WASHINGTON — Community banks are pressing for a larger role in shaping U.S. banking policy as regulators under President Donald Trump’s administration advance a series of measures aimed at reducing regulatory burdens on smaller lenders, industry groups and federal agencies said in recent months.
The push comes as federal banking regulators move forward with changes that community banks have long sought, including simplified capital requirements and more tailored supervisory standards. Supporters say the changes could allow smaller institutions to expand lending and better compete with larger banks, while maintaining safety and soundness standards.
The Office of the Comptroller of the Currency (OCC) said in May that it had taken steps to reduce examination and compliance burdens on community banks, citing their role in providing banking services and credit to local businesses and households. Comptroller of the Currency Jonathan V. Gould said community banks are “anchors of local economies” and that regulatory reforms are intended to help them continue supporting economic development.
Among the most significant changes this year, the OCC, the Federal Reserve and the Federal Deposit Insurance Corporation finalized revisions to the Community Bank Leverage Ratio framework. The rule lowers the leverage ratio threshold from 9% to 8% and extends the grace period for institutions that temporarily fall out of compliance, changes regulators said would provide greater flexibility while preserving strong capital standards. The revisions are scheduled to take effect on July 1.
Industry groups, including the Independent Community Bankers of America (ICBA), have welcomed the administration’s regulatory approach. In March, ICBA President and Chief Executive Rebeca Romero Rainey said proposed reforms would provide community banks with “much-needed regulatory relief” and support mortgage lending and housing affordability efforts.
Community banking advocates have also pointed to additional policy gains in 2026, including exemptions affecting small-business lending reporting requirements and other regulatory adjustments that they say recognize the distinct business models of smaller institutions.
Critics of broader banking deregulation have historically argued that reducing oversight could increase risks within the financial system, although regulators have emphasized that recent changes are designed to remain consistent with safety-and-soundness requirements. Federal agencies have said community banks opting into the revised framework will continue to face capital standards intended to protect depositors and the banking system.
As of June 22, regulators were continuing to implement the new rules, while community banking groups were urging policymakers to pursue additional reforms that they say would further reduce compliance costs and expand lending capacity. Details of any future regulatory proposals remain unclear.
