Final Rule Modifies Community Bank Leverage Ratio Framework
Summary
The Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, and Federal Deposit Insurance Corporation jointly issued a final rule modifying the Community Bank Leverage Ratio (CBLR) framework under section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. The rule lowers the CBLR requirement from 9 percent to 8 percent and extends the grace period from two quarters to four quarters for community banks that fall below the ratio. Additionally, banks are limited to using the grace period for a maximum of eight out of the prior twenty quarters. The changes are designed to encourage broader adoption of the CBLR framework while maintaining strong capital standards and enabling community banks to increase lending capacity in their communities.
FDIC-supervised community banks currently under the 9% CBLR threshold, or those considering entry into the CBLR framework, should model the impact of the new 8% requirement on their capital planning. Banks that previously did not qualify for the CBLR framework due to the higher threshold may now be eligible and should evaluate whether the simplified reporting approach suits their operations.
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What changed
The final rule makes three substantive modifications to the CBLR framework: (1) reduces the leverage ratio requirement from 9 percent to 8 percent, (2) extends the grace period for banks that fall below the threshold from two quarters to four quarters, and (3) caps grace-period usage at eight quarters within any twenty-quarter window.\n\nCommunity banks with less than $10 billion in total consolidated assets that are not advanced approaches banks and elect the CBLR framework will benefit from the lower threshold and extended transition period. Banks currently using or considering the CBLR framework should assess whether the 8 percent requirement better fits their capital position and update internal compliance procedures accordingly. The extended grace period provides additional runway for banks to return to compliance or transition to risk-based capital requirements without triggering enhanced supervision.
Archived snapshot
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.
Final Rule on Revisions to the Community Bank Leverage Ratio (CBLR) Framework
Laws and Regulations April 23, 2026
Summary:
The Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System (Federal Reserve), and Federal Deposit Insurance Corporation (together, the agencies) are issuing a final rule that modifies the community bank leverage ratio (CBLR) framework, consistent with section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, to encourage broader adoption for community banks.
Statement of Applicability: The contents of, and materials referenced in, this FIL apply to qualifying FDIC-supervised financial institutions with less than $10 billion in total consolidated assets that are not advanced approaches banks and elect the CBLR framework.
Highlights:
Specifically, the final rule:
- Lowers the CBLR requirement from 9 percent to 8 percent, which would allow more community banks to qualify for the CBLR framework.
- Extends the grace period from two quarters to four quarters, in order to provide additional time for community banks to either satisfy the definition of a qualifying community banking organization under the CBLR framework, or to achieve compliance with risk-based capital requirements.
- Limits a community bank to using the grace period for a maximum of eight out of the prior twenty quarters.
- Encourages broader adoption of the CBLR framework, while maintaining strong capital standards and enabling banks that opt into the CBLR framework additional capacity to increase lending in their communities. FIL-19-2026 ## Attachment(s)
Revisions to the Community Bank Leverage Ratio Framework Final Rule
Related Topics
Capital Markets
Contact(s)
regulatorycapital@fdic.gov
Last Updated: April 23, 2026
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