WASHINGTON – This week, U.S. Senator Jerry Moran (R-Kan.) – member of the Senate Banking Committee – introduced the Community Bank Regulatory Relief Act, joined by U.S. Senators Kevin Cramer (R-N.D.), Tom Cotton (R-Ark.) and Thom Tillis (R-N.C.).

The legislation would provide community banks with regulatory relief as coronavirus continues to negatively impact the economy through two commonsense changes:

1. Lowering the community bank leverage ratio (CBLR), a ratio of capital to unweighted assets developed by federal banking agencies, from 9 percent to 8 percent. This would give community banks extra resources to meet their financial needs during the coronavirus pandemic.
2. Delaying the implementation of the cumbersome Current Expected Credit Loss (CECL) accounting standards for community banks until December 2024, freeing them to lend more funds to consumers in times of economic stress.

“Over the coming weeks, Kansans need to be able to turn to their local banks for financial support,” said Sen. Moran. “Lenders should not be forced to tighten their lending practices when the economy needs it the most. These two sensible measures will help free up capital to ensure community banks are able to support customers who are struggling due to the effects of coronavirus, all at no additional cost to the taxpayer.”

“A combination of good management by industry leaders and prompt action by the Federal Reserve has given our system the liquidity it needs to combat the economic downturn, but current laws and regulations create perverse incentives for financial institutions to hold available funds rather than to responsibly disperse them to qualifying individuals,” said Sen. Cramer. “Without adding new money to the market, our bill frees already-existing funds by knocking down regulatory barriers, moving money from the bank to Main Street where it’s needed. I hope we include this legislation in the next relief package Congress considers.”

“Our first priorities right now must be protecting Americans’ health and hard-earned money from disruptions caused by the Wuhan virus emergency,” said Sen. Cotton. “This bill would shield small banks from cumbersome regulations to ensure they can continue operating and meeting the needs of their communities, including to help keep families and small businesses afloat, during this crisis.”

“As we work to combat the spread of coronavirus, we must ensure our community and regional banks have the flexibility they need to serve communities,” said Sen. Tillis. “This legislation will provide regulatory relief to these financial institutions and allow them to play an important role in our economic recovery." 

Click here for a one-pager on this legislation.

Click here to view the full bill text.

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