CBLR Requirement Lowered From 9% to 8%
Summary
Federal banking agencies have finalized interagency rulemaking to expand eligibility for the community bank leverage ratio framework, lowering the CBLR requirement from 9% to 8% and extending the grace period for non-compliance from two quarters to four quarters. The changes take effect on July 1, 2026, and were supported by the American Bankers Association as meaningful adjustments that will help community banks reduce regulatory burden while maintaining safety and soundness.
Community banks that currently use or are considering the CBLR framework should verify their qualification status under the new 8% threshold and review their capital planning accordingly. The extended grace period from two to four quarters provides additional flexibility for banks that temporarily fall below qualifying criteria.
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What changed
The finalized rule lowers the CBLR requirement from 9% to 8%, which will expand the number of community banks that can opt into the framework, and extends the grace period for banks to remain in the CBLR framework without meeting qualifying criteria from two quarters to four quarters. Community banks currently using or considering the CBLR framework should review whether the adjusted 8% threshold and extended grace period better suit their capital planning needs, as the changes take effect July 1, 2026.
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Apr 24, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
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April 23, 2026 Reading Time: 1 min read Federal banking agencies today finalized interagency rulemaking to expand the eligibility criteria for the community bank leverage ratio, adopting changes first proposed last year without further revisions.
The finalized rule lowers the CBLR requirement from 9% to 8%, which will expand the number of community banks that can opt into the framework, according to the agencies. It also expands the time banks can remain in the CBLR framework without meeting the qualifying criteria, from two quarters to four quarters.
The FDIC, Federal Reserve and the Office of the Comptroller of the Currency proposed revising the CBLR framework last year to encourage more community banks to use it. The changes will take effect on July 1.
The American Bankers Association in January urged the agencies to adopt the changes, pointing to concerns raised by community banks that the current calibration and short grace period have limited the CBLR’s effectiveness in reducing regulatory burden. In a statement today, ABA President and CEO Rob Nichols said the new rule “makes meaningful adjustments to the CBLR framework while preserving the strong capital foundation of the banking system.”
“Regulators’ decision to lower the ratio to 8% and extend the grace period for qualifying community banks will help ensure the simplified framework works as intended,” Nichols said. “This will allow community banks to do even more to serve customers, strengthen local economies, and support small businesses, farmers, and families — while maintaining safety and soundness.”
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