additional lending by
community banking organizations
participating in the CBLR framework
and support the economic activity of the
communities they serve.40 However,
community banking organizations may
not utilize this capacity in full and the
agencies acknowledge uncertainty
regarding the extent to which such an
increase in lending by these banking
organizations would occur.41
Many newly eligible community
banking organizations that opt into the
CBLR framework could also increase
their lending relative to total assets.
Historical evidence provides support:
between 2020 and 2025, participating
depository institutions increased the
fraction of loans and leases 42 in their
total assets by about 6.5 percent, on
average, in the year after adopting the
CBLR framework.43 This average
increase only occurs after adoption of
the CBLR framework—it is not present
in analogous year-over-year differences
ending four quarters prior, one quarter
prior, or one quarter after the election,44
which suggests that the proposed rule
could result in an increase in lending by
newly eligible community banking
organizations that opt into the CBLR
framework.
In summary, the expected benefits of
the proposal accrue to both community
banking organizations participating
under the current requirements and to
community banking organizations that
would adopt the framework under the
proposed requirements
that the proposed rule
could result in an increase in lending by
newly eligible community banking
organizations that opt into the CBLR
framework.
In summary, the expected benefits of
the proposal accrue to both community
banking organizations participating
under the current requirements and to
community banking organizations that
would adopt the framework under the
proposed requirements. Although the
agencies cannot precisely quantify these
benefits, the fact that fewer than half of
qualifying community banking
organizations currently opt into the
CBLR framework suggests that the
potential benefits could be material.
D. Expected Costs of the Proposal
The proposal would broadly maintain
the current standard for designating
community banking organizations as
well capitalized. It may, however,
impose costs on banking organizations
and the banking industry in that it could
encourage community banking
organizations currently participating in
the CBLR framework to operate with
lower capital ratios or newly eligible
community banking organizations that
opt into the CBLR framework to take on
riskier loans. For example, the increase
in balance sheet capacity presented
above in section V.C.2 assumes banking
organizations currently participating in
the CBLR framework would grow their
balance sheets while maintaining the
amount of capital fixed. While such
changes may increase the risk of bank
failure, these costs are expected to be
modest.
The evidence on potential balance
sheet adjustments is mixed. Some
studies evaluating the initial creation of
the CBLR framework suggest that
participating community banking
organizations increased their share of
relatively higher-yielding assets,
including unsecured loans, and
experienced modest increases in non-
performing loans, charge-offs, or
subordinate mortgage exposures.45
However, the extent of these changes
appears heterogeneous across
organizations and the overall effect on
risk-taking seems muted
work suggest that
participating community banking
organizations increased their share of
relatively higher-yielding assets,
including unsecured loans, and
experienced modest increases in non-
performing loans, charge-offs, or
subordinate mortgage exposures.45
However, the extent of these changes
appears heterogeneous across
organizations and the overall effect on
risk-taking seems muted. This also
suggests that, while the proposal may
result in changes to the composition, in
addition to the level, of bank lending,
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46 Call Report Data for the quarters ending
December 2020 and 2022. During the same period,
the leverage ratios for qualifying community
banking organizations that did not elect to use the
CBLR framework decreased a similar amount: from
11.13 percent of 11.08 percent.
47 In addition, 4 depository institutions are
projected to be in the grace period.
the compositional shift would likely be
minimal.
In addition, the agencies could not
find evidence that previous temporary
changes in the CBLR requirement
substantially affected the amount of tier
1 capital maintained by depository
institutions: between the fourth quarter
of 2020, when the CBLR requirement
was above 8 percent, and the fourth
quarter of 2022, when the CBLR
requirement was above 9 percent, the
aggregate leverage ratio for a balanced
panel of 1,172 electing depository
institutions decreased by 4 basis points,
from 12.37 to 12.33, suggesting that the
aggregate tier 1 capital at electing
depository institutions did not react in
aggregate to the increase in the CBLR
requirement.46 The agencies
acknowledge this observation is over a
relatively short period of time and likely
inconclusive
ate leverage ratio for a balanced
panel of 1,172 electing depository
institutions decreased by 4 basis points,
from 12.37 to 12.33, suggesting that the
aggregate tier 1 capital at electing
depository institutions did not react in
aggregate to the increase in the CBLR
requirement.46 The agencies
acknowledge this observation is over a
relatively short period of time and likely
inconclusive. Moreover, depository
institutions participating in the CBLR
framework currently maintain high
levels of tier 1 capital, with a median
excess capital of 2.9 percent of average
total consolidated assets.
The proposed extension of the grace
period from two quarters to four
quarters could entail additional costs if
community banking organizations
approaching the CBLR requirement
delay timely capital adjustments. A
longer grace period may allow some
community banking organizations to
operate temporarily below the CBLR
requirement while remaining in the
CBLR framework, potentially increasing
supervisory monitoring needs. However,
the additional grace period limitation (a
qualifying community banking
organization would only be allowed to
use the grace period for up to four
quarters at a time if it had not used the
grace period for more than eight of the
prior twenty quarters) is expected to
mitigate these potential costs. In
addition, the proposed extension could
produce regulatory cost savings for
community banking organizations by
limiting unnecessary exits and re-entries
into the framework due to short-term
fluctuations in their leverage ratios.
Overall, the agencies anticipate that
the benefits of the proposal justify the
costs.
Question 5: The agencies invite
comments on all aspects of the
economic analysis provided in this
supplemental information. What, if any,
additional significant benefits or costs
should the agencies consider and why?
E. Reasonable Alternatives
The agencies considered several
alternatives to the proposal that could
meet the objectives of this rulemaking
of the proposal justify the
costs.
Question 5: The agencies invite
comments on all aspects of the
economic analysis provided in this
supplemental information. What, if any,
additional significant benefits or costs
should the agencies consider and why?
E. Reasonable Alternatives
The agencies considered several
alternatives to the proposal that could
meet the objectives of this rulemaking.
For the reasons described, the agencies
view the proposal as the most
appropriate and effective means of
achieving the policy objectives
described in section III.
The agencies considered not
promulgating any regulatory action to
amend the CBLR framework. However,
as previously discussed, the CBLR
framework has a low adoption rate. As
discussed above, the proposed rule
would provide clear cost savings and
other benefits, over this no-action
alternative.
The agencies also considered
lowering the CBLR requirement to above
8 percent but keeping the grace period
to two quarters. This alternative would
provide some relief to community
banking organizations; however, as
described above, the proposed extension
of the grace period would provide
substantial regulatory relief that meets
the objectives of the EGRRCPA and the
stated objectives of the proposal without
entailing significant costs.
The agencies invite comments on
possible alternatives to the proposal.
Appendix: CBLR-Election Projection
Table 2 calculates the fraction of
depository institutions that adopt the
CBLR framework by groups of tier 1
capital buffers split in 1 percentage
point increments. For example, 31
percent of depository institutions with
an excess leverage ratio between 0 and
1 percent of average total consolidated
assets adopted the CBLR framework as
of June 30, 2025. Assuming that these
observed adoption rates remain
unchanged for each group of capital
buffer under the proposed calibration,
the agencies estimate the number of
depository institutions that will join the
framework
percent of depository institutions with
an excess leverage ratio between 0 and
1 percent of average total consolidated
assets adopted the CBLR framework as
of June 30, 2025. Assuming that these
observed adoption rates remain
unchanged for each group of capital
buffer under the proposed calibration,
the agencies estimate the number of
depository institutions that will join the
framework.
The agencies estimate that 2,034
depository institutions could adopt the
CBLR framework under the proposed
calibration, representing an increase of
320 depository institutions relative to
the current rule. Under this projection,
130 of the newly electing depository
institutions have a leverage ratio
between 8 and 9 percent and would be
newly eligible, while 186 depository
institutions are currently eligible and
would decide to join under the new
calibration.47
TABLE 2—ESTIMATED COUNTS OF ELECTING DEPOSITORY INSTITUTIONS UNDER THE PROPOSAL, PARTITIONED BY
LEVERAGE RATIOS
Range of leverage ratio
(percent) *
Total
≤7
7–8
8–9
9–10
10–11
11–12
>12
Excess leverage ratio ** ....................................
≤¥1
¥1–0
0–1
1–2
2–3
3–4
>4
....................
Depository institutions that meet CBLR size
and simplicity requirements *** ......................
20
101
478
871
754
546
1,470
4,240
% Electing depository institutions (pro-
posed) *** .......................................................
0%
4%
31%
43%
48%
57%
57%
....................
# Electing depository institutions (proposed) ***
0
4
150
372
360
311
837
2,034
# Electing depository institutions (current) *** ...
0
0
20
274
322
261
837
1,714
D Electing depository institutions (pro-
posed¥current) *** ........................................
0
4
130
98
38
50
0
320
Call Report Data, June 30, 2025.
* Each range excludes the lower end and includes the upper end.
** ‘‘Excess leverage ratio’’ is equal to leverage ratio minus the CBLR requirement of 8 percent
itory institutions (current) *** ...
0
0
20
274
322
261
837
1,714
D Electing depository institutions (pro-
posed¥current) *** ........................................
0
4
130
98
38
50
0
320
Call Report Data, June 30, 2025.
* Each range excludes the lower end and includes the upper end.
** ‘‘Excess leverage ratio’’ is equal to leverage ratio minus the CBLR requirement of 8 percent. ‘‘% Electing depository institutions (proposed)’’ is the estimated per-
cent of those that would choose to elect into the CBLR. ‘‘# Electing depository institutions (proposed)’’ equals the product of the number of all depository institutions
that meet CBLR size and simplicity requirements and ‘‘% Electing depository institutions (proposed).’’ ‘‘D Electing depository institutions (proposed¥current)’’ is the
difference between ‘‘# Electing depository institutions (proposed)’’ and the current number of electing depository institutions (‘‘# Electing banks (current)’’).
*** These counts include only depository institutions that meet the qualifying community banking organization criteria involving advanced approaches, total consoli-
dated assets, off-balance sheet exposures, and total trading assets and liabilities.
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48 See, ‘‘A Guide for Government Agencies; How
to Comply with the Regulatory Flexibility Act,’’ (pp.
18–20), available at: https://advocacy.sba.gov/wp-
content/uploads/2019/07/How-to-Comply-with-the-
RFA-WEB.pdf.
49 The OCC based its estimate of the number of
small entities on the Small Business
Administration’s size thresholds for commercial
banks and savings institutions (NAICS Code:
522110), and trust companies (NAICS Code:
523991), which are $850 million and $47 million,
respectively
18–20), available at: https://advocacy.sba.gov/wp-
content/uploads/2019/07/How-to-Comply-with-the-
RFA-WEB.pdf.
49 The OCC based its estimate of the number of
small entities on the Small Business
Administration’s size thresholds for commercial
banks and savings institutions (NAICS Code:
522110), and trust companies (NAICS Code:
523991), which are $850 million and $47 million,
respectively. Consistent with the General Principles
of Affiliation 13 CFR 121.103(a), the OCC counted
the assets of affiliated financial institutions when
determining whether to classify an OCC-supervised
institution as a small entity. The OCC used
December 31, 2024, to determine size because a
‘‘financial institution’s assets are determined by
averaging the assets reported on its four quarterly
financial statements for the preceding year.’’ See,
footnote 8 of the U.S. Small Business
Administration’s Table of Size Requirements.
50 The OCC included all OCC-supervised small
entities that qualify for the CBLR framework in the
proposal. Not all qualifying national banks and
federal savings associations will choose to adopt the
CBLR framework, but all qualifying national banks
and federal savings associations will have the
option.
51 Call report schedule RI, Item 7.a., Salaries and
employee benefits.
52 Call report schedule RI, Item 7.e., Total
noninterest expense.
53 5 U.S.C. 601 et seq.
54 Under regulations issued by the U.S. Small
Business Administration (SBA), a small entity
includes a depository institution, bank holding
company, or savings and loan holding company
with total assets of $850 million or less. See 13 CFR
121.201. Consistent with the SBA’s General
Principles of Affiliation, the Board includes the
assets of all domestic and foreign affiliates toward
the applicable size threshold when determining
whether to classify a particular entity as a small
entity. See 13 CFR 121.103
titution, bank holding
company, or savings and loan holding company
with total assets of $850 million or less. See 13 CFR
121.201. Consistent with the SBA’s General
Principles of Affiliation, the Board includes the
assets of all domestic and foreign affiliates toward
the applicable size threshold when determining
whether to classify a particular entity as a small
entity. See 13 CFR 121.103. As of the second
quarter of 2025, there were approximately 2,796
small bank holding companies and approximately
157 small savings and loan holding companies, and
approximately 443 small state member banks.
55 5 U.S.C. 603(b)–(c).
VI. Regulatory Analysis
A. Paperwork Reduction Act
This notice of proposed rulemaking
has been reviewed for compliance with
the Paperwork Reduction Act of 1995
(PRA) (44 U.S.C. 3501 et seq.). In
accordance with the PRA, the agencies
may not conduct or sponsor, and a
respondent is not required to respond
to, an information collection unless the
information collection displays a
currently valid Office of Management
and Budget (OMB) control number. The
agencies have reviewed the notice of
proposed rulemaking and determined
that it would not introduce any new
collection of information pursuant to
the PRA. Therefore, no submission will
be made to OMB for review.
The proposal, however, may
necessitate clarification of the
instructions to the Financial Statements
for Holding Companies (FR Y–9; OMB
No. 7100–0128). In such event, the
Board would address such clarifications
separately. This proposal may also
necessitate clarification of the
instructions to reporting for depository
institutions. The agencies, under the
auspices of the Federal Financial
Institutions Examination Council
(FFIEC), may separately address such
clarifications to the instructions to the
Consolidated Reports of Condition and
Income (Call Report) (FFIEC 031, FFIEC
041, and FFIEC 051; OMB Nos. 1557–
0081; 3064–0052, and 7100–0036).
B
rification of the
instructions to reporting for depository
institutions. The agencies, under the
auspices of the Federal Financial
Institutions Examination Council
(FFIEC), may separately address such
clarifications to the instructions to the
Consolidated Reports of Condition and
Income (Call Report) (FFIEC 031, FFIEC
041, and FFIEC 051; OMB Nos. 1557–
0081; 3064–0052, and 7100–0036).
B. Regulatory Flexibility Act
OCC
The Regulatory Flexibility Act (RFA),
5 U.S.C. 601 et seq., requires an agency,
in connection with a proposed rule, to
prepare an Initial Regulatory Flexibility
Analysis describing the impact of the
rule on small entities (defined by the
Small Business Administration (SBA)
for purposes of the RFA to include
commercial banks and savings
institutions with total assets of $850
million or less and trust companies with
total assets of $47 million or less) or to
certify that the proposed rule would not
have a significant economic impact on
a substantial number of small entities.
To measure whether a rule would
impact a ‘‘substantial number of small
entities’’ the OCC focused on the
potential costs of the rule on OCC-
supervised small entities, consistent
with guidance on the RFA published by
the Office of Advocacy of the Small
Business Administration.48 As of
December 31, 2024, the OCC supervised
approximately 609 small entities, of
which 579 will be impacted by the
proposal.49 50 Thus, a substantial
number of small entities will be
impacted by the proposed rule.
The OCC also considered whether the
proposed rule would result in a
significant economic impact on affected
small entities. The total impact
associated with the proposal is the
estimated annual tax benefit or cost
vised
approximately 609 small entities, of
which 579 will be impacted by the
proposal.49 50 Thus, a substantial
number of small entities will be
impacted by the proposed rule.
The OCC also considered whether the
proposed rule would result in a
significant economic impact on affected
small entities. The total impact
associated with the proposal is the
estimated annual tax benefit or cost. In
general, the OCC classifies the economic
impact of expected cost (to comply with
a rule) on an individual bank as
significant if the total estimated
monetized costs in one year are greater
than (1) 5 percent of the bank’s total
annual salaries and benefits 51 or (2) 2.5
percent of the bank’s total annual non-
interest expense.52 Based on the above
criteria, the estimated cost of the rule
could impose a significant economic
impact at 2 of the 579 small entities if
they elected to opt into the CBLR
framework. The OCC uses 5 percent to
determine a substantial number, and
less than 1 percent (2/609=.33%) of
small entities could be significantly
impacted by the rule. Furthermore, the
CBLR framework is voluntary, and small
national banks and federal savings
associations can choose to remain in the
current risk-based capital framework.
Thus, the OCC concludes that the
proposal would not have a significant
economic impact on a substantial
number of OCC-supervised small
entities.
Board
The Board is providing an initial
regulatory flexibility analysis with
respect to this proposed rule
s voluntary, and small
national banks and federal savings
associations can choose to remain in the
current risk-based capital framework.
Thus, the OCC concludes that the
proposal would not have a significant
economic impact on a substantial
number of OCC-supervised small
entities.
Board
The Board is providing an initial
regulatory flexibility analysis with
respect to this proposed rule. The
Regulatory Flexibility Act 53 (RFA)
requires an agency to consider whether
the rules it proposes will have a
significant economic impact on a
substantial number of small entities.54
In connection with a proposed rule, the
RFA requires an agency to prepare and
invite public comment on an initial
regulatory flexibility analysis describing
the impact of the rule on small entities,
unless the agency certifies that the
proposed rule, if promulgated, would
not have a significant economic impact
on a substantial number of small
entities. An initial regulatory flexibility
analysis must contain: (1) a description
of the reasons why action by the agency
is being considered; (2) a succinct
statement of the objectives of, and legal
basis for, the proposed rule; (3) a
description of, and, where feasible, an
estimate of the number of small entities
to which the proposed rule will apply;
(4) a description of the projected
reporting, recordkeeping, and other
compliance requirements of the
proposed rule, including an estimate of
the classes of small entities that will be
subject to the requirement and the type
of professional skills necessary for
preparation of the report or record; (5)
an identification, to the extent
practicable, of all relevant Federal rules
which may duplicate, overlap with, or
conflict with the proposed rule; and (6)
a description of any significant
alternatives to the proposed rule which
accomplish its stated objectives and
minimize any significant economic
impact of the proposed rule on small
entities.55
The Board has considered the
potential impact of the proposed
the extent
practicable, of all relevant Federal rules
which may duplicate, overlap with, or
conflict with the proposed rule; and (6)
a description of any significant
alternatives to the proposed rule which
accomplish its stated objectives and
minimize any significant economic
impact of the proposed rule on small
entities.55
The Board has considered the
potential impact of the proposed rule on
small entities in accordance with the
RFA. Based on its analysis and for the
reasons stated below, the Board believes
that this proposed rule will not have a
significant economic impact on a
substantial number of small entities.
Nevertheless, the Board is publishing
and inviting comment on this initial
regulatory flexibility analysis.
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56 12 U.S.C. 3901–3911.
57 12 U.S.C. 1831o.
58 12 U.S.C. 3907(a)(1).
59 12 U.S.C. 1831o(c)(2).
60 See 12 U.S.C. 1467a, 1844, 5365, 5371.
61 5 U.S.C. 601 et seq.
62 The SBA defines a small banking organization
as having $850 million or less in assets, where an
organization’s ‘‘assets are determined by averaging
the assets reported on its four quarterly financial
statements for the preceding year.’’ See 13 CFR
121.201 (as amended by 87 FR 69118, effective
December 19, 2022). In its determination, the ‘‘SBA
counts the receipts, employees, or other measure of
size of the concern whose size is at issue and all
of its domestic and foreign affiliates.’’ See 13 CFR
121.103. Following these regulations, the FDIC uses
an insured depository institution’s affiliated and
acquired assets, averaged over the preceding four
quarters, to determine whether the insured
depository institution is ‘‘small’’ for the purposes of
RFA
, employees, or other measure of
size of the concern whose size is at issue and all
of its domestic and foreign affiliates.’’ See 13 CFR
121.103. Following these regulations, the FDIC uses
an insured depository institution’s affiliated and
acquired assets, averaged over the preceding four
quarters, to determine whether the insured
depository institution is ‘‘small’’ for the purposes of
RFA.
As discussed in detail above, the
proposed rule would amend the
community bank leverage ratio
framework. The community bank
leverage ratio framework is available on
an elective basis to qualifying
community banking organizations,
which consist of insured depository
institutions, bank holding companies,
and savings and loan holding
companies with total consolidated
assets of less than $10 billion that also
satisfy certain qualifying criteria. The
proposed rule would lower the
community bank leverage ratio
requirement for these organizations
from greater than 9 percent to greater
than 8 percent, consistent with the
lower bound provided in section 201 of
the Economic Growth, Regulatory
Relief, and Consumer Protection Act.
The proposal would also extend the
length of time that a qualifying
community banking organization can
remain in the community bank leverage
ratio framework while being below the
community bank leverage ratio
requirement from two quarters to four
quarters subject to a limit of eight
quarters in any five-year period. The
proposed changes would increase the
number of qualifying community
banking organizations eligible to elect,
and to continue, to use the framework.
The Board has broad authority under
the International Lending Supervision
Act of 1983 (ILSA) 56 and the Prompt
Corrective Action (PCA) provisions of
the Federal Deposit Insurance Act 57 to
establish regulatory capital
requirements for the institutions it
regulates
increase the
number of qualifying community
banking organizations eligible to elect,
and to continue, to use the framework.
The Board has broad authority under
the International Lending Supervision
Act of 1983 (ILSA) 56 and the Prompt
Corrective Action (PCA) provisions of
the Federal Deposit Insurance Act 57 to
establish regulatory capital
requirements for the institutions it
regulates. For example, ILSA directs
each Federal banking agency to cause
banking institutions to achieve and
maintain adequate capital by
establishing minimum capital
requirements as well as by other means
that the agency deems appropriate.58
The PCA provisions of the Federal
Deposit Insurance Act direct each
Federal banking agency to specify, for
each relevant capital measure, the level
at which an IDI subsidiary is well
capitalized, adequately capitalized,
undercapitalized, and significantly
undercapitalized.59 In addition, the
Board has broad authority to establish
regulatory capital standards for bank
holding companies, savings and loan
holding companies, and U.S.
intermediate holding companies of
foreign banking organizations under the
Bank Holding Company Act, the Home
Owners’ Loan Act, and the Dodd-Frank
Act.60
The proposed rule amends an
optional framework that qualifying
community banking organizations could
choose to apply instead of the Board’s
current capital rule. A qualifying
community banking organization would
be able to remain subject to the capital
rule if it chose to do so. The proposed
rule would increase the number of
qualifying community banking
organizations eligible to elect to use the
framework. The proposed rule,
therefore, would not impose mandatory
requirements on any small entities.
Eligible small entities that are subject to
the Board’s capital rule could make
such an election, which would require
immediate changes to reporting,
recordkeeping, and compliance systems
uld increase the number of
qualifying community banking
organizations eligible to elect to use the
framework. The proposed rule,
therefore, would not impose mandatory
requirements on any small entities.
Eligible small entities that are subject to
the Board’s capital rule could make
such an election, which would require
immediate changes to reporting,
recordkeeping, and compliance systems.
Further, as discussed previously in
the Paperwork Reduction Act section,
the proposal would not make changes to
the projected reporting, recordkeeping,
and other compliance requirements of
the community bank leverage ratio
framework. Although the proposed
changes in eligibility requirements of
the proposal could impact the reporting,
recordkeeping, and other compliance
requirements for small entities that elect
to use the community bank leverage
ratio framework, the impact would be a
reduction in reporting and
recordkeeping for these entities.
Therefore, the Board does not expect
that the compliance, recordkeeping, and
reporting updates from this proposal
would impose a significant cost on
small Board-regulated institutions. The
Board is aware of no other federal rules
that duplicate, overlap, or conflict with
the proposal. Although the Board
considered several alternatives, as
discussed in more detail in section V.E.
of this SUPPLEMENTARY INFORMATION, the
proposal would provide greater cost
savings and regulatory relief than these
alternatives. Accordingly, the Board
believes that there are no significant
alternatives to the proposal that would
accomplish the stated objectives and
minimize the economic impact of the
proposal on small entities.
Therefore, the Board believes that the
proposed rule will not have a significant
economic impact on substantial number
of small entities supervised by the
Board.
The Board welcomes comment on all
aspects of its analysis
hat there are no significant
alternatives to the proposal that would
accomplish the stated objectives and
minimize the economic impact of the
proposal on small entities.
Therefore, the Board believes that the
proposed rule will not have a significant
economic impact on substantial number
of small entities supervised by the
Board.
The Board welcomes comment on all
aspects of its analysis. In particular, the
Board requests that commenters
describe the nature of any impact on
small entities and provide empirical
data to illustrate and support the extent
of the impact.
FDIC
The Regulatory Flexibility Act (RFA)
generally requires an agency, in
connection with a proposed rule, to
prepare and make available for public
comment an initial regulatory flexibility
analysis that describes the impact of the
proposed rule on small entities.61
However, an initial regulatory flexibility
analysis is not required if the agency
certifies that the proposed rule will not,
if promulgated, have a significant
economic impact on a substantial
number of small entities. The Small
Business Administration (SBA) has
defined ‘‘small entities’’ to include
banking organizations with total assets
of less than or equal to $850 million.62
Generally, the FDIC considers a
significant economic impact to be a
quantified effect in excess of 5 percent
of total annual salaries and benefits or
2.5 percent of total noninterest
expenses. The FDIC believes that effects
in excess of one or more of these
thresholds typically represent
significant economic impacts for FDIC-
supervised institutions. For the reasons
described below, the FDIC certifies that
the proposed rule will not have a
significant economic impact on a
substantial number of small entities.
The proposed rule, if promulgated,
would amend the CBLR framework
s. The FDIC believes that effects
in excess of one or more of these
thresholds typically represent
significant economic impacts for FDIC-
supervised institutions. For the reasons
described below, the FDIC certifies that
the proposed rule will not have a
significant economic impact on a
substantial number of small entities.
The proposed rule, if promulgated,
would amend the CBLR framework. To
determine whether the proposal would
have a significant economic impact, the
FDIC compared expected outcomes
under the proposal to a baseline
scenario in which the current
regulations remain unchanged;
specifically, the CBLR requirement of 9
percent with a two-quarter grace period.
As described in section V, Economic
Analysis, of this document, the
proposed rule could potentially affect
all community banking organizations,
including many FDIC-supervised
insured depository institutions (IDIs).
According to recent Call Reports, the
FDIC supervises 2,085 IDIs that are
considered small entities for the
purposes of the RFA (small entity
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63 Excluding branches of foreign banks. FDIC Call
Reports, June 30, 2025.
64 Ibid.
65 Call Report Data for the quarters ending
December 30, 2020 and 2022.
IDIs).63 Of these IDIs, 2,057 meet the
size and simplicity requirements of the
CBLR framework by having total
consolidated assets of less than $10
billion, off-balance sheet exposures of
no more than 25 percent of total
consolidated assets, and total trading
assets and trading liabilities of no more
than 5 percent of total consolidated
assets. Within that cohort, 1,755 small
entity IDIs also report leverage ratios
greater than 9 percent, making them
eligible to participate in the CBLR
framework
consolidated assets of less than $10
billion, off-balance sheet exposures of
no more than 25 percent of total
consolidated assets, and total trading
assets and trading liabilities of no more
than 5 percent of total consolidated
assets. Within that cohort, 1,755 small
entity IDIs also report leverage ratios
greater than 9 percent, making them
eligible to participate in the CBLR
framework. Further, 990 of these eligible
small entity IDIs currently elect into the
framework.64 Finally, 14 are in the
CBLR grace period—13 because their
leverage ratios are below 9 percent and
one because it did not meet the off-
balance sheet criterion. Table 3 reports
counts of these FDIC-supervised small
entity IDIs, including a breakdown by
discrete leverage ratio:
TABLE 3—CURRENT COUNTS OF SMALL ENTITY IDIS, PARTITIONED BY LEVERAGE RATIOS
Range of leverage ratio
(percent) *
Total
≤7
7–8
8–9
9–10
10–11
11–12
>12
Excess leverage ratio ** ....................................
≤¥2
¥2–¥1
¥1–0
0–1
1–2
2–3
>3
....................
IDIs that meet CBLR size and simplicity re-
quirements *** ................................................
13
52
237
367
353
259
776
2,057
Participating IDIs ** ............................................
....................
....................
13
161
190
145
494
1,003
% Participating IDIs ...........................................
....................
....................
5%
44%
54%
56%
64%
49%
Call Report Data, June 30, 2025.
* Each range excludes the lower end and includes the upper end.
** ‘‘Excess leverage ratio’’ is equal to leverage ratio minus the CBLR requirement of above 9 percent. ‘‘Participating IDIs’’ are those qualifying small entity IDIs that
elect to use the CBLR framework as of June 30, 2025
.......
....................
....................
5%
44%
54%
56%
64%
49%
Call Report Data, June 30, 2025.
* Each range excludes the lower end and includes the upper end.
** ‘‘Excess leverage ratio’’ is equal to leverage ratio minus the CBLR requirement of above 9 percent. ‘‘Participating IDIs’’ are those qualifying small entity IDIs that
elect to use the CBLR framework as of June 30, 2025.
*** These counts include only FDIC-supervised insured depository institutions (IDIs) that are considered small entities by the Regulatory Flexibility Act and that meet
the qualifying community banking organization criteria involving advanced approaches, total consolidated assets, off-balance sheet exposures, and trading assets and
liabilities. These counts do not include one IDI that does not currently meet off-balance sheet criterion but are in the CBLR grace period.
The proposal would modify the CBLR
framework for qualifying community
banking organizations in two ways.
First, it would reduce the CBLR
requirement from 9 percent to 8 percent.
This reduction would result in a 237 (14
percent) increase in the population of
IDIs eligible for the CBLR framework, as
compared to the baseline population of
1,755. However, as discussed in section
V and presented in Table 3, many banks
that qualify for the CBLR choose not to
elect. Using the same methodology as in
section V, the FDIC estimates that
approximately 159 additional small
entity IDIs would elect into the CBLR
framework under the proposal. These
electing IDIs would benefit by avoiding
the costs associated with gathering,
recording, and reporting various risk-
based capital measures. Those that
operate internal recordkeeping systems
to comply with risk-based capital
regulations may discontinue or simplify
these systems. Others that rely on third
party vendors to operate the relevant
compliance systems could experience
reductions in outsourcing costs. The
FDIC does not have the data necessary
to quantify these benefits
d reporting various risk-
based capital measures. Those that
operate internal recordkeeping systems
to comply with risk-based capital
regulations may discontinue or simplify
these systems. Others that rely on third
party vendors to operate the relevant
compliance systems could experience
reductions in outsourcing costs. The
FDIC does not have the data necessary
to quantify these benefits. However, for
purposes of this RFA analysis, the FDIC
notes that the 159 additional electing
IDIs make up less than 8 percent of the
total number of small entity IDIs
supervised by the FDIC.
The proposed reduction in the CBLR
requirement would lower capital
requirements for all small entity IDIs
that participate in the CBLR framework.
Some IDIs may benefit by expanding
their balance sheets. However, as
discussed in section V, the agencies
acknowledge uncertainty regarding the
extent to which this expansion may
occur; empirical results do not provide
any strong evidence that participating
banks would adjust their balance sheet
composition or tier 1 capital holdings,
relative to the baseline. Specifically,
leverage ratios for participating CBLR
banks did not increase between 2020
and 2022, when the requirement
increased from 8 to 9 percent.65 As
such, for purposes of this RFA analysis,
the FDIC expects most small entity IDIs
would not significantly adjust their
leverage ratios in response to the
proposal.
The second proposed modification to
the CBLR framework is the extension of
the grace period from two quarters to
four quarters. As noted in section V., of
the 210 depository institutions that
entered the grace period in recent years,
28 (13 percent) would have benefited
from a four-quarter grace period. Given
that there are 14 FDIC-supervised small
entity IDIs that are currently under the
grace period, the FDIC estimates that 2
(13 percent) of these IDIs would benefit
under the proposal relative to the
baseline
. As noted in section V., of
the 210 depository institutions that
entered the grace period in recent years,
28 (13 percent) would have benefited
from a four-quarter grace period. Given
that there are 14 FDIC-supervised small
entity IDIs that are currently under the
grace period, the FDIC estimates that 2
(13 percent) of these IDIs would benefit
under the proposal relative to the
baseline. These banks would avoid any
costs incurred by returning to the
generally applicable capital rules. The
FDIC does not have the data necessary
to quantify these benefits; for purposes
of this RFA analysis, the FDIC notes that
the 2 IDIs make up less than half of a
percent of the total number of small
entity IDIs supervised by the FDIC.
The proposed rule may result in
indirect costs on small entity IDIs that
voluntarily participate in the CBLR
framework. Depending on the behaviors
of electing banks, such costs may
include the increased risk of bank
failures; however, Section V notes that
empirical evidence for such costs are
mixed, muted, and/or modest. For
purposes of this RFA analysis, the FDIC
notes that the proposed rule would not
impose direct mandatory costs on any
small entity IDIs.
In summary, the FDIC estimates that
an additional 159 IDIs would accrue
benefits from CBLR election and 2 IDIs
would accrue benefits from the grace
period extension under the proposed
rule. While the FDIC does not have data
to quantify the benefits to these IDIs,
these 161 IDIs make up less than eight
percent of all FDIC-supervised small
entity IDIs. The FDIC does not consider
eight percent to be a substantial number
of small entities. In other words, even if
all 161 IDIs accrued significant benefits,
the proposed rule would not
significantly affect a substantial number
of small entities
does not have data
to quantify the benefits to these IDIs,
these 161 IDIs make up less than eight
percent of all FDIC-supervised small
entity IDIs. The FDIC does not consider
eight percent to be a substantial number
of small entities. In other words, even if
all 161 IDIs accrued significant benefits,
the proposed rule would not
significantly affect a substantial number
of small entities. Other aspects of the
proposed rule, while potentially
affecting all small entity IDIs that
participate in the CBLR framework, are
indirect effects and/or are not expected
to be significant based on empirical
evidence.
Given the analysis above, the FDIC
certifies that the proposed rule would
not have a significant economic impact
on a substantial number of small
entities.
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66 Public Law 106–102, sec. 722, 113 Stat. 1338,
1471 (1999).
67 The Federal banking agencies are the OCC,
Board, and FDIC.
68 12 U.S.C. 4802(a).
69 12 U.S.C. 4802(b).
70 E.O. 12866, 58 FR 51735.
71 E.O. 13563, 76 FR 3821.
72 44 U.S.C. 3501 note.
The FDIC invites comments on all
aspects of the supporting information
provided in this RFA section. The FDIC
is particularly interested in comments
on any significant effects on small
entities that the agency has not
identified.
C. Plain Language
Section 722 of the Gramm-Leach
Bliley Act 66 requires the Federal
banking agencies 67 to use plain
language in all proposed and final rules
published after January 1, 2000. The
agencies have sought to present the
proposed rule in a simple and
straightforward manner and invite
comments on the use of plain language
and whether any part of the proposed
rule could be more clearly stated
age
Section 722 of the Gramm-Leach
Bliley Act 66 requires the Federal
banking agencies 67 to use plain
language in all proposed and final rules
published after January 1, 2000. The
agencies have sought to present the
proposed rule in a simple and
straightforward manner and invite
comments on the use of plain language
and whether any part of the proposed
rule could be more clearly stated. For
example:
• Have the agencies presented the
material in an organized manner that
meets your needs? If not, how could this
material be better organized?
• Are the requirements in the notice
of proposed rulemaking clearly stated?
If not, how could the proposal be more
clearly stated?
• Does the proposal contain language
that is not clear? If so, which language
requires clarification?
• Would a different format (grouping
and order of sections, use of headings,
paragraphing) make the proposed rule
easier to understand? If so, what
changes to the format would make the
proposal easier to understand?
• What else could the agencies do to
make the proposal easier to understand?
D. OCC Unfunded Mandates Reform Act
of 1995
The OCC analyzed the proposed rule
under the factors set forth in the
Unfunded Mandates Reform Act of 1995
(UMRA) (2 U.S.C. 1532). Under this
analysis, the OCC considered whether
the proposed rule includes a Federal
mandate that may result in the
expenditure by State, local, and Tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
in any one year (adjusted for inflation).
Because the proposed rule would not
specifically require banks to modify
their policies and procedures, the OCC
has determined that there are no
expenditures for the purposes of UMRA.
Therefore, the OCC concludes that the
proposed rule would not result in an
expenditure of $100 million or more
annually by state, local, and tribal
governments, or by the private sector.
E
for inflation).
Because the proposed rule would not
specifically require banks to modify
their policies and procedures, the OCC
has determined that there are no
expenditures for the purposes of UMRA.
Therefore, the OCC concludes that the
proposed rule would not result in an
expenditure of $100 million or more
annually by state, local, and tribal
governments, or by the private sector.
E. Riegle Community Development and
Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the
Riegle Community Development and
Regulatory Improvement Act
(RCDRIA),68 in determining the effective
date and administrative compliance
requirements for new regulations that
impose additional reporting, disclosure,
or other requirements on insured
depository institutions, each Federal
banking agency must consider,
consistent with principles of safety and
soundness and the public interest, any
administrative burdens that such
regulations would place on depository
institutions, including small depository
institutions, and customers of
depository institutions, as well as the
benefits of such regulations. In addition,
section 302(b) of RCDRIA requires new
regulations and amendments to
regulations that impose additional
reporting, disclosures, or other new
requirements on insured depository
institutions generally to take effect on
the first day of a calendar quarter that
begins on or after the date on which the
regulations are published in final form,
with certain exceptions.69
The agencies note that comment on
these matters has been requested in
other sections of this Supplementary
Information section, and that the
requirements of RCDRIA will be
considered as part of the overall
rulemaking process. In addition, the
agencies also invite any other comments
that further will inform their
consideration of RCDRIA.
F
ished in final form,
with certain exceptions.69
The agencies note that comment on
these matters has been requested in
other sections of this Supplementary
Information section, and that the
requirements of RCDRIA will be
considered as part of the overall
rulemaking process. In addition, the
agencies also invite any other comments
that further will inform their
consideration of RCDRIA.
F. Executive Orders 12866, 13563 and
14192
Executive Order 12866 (Regulatory
Planning and Review) 70 and Executive
Order 13563 (Improving Regulation and
Regulatory Review) 71 direct agencies to
assess the costs and benefits of available
regulatory alternatives and, if regulation
is necessary, to select regulatory
approaches that maximize net benefits.
This proposed rule was drafted and
reviewed in accordance with Executive
Order 12866 and Executive Order
13563. Within OMB, the Office of
Information and Regulatory Affairs
(OIRA) has determined that this
rulemaking is a ‘‘significant regulatory
action’’ under section 3(f) Executive
Order 12866. The proposal, if finalized
as proposed, is not expected to be an
Executive Order 14192 regulatory
action.
G. Providing Accountability Through
Transparency Act of 2023
The Providing Accountability
Through Transparency Act of 2023
requires that a notice of proposed
rulemaking include the internet address
of a summary of not more than 100
words in length of a proposed rule, in
plain language, that shall be posted on
the internet website under section
206(d) of the E-Government Act of
2002.72
The agencies are proposing to lower
the community bank leverage ratio
requirement from above 9 percent to
above 8 percent. The proposal would
also extend the length of the ‘‘grace
period’’ afforded to qualifying
community banking organizations that
fall out of compliance with the
community bank leverage ratio from two
quarters to four quarters, with a
reservation of authority to provide
further extensions if deemed
appropriate
ommunity bank leverage ratio
requirement from above 9 percent to
above 8 percent. The proposal would
also extend the length of the ‘‘grace
period’’ afforded to qualifying
community banking organizations that
fall out of compliance with the
community bank leverage ratio from two
quarters to four quarters, with a
reservation of authority to provide
further extensions if deemed
appropriate. The proposal would also
include a limitation that would allow a
qualifying community banking
organization a grace period of up to four
quarters at a time if it had not used the
grace period for more than eight of the
prior twenty quarters.
The proposal and the required
summary can be found at https://
www.regulations.gov by searching for
Docket ID OCC–2025–0141, https://
occ.gov/topics/laws-and-regulations/
occ-regulations/proposed-issuances/
index-proposed-issuances.html, and at
https://www.federalreserve.gov/
supervisionreg/reglisting.htm and
https://www.fdic.gov/federal-register-
publications.
List of Subjects
12 CFR Part 3
Administrative practice and
procedure, Banks, Banking, Federal
Reserve System, Federal savings
associations, Investments, National
banks, Reporting and recordkeeping
requirements.
12 CFR Part 217
Administrative practice and
procedures, Banks, Banking, Capital,
Federal Reserve System, Holding
companies, Reporting and
recordkeeping requirements, Risk,
Securities.
12 CFR Part 324
Administrative practice and
procedure, Banks, Banking, Capital,
Capital adequacy, Confidential business
information, Investments, Reporting and
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companies, Reporting and
recordkeeping requirements, Risk,
Securities.
12 CFR Part 324
Administrative practice and
procedure, Banks, Banking, Capital,
Capital adequacy, Confidential business
information, Investments, Reporting and
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Federal Register / Vol. 90, No. 228 / Monday, December 1, 2025 / Proposed Rules
recordkeeping requirements, Savings
associations, State non-member banks.
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Chapter I
Authority and Issuance
For the reasons set forth in the
preamble, the Office of the Comptroller
of the Currency proposes to amend part
3 of chapter I of Title 12 of the Code of
Federal Regulations as follows:
PART 3—CAPITAL ADEQUACY
STANDARDS
■1. The authority citation for part 3 is
revised to read as follows:
Authority: 12 U.S.C. 93a, 161, 1462, 1462a,
1463, 1464, 1818, 1828(n), 1828 note, 1831n
note, 1835, 3907, 3909, 5371, 5371 note,
5412(b)(2)(B), and Pub. L. 116–136, 134 Stat.
281.
■2. In § 3.12:
■a. Amend paragraphs (a)(1) and
(a)(2)(i) by removing the text ‘‘9
percent’’ wherever it appears and
adding in its place the text ‘‘8 percent’’;
■b. Remove paragraph (a)(4);
■c. Revise paragraph (c)(1);
■d. Amend paragraph (c)(2) by
removing the word ‘‘second’’ and
adding in its place the word ‘‘fourth’’;
■e. Amend paragraph (c)(6) by
removing the text ‘‘8 percent’’ wherever
it appears and adding in its place the
text ‘‘7 percent’’; and
■f. Add paragraph (c)(7).
The revision and addition read as
follows:
§ 3.12
Community bank leverage ratio
framework.
*
*
*
*
*
(c) * * *
(1) Except as provided in paragraphs
removing the word ‘‘second’’ and
adding in its place the word ‘‘fourth’’;
■e. Amend paragraph (c)(6) by
removing the text ‘‘8 percent’’ wherever
it appears and adding in its place the
text ‘‘7 percent’’; and
■f. Add paragraph (c)(7).
The revision and addition read as
follows:
§ 3.12
Community bank leverage ratio
framework.
*
*
*
*
*
(c) * * *
(1) Except as provided in paragraphs
(c)(5) through (7) of this section, if a
national bank or Federal savings
association ceases to meet the definition
of a qualifying community banking
organization, the national bank or
Federal savings association has a grace
period (grace period) of four reporting
periods under its Call Report either to
satisfy the requirements to be a
qualifying community banking
organization or to comply with
§ 3.10(a)(1) and report the required
capital measures under § 3.10(a)(1) on
its Call Report.
*
*
*
*
*
(7) Notwithstanding paragraphs (c)(1)
through (4) of this section, a national
bank or Federal savings association that
has spent eight or more of the previous
twenty quarters within the grace period,
may not use the grace period in the
current quarter. If the national bank or
Federal savings association does not
meet the definition of a qualifying
community banking organization in the
current quarter, the national bank or
Federal savings association must
immediately comply with the minimum
capital requirements under § 3.10(a)(1)
and must report the required capital
measures under § 3.10(a)(1).
§ 3.303
[Removed and Reserved]
■3. Remove and reserve § 3.303.
FEDERAL RESERVE SYSTEM
12 CFR Chapter II
Authority and Issuance
For the reasons set forth in the
preamble, the Board proposes to amend
part 217 of chapter II of Title 12 of the
Code of Federal Regulations as follows:
PART 217—CAPITAL ADEQUACY OF
BANK HOLDING COMPANIES,
SAVINGS AND LOAN HOLDING
COMPANIES, AND STATE MEMBER
BANKS (REGULATION Q)
■4
served]
■3. Remove and reserve § 3.303.
FEDERAL RESERVE SYSTEM
12 CFR Chapter II
Authority and Issuance
For the reasons set forth in the
preamble, the Board proposes to amend
part 217 of chapter II of Title 12 of the
Code of Federal Regulations as follows:
PART 217—CAPITAL ADEQUACY OF
BANK HOLDING COMPANIES,
SAVINGS AND LOAN HOLDING
COMPANIES, AND STATE MEMBER
BANKS (REGULATION Q)
■4. The authority citation for part 217
continues to read as follows:
Authority: 12 U.S.C. 248(a), 321–338a,
481–486, 1462a, 1467a, 1818, 1828, 1831n,
1831o, 1831p-1, 1831w, 1835, 1844(b), 1851,
3904, 3906–3909, 4808, 5365, 5368, 5371,
5371 note, and sec. 4012, Pub. L. 116–136,
134 Stat. 281.
■5. In § 217.12:
■a. Amend paragraphs (a)(1) and
(a)(2)(i) by removing the text ‘‘9
percent’’ wherever it appears and
adding in its place the text ‘‘8 percent’’;
■b. Remove paragraph (a)(4);
■c. Revise paragraph (c)(1);
■d. Amend paragraph (c)(2) by
removing the word ‘‘second’’ and
adding in its place the word ‘‘fourth’’;
■e. Amend paragraph (c)(6) by
removing the text ‘‘8 percent’’ wherever
it appears and adding in its place the
text ‘‘7 percent’’; and
■f. Add paragraph (c)(7).
The revision and addition read as
follows:
§ 217.12
Community bank leverage ratio
framework.
*
*
*
*
*
(c) * * *
(1) Except as provided in paragraphs
(c)(5) through (7) of this section, if a
Board-regulated institution ceases to
meet the definition of a qualifying
community banking organization, the
Board-regulated institution has a grace
period (grace period) of four reporting
periods under its Call Report or Form
FR Y–9C, as applicable, either to satisfy
the requirements to be a qualifying
community banking organization or to
comply with § 217.10(a)(1) and report
the required capital measures under
§ 217.10(a)(1) on its Call Report or its
Form FR Y–9C, as applicable.
*
*
*
*
*
oard-regulated institution has a grace
period (grace period) of four reporting
periods under its Call Report or Form
FR Y–9C, as applicable, either to satisfy
the requirements to be a qualifying
community banking organization or to
comply with § 217.10(a)(1) and report
the required capital measures under
§ 217.10(a)(1) on its Call Report or its
Form FR Y–9C, as applicable.
*
*
*
*
*
(7) Notwithstanding paragraphs (c)(1)
through (4) of this section, a Board-
regulated institution that has spent eight
or more of the previous twenty quarters
within the grace period, may not use the
grace period in the current quarter. If
the Board-regulated institution does not
meet the definition of a qualifying
community banking organization in the
current quarter, the Board-regulated
institution must immediately comply
with the minimum capital requirements
under § 217.10(a)(1) and must report the
required capital measures under
§ 217.10(a)(1).
*
*
*
*
*
§ 217.304
[Removed and Reserved]
■6. Remove and reserve § 217.304.
*
*
*
*
*
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Chapter III
Authority and Issuance
For the reasons stated in the joint
preamble, the Board of Directors of the
Federal Deposit Insurance Corporation
proposes to amend 12 CFR part 324 as
follows:
PART 324—CAPITAL ADEQUACY OF
FDIC-SUPERVISED INSTITUTIONS
■7. The authority citation for part 324
continues to read as follows:
Authority: 12 U.S.C. 1815(a), 1815(b),
1816, 1818(a), 1818(b), 1818(c), 1818(t),
1819(Tenth), 1828(c), 1828(d), 1828(i),
1828(n), 1828(o), 1831o, 1835, 3907, 3909,
4808; 5371; 5412; Pub. L. 102–233, 105 Stat.
1761, 1789, 1790 (12 U.S.C. 1831n note); Pub.
L. 102–242, 105 Stat. 2236, 2355, as amended
by Pub. L. 103–325, 108 Stat. 2160, 2233 (12
U.S.C. 1828 note); Pub. L. 102–242, 105 Stat.
2236, 2386, as amended by Pub. L. 102–550,
106 Stat. 3672, 4089 (12 U.S.C. 1828 note);
Pub. L. 111–203, 124 Stat. 1376, 1887 (15
U.S.C. 78o–7 note), Pub. L. 115–174; section
4014 § 201, Pub
102–233, 105 Stat.
1761, 1789, 1790 (12 U.S.C. 1831n note); Pub.
L. 102–242, 105 Stat. 2236, 2355, as amended
by Pub. L. 103–325, 108 Stat. 2160, 2233 (12
U.S.C. 1828 note); Pub. L. 102–242, 105 Stat.
2236, 2386, as amended by Pub. L. 102–550,
106 Stat. 3672, 4089 (12 U.S.C. 1828 note);
Pub. L. 111–203, 124 Stat. 1376, 1887 (15
U.S.C. 78o–7 note), Pub. L. 115–174; section
4014 § 201, Pub. L. 116–136, 134 Stat. 281
(15 U.S.C. 9052).
■8. In § 324.12:
■a. Amend paragraphs (a)(1) and
(a)(2)(i) by removing the text ‘‘9
percent’’ wherever it appears and
adding in its place the text ‘‘8 percent’’;
■b. Remove paragraph (a)(4);
■c. Revise paragraph (c)(1);
■d. Amend paragraph (c)(2) by
removing the word ‘‘second’’ and
adding in its place the word ‘‘fourth’’;
■e. Amend paragraph (c)(6) by
removing the text ‘‘8 percent’’ wherever
it appears and adding in its place the
text ‘‘7 percent’’; and
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Federal Register / Vol. 90, No. 228 / Monday, December 1, 2025 / Proposed Rules
■f. Add a new paragraph (c)(7).
The revision and addition read as
follows:
§ 324.12
Community bank leverage ratio
framework.
*
*
*
*
*
(c) * * *
(1) Except as provided in paragraphs
(c)(5) through (7) of this section, if an
FDIC-supervised institution ceases to
meet the definition of a qualifying
community banking organization, the
FDIC-supervised institution has a grace
period (grace period) of four reporting
periods under its Call Report either to
satisfy the requirements to be a
qualifying community banking
organization or to comply with
§ 324.10(a)(1) and report the required
capital measures under § 324.10(a)(1) on
its Call Report.
*
*
*
*
*
e definition of a qualifying
community banking organization, the
FDIC-supervised institution has a grace
period (grace period) of four reporting
periods under its Call Report either to
satisfy the requirements to be a
qualifying community banking
organization or to comply with
§ 324.10(a)(1) and report the required
capital measures under § 324.10(a)(1) on
its Call Report.
*
*
*
*
*
(7) Notwithstanding paragraphs (c)(1)
through (4) of this section, an FDIC-
supervised institution that has spent
eight or more of the previous twenty
quarters within the grace period, may
not use the grace period in the current
quarter. If the FDIC-supervised
institution does not meet the definition
of a qualifying community banking
organization in the current quarter, the
FDIC-supervised institution must
immediately comply with the minimum
capital requirements under
§ 324.10(a)(1) and must report the
required capital measures under
§ 324.10(a)(1).
§ 324.303
[Removed and Reserved]
■9. Remove and reserve § 324.303.
Jonathan V. Gould,
Comptroller of the Currency.
By order of the Board of Governors of the
Federal Reserve System.
Benjamin W. McDonough,
Deputy Secretary of the Board.
Federal Deposit Insurance Corporation.
By order of the Board of Directors,
Dated at Washington, DC, on November 25,
2025.
Jennifer M. Jones,
Deputy Executive Secretary.
[FR Doc. 2025–21625 Filed 11–28–25; 8:45 am]
BILLING CODE 4810–33–6210–01–6714–01–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 117
[Docket No. USCG–2025–0999]
RIN 1625–AA09
Drawbridge Operation Regulation;
Passaic River, Between the City of
Newark and Town of Kearny, NJ
AGENCY: Coast Guard, DHS.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Coast Guard proposes to
modify the operating regulation that
governs the Point No Point Railroad
Bridge across the Passaic River, mile
2.6, between the City of Newark and
Town of Kearny, NJ
25–0999]
RIN 1625–AA09
Drawbridge Operation Regulation;
Passaic River, Between the City of
Newark and Town of Kearny, NJ
AGENCY: Coast Guard, DHS.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Coast Guard proposes to
modify the operating regulation that
governs the Point No Point Railroad
Bridge across the Passaic River, mile
2.6, between the City of Newark and
Town of Kearny, NJ. The proposed
change in the regulation will allow the
bridge to be remotely operated from the
Conrail North Jersey Dispatch Center in
Mount Laurel, NJ. This proposed change
will alter the operating schedule of the
bridge to open on signal and no longer
require a four-hour advance notice. We
invite your comments on this proposed
rulemaking.
DATES: Comments and related material
must be received by the Coast Guard on
or before December 31, 2025.
ADDRESSES: You may submit comments
identified by docket number USCG–
2025–0999 at https://
www.regulations.gov.
See the ‘‘Public Participation and
Request for Comments’’ portion of the
SUPPLEMENTARY INFORMATION section
below for instructions on submitting
comments. This notice of proposed
rulemaking with its plain-language, 100-
word-or-less proposed rule summary
will be available in this same docket.
FOR FURTHER INFORMATION CONTACT: If
you have questions on this proposed
rule, call or email Mr. Gregory P.
Hitchen, Northeast Coast Guard District
(dpb), the Coast Guard; telephone 571–
607–8154, email Gregory.P.Hitchen@
uscg.mil.
SUPPLEMENTARY INFORMATION:
I. Table of Abbreviations
CFR
Code of Federal Regulations
DHS
Department of Homeland Security
FR
Federal Register
OMB
Office of Management and Budget
NPRM
Notice of Proposed Rulemaking
(Advance, Supplemental)
§
Section
U.S.C.
United States Code
II
rtheast Coast Guard District
(dpb), the Coast Guard; telephone 571–
607–8154, email Gregory.P.Hitchen@
uscg.mil.
SUPPLEMENTARY INFORMATION:
I. Table of Abbreviations
CFR
Code of Federal Regulations
DHS
Department of Homeland Security
FR
Federal Register
OMB
Office of Management and Budget
NPRM
Notice of Proposed Rulemaking
(Advance, Supplemental)
§
Section
U.S.C.
United States Code
II. Background, Purpose and Legal
Basis
The Point No Point Railroad Bridge
across the Passaic River, between the
City of Newark and Town of Kearny, NJ,
mile 2.6, owned and operated by
Conrail, has a vertical clearance of 20
feet above mean high water when closed
and is unlimited when open.
This proposed regulation will allow
the bridge to be remotely operated from
the Conrail North Jersey Dispatch Center
in Mount Laurel, NJ. The current
operating schedule is published in 33
CFR 117.739(c). With the
implementation of remote operation of
the bridge, the operating schedule will
change to allow the bridge to open on
signal versus requiring a four-hour
advance notice. There are 30 daily train
transits that cross the bridge and an
average of one bridge opening every six
months for vessel transits. The bridge is
normally maintained in the closed
position due to the average daily
number of trains crossing the bridge.
The Passaic River has limited
commercial and recreational vessel
traffic. Most commercial traffic supports
marine construction projects in the
waterway.
The Coast Guard is proposing to allow
remote operations to improve the
efficiency of bridge openings. Currently
the Conrail train dispatcher in Mount
Laurel NJ must dispatch bridge
operating personnel to open the Point
No Point Railroad Bridge. Remote
operations will allow the Conrail train
dispatcher to open the bridge on signal.
The legal basis for this rulemaking is
33 U.S.C. 499.
III
he Coast Guard is proposing to allow
remote operations to improve the
efficiency of bridge openings. Currently
the Conrail train dispatcher in Mount
Laurel NJ must dispatch bridge
operating personnel to open the Point
No Point Railroad Bridge. Remote
operations will allow the Conrail train
dispatcher to open the bridge on signal.
The legal basis for this rulemaking is
33 U.S.C. 499.
III. Discussion of Proposed Rule
This proposed operating regulation
will allow the Point No Point Railroad
Bridge to be operated remotely from the
Conrail North Jersey Dispatch Center in
Mount Laurel, NJ. The remote
operations system includes eight camera
views (four marine and four rail),
marine radar, sonar, automated
integration system (AIS) sensors,
integration software, a dedicated phone
line for bridge operations, and
radiotelephone communications on
VHF–FM channels 13 and 16.
The remote operation system is
designed to provide equal or greater
capabilities compared to the on-site
bridge tender, in visibility of the
waterway and bridge, and in signals
(communications) via sound and visual
signals and radio telephone (voice) via
VHF–FM channels 13 and 16. The
remote operation system also
incorporates a dedicated telephone line
for bridge operations and push-to-talk
(PTT) capability on VHF–FM channels
13. Vessels that require an opening shall
continue to request an opening via the
methods (sound or visual signals or
radio telephone (VHF–FM) voice
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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.