What does Preamble of Promoting New Bank Formation Act do?

This bill, formally titled H.R. 478, aims to establish a 3-year phase-in period for de novo financial institutions to comply with Federal capital standards. The bill also intends to provide relief for de novo rural community banks. The bill was introduced in the House of Representatives on January 16, 2025, and referred to the Committee on Financial Services.

What does SHORT TITLE. of Promoting New Bank Formation Act do?

This bill is formally titled Promoting New Bank Formation Act

What does PHASE-IN OF CAPITAL STANDARDS. of Promoting New Bank Formation Act do?

This section concerns the phase-in of capital standards for depository institutions. The Federal banking agencies are required to issue rules establishing a 3-year phase-in period. This phase-in period applies to meeting Federal capital requirements. The phase-in period begins either on the date the institution became an insured depository institution, or, in the case of a holding company, the date its subsidiary became insured.

What does CHANGES TO BUSINESS PLANS. of Promoting New Bank Formation Act do?

This section outlines a process for insured depository institutions to request deviations from approved business plans. During a 3-year period after becoming an insured depository institution, an institution or its holding company can submit a request to the appropriate Federal banking agency. The agency must review the request and approve, conditionally approve, or deny it within 30 days. If the agency denies the request, it must provide a reason and suggest changes to potentially gain approval. Failure by the agency to act within the 30-day period results in the request being deemed approved.

What does RURAL COMMUNITY DEPOSITORY INSTITUTION LEVERAGE RATIO. of Promoting New Bank Formation Act do?

This section sets the Community Bank Leverage Ratio for rural community banks at 8 percent for 3 years after becoming an insured depository institution. The Federal banking agencies will phase-in the Community Bank Leverage Ratio with lower percentages during the first 2 years. Rural depository institutions are defined as those with total consolidated assets of less than $10,000,000,000 and located in a rural area.

What does AGRICULTURAL LOAN AUTHORITY FOR FEDERAL SAVINGS ASSOCIATIONS. of Promoting New Bank Formation Act do?

Section 5 amends Section 5(c) of the Home Owners’ Loan Act. The amendment adds 'Agricultural loans--Secured or unsecured loans for agricultural purposes' to paragraph (1). Paragraph (2)(A) is modified by removing 'business, or agricultural' and replacing it with 'or business'.

What does STUDY ON DE NOVO INSURED DEPOSITORY INSTITUTIONS. of Promoting New Bank Formation Act do?

The Federal banking agencies are required to conduct a joint study. The study will examine the reasons for the low number of new insured depository institutions in the 10 years prior to the Act's enactment. The study will also explore methods to encourage more new insured depository institutions in underserved areas. The Federal banking agencies must submit a report of their findings to Congress within one year of the Act's enactment.

What does DEFINITIONS. of Promoting New Bank Formation Act do?

This Act defines specific terms by referencing section 3 of the Federal Deposit Insurance Act. The terms 'appropriate Federal banking agency', 'depository institution', 'depository institution holding company', 'Federal banking agency', and 'insured depository institution' derive their meaning from the Federal Deposit Insurance Act.

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Promoting New Bank Formation Act

Last updated: 5/6/2025 · Introduced: 1/16/2025

Author: Andy Barr (R-KY)

TL;DR (AI)

The bill establishes a 3-year phase-in period for de novo financial institutions to comply with Federal capital standards.
The Community Bank Leverage Ratio for rural community banks is set at 8 percent for 3 years after becoming an insured depository institution, with lower percentages phased in during the first 2 years.
The bill amends the Home Owners’ Loan Act to add agricultural loans as a type of loan that Federal savings associations are authorized to make.

119th Congressin committeeOfficial page

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Includes provisions on preamble, short title., and 6 more.

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