Agencies Finalize 8% Community Bank Leverage Ratio Rule
Summary
The FDIC, Federal Reserve Board, and Office of the Comptroller of the Currency jointly finalized amendments to the Community Bank Leverage Ratio Framework, lowering the required ratio from nine percent to eight percent and extending the grace period for temporary non-compliance from two quarters to four quarters. The rule, adopted without change from the November 2025 proposal, takes effect on July 1, 2026 and is designed to provide community banks with greater flexibility and reduced regulatory burden while maintaining safety and soundness requirements.
“The rule will lower the community bank leverage ratio from nine percent to eight percent, which will provide more flexibility for community banks to opt into the framework.”
Community banks that have been evaluating opt-in to the CBLR framework may find the lowered eight-percent threshold a more accessible entry point. Banks near the former nine-percent threshold should reassess their capital planning with the new requirement and extended grace period in mind, while ensuring they maintain ratios significantly above the standard requirement under the framework.
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What changed
The final rule amends the existing Community Bank Leverage Ratio Framework by reducing the required leverage ratio from nine percent to eight percent and extending the grace period for temporary non-compliance from two quarters to four quarters. Community banks that opt into the framework may benefit from simplified regulatory capital measurement, replacing detailed risk-based capital ratio calculations with a straightforward leverage ratio. Banks subject to this framework must maintain a leverage ratio substantially above the standard applicable to other community banks, preserving safety and soundness requirements.
Community banks currently near the nine-percent threshold or operating with limited capital buffers should review their positions under the new eight-percent requirement. The extended grace period provides additional flexibility for banks that temporarily fall out of compliance. Institutions considering whether to opt into the framework should evaluate their business models and risk profiles against the simplified capital measurement approach the framework offers.
Archived snapshot
Apr 23, 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.
Joint Press Release
April 23, 2026
Agencies finalize changes to enhance community bank leverage ratio
- Federal Deposit Insurance Corporation
- Federal Reserve Board
Office of the Comptroller of the Currency
For release at 3:30 p.m. EDT-
-
The federal bank regulatory agencies today jointly finalized a rule to modify the community bank leverage ratio consistent with existing statutory authority. This change will provide community banks with greater flexibility to use a simpler measure of capital adequacy and reduce regulatory burden. The final rule takes into account the unique business models and risk profiles of community banks.
The final rule is being adopted without change from the proposal issued in November 2025. The rule will lower the community bank leverage ratio from nine percent to eight percent, which will provide more flexibility for community banks to opt into the framework. The final rule also extends the grace period from two quarters to four quarters for a community bank that temporarily falls out of compliance. The framework continues to simplify regulatory capital requirements for community banks by allowing them to adopt a relatively simple leverage ratio to measure capital adequacy, rather than calculating and reporting risk-based capital ratios.
Community banks that opt into the framework will be subject to a capital requirement that continues to promote safety and soundness. Under the framework, banks must maintain a leverage ratio that is significantly higher than the leverage ratio standard otherwise applicable to community banks.
The changes will take effect on July 1, 2026.
- Federal Register notice: Regulatory Capital Rule: Revisions to the Community Bank Leverage Ratio Framework (PDF)
- Board Memo (PDF)
Media Contacts:
FDIC Julianne Fisher Breitbeil (202) 240-3042 FRB Samuel Wayt (202) 452-2955 OCC Monica McCoy (202) 649-6870
Related Content
- Board Votes Last Update: April 23, 2026
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