Congressional leaders reached a bicameral agreement on the 21st Century ROAD to Housing Act, clearing the way for Senate consideration of the package. As of Monday afternoon when this eNewsletter was finalized, the Senate was scheduled to vote on a final passage sometime before Tuesday. If approved, the measure would return to the House for one final vote before heading to the President’s desk.
The unified package, negotiated by Senate Banking Committee Chairman Tim Scott (R-SC), Ranking Member Elizabeth Warren (D-MA), House Financial Services Committee Chairman French Hill (R-AR) and Ranking Member Maxine Waters (D-CA), includes several community banking provisions that IBAT has advocated for since March.
Community Banking Provisions Included in the Package:
Section 901 – Community Bank Deposit Access
Custodial deposits placed by an agent, trustee, custodian or plan administrator for the benefit of a third-party would no longer count as brokered deposits, up to 20% of an eligible institution’s total liabilities. To qualify, a bank must be under $10 billion in assets, well capitalized and maintain a CAMELS rating of 1, 2 or 3.
Section 902 – Keeping Deposits Local
Replaces the current reciprocal deposit cap with a tiered formula excluding 50% of liabilities up to $1 billion, 40% of the portion between $1–10 billion and 30% of the portion between $10–96.3 billion from brokered-deposit treatment. The provision also directs the FDIC to conduct a study of reciprocal deposit usage.
Section 903 – Tailored Regulatory Updates for Supervisory Testing
Doubles the asset threshold for the extended 18-month examination cycle from $3 billion to $6 billion.
Section 905 – Systemic Risk Authority Transparency
Adds GAO and federal banking agency reporting requirements, with a strong presumption of public disclosure, whenever the systemic risk exception is invoked for a bank failure.
Section 906 – Advancing the Mentor-Protégé Program for Small Financial Institutions
Creates a Treasury-administered program pairing large institutions or designated financial agents with small banks, minority depository institutions and rural depository institutions to help build institutional capacity.
Section 907 – American Access to Banking
Streamlines de novo bank applications, assigns each applicant a dedicated regulatory caseworker and establishes voluntary mentor pairings with recently chartered institutions.
Section 908 – Promoting New Bank Formation
Allows new community banks chartered between 2026 and 2028 to phase in capital standards over two years and request business plan flexibility, with automatic approval if regulators fail to act within 90 days.
Section 909 – Rural Depositories Revitalization Study
Requires the federal banking agencies and NCUA to study ways to strengthen rural-serving banks and credit unions and identify barriers to new rural charters.
