The 12 Titles / Title IX
Title IX: Strengthening Community Banks' Role in Housing
This title loosens several banking rules to help community banks and credit unions gather deposits, form, and grow, on the theory that stronger local banks mean more local mortgage and housing lending. It exempts certain custodial and reciprocal deposits from 'brokered deposit' restrictions, stretches exam cycles for more small banks, lets healthy credit union boards meet less often, and creates mentorship programs and streamlined application processes for people trying to start new banks. It also adds new transparency requirements when regulators invoke the 'systemic risk exception' to rescue a failed bank, and orders several studies on reciprocal deposits, new bank formation, and rural banking.
§ 901 Community Bank Deposit Access
Federal law normally treats deposits placed through middlemen ('brokered deposits') as riskier and restricts weaker banks from taking them. This section carves out an exception: custodial deposits placed by trustees, custodians, or retirement-plan administrators no longer count as brokered for a community bank, up to 20 percent of the bank's total liabilities. The exception is limited to banks with under $10 billion in assets that are well capitalized and have a satisfactory exam rating (1, 2, or 3), or that get a regulatory waiver. Banks that take these deposits while not well capitalized face a cap on the interest they can pay, tied to local or national market rates.
Affects: community banks, retirement plan administrators, trust companies, depositors
§ 902 Keeping Deposits Local Notable
Reciprocal deposits are a swap arrangement that lets a customer keep a large sum fully FDI-insured while the money stays with their local bank. This section raises how much of these deposits a bank can hold without them counting as restricted 'brokered' funds, using a sliding scale: 50 percent of the first $1 billion of a bank's liabilities, 40 percent of liabilities between $1 billion and $10 billion, and 30 percent of liabilities between $10 billion and about $96.3 billion. It also updates the exam-rating standard a bank must meet (a CAMELS rating of 1, 2, or 3) and orders the FDIC, with the Federal Reserve, to study how reciprocal deposits have performed since 2018, including during periods of banking stress.
Affects: community banks, municipalities, businesses, nonprofit organizations, depositors
- FDIC: Report to Congress on the reciprocal deposits study — 6 months after enactment (≈ January 11, 2027)
§ 903 Tailored Regulatory Updates for Supervisory Testing
Doubles the asset-size cutoff, from $3 billion to $6 billion, below which a well-run bank qualifies for a full safety-and-soundness exam every 18 months instead of every 12. In practice, more mid-size community banks will face on-site examinations less often, reducing their compliance burden.
Affects: community banks, bank regulators
§ 904 Credit Union Board Modernization
Ends the blanket rule that every federal credit union board must meet monthly. Under the new schedule, brand-new credit unions must still meet monthly for their first five years, and troubled credit unions (composite or management exam ratings of 3, 4, or 5) must keep meeting monthly. Healthy credit unions (ratings of 1 or 2 for both composite condition and management) may drop to six meetings a year, with at least one per quarter.
Affects: credit unions, credit union board members
§ 905 Systemic Risk Authority Transparency Notable
When regulators invoke the 'systemic risk exception' to protect uninsured depositors of a failed bank (as happened with Silicon Valley Bank in 2023), this section requires much fuller public accounting. The GAO must report to Congress within 60 days and again 180 days later on the basis for the rescue, executive mismanagement, compensation practices, and any supervisory failures. The failed bank's own federal regulator must report within 90 days and again 210 days later, disclosing three years of examination reports and supervisory communications (with personal information redacted), its own shortcomings, and reform recommendations. Regulators must publish these materials to the fullest extent possible and must consult congressional committee leaders before withholding anything.
Affects: bank regulators, uninsured depositors, bank executives, taxpayers
- GAO: First GAO review and report to Congress on a systemic risk determination — 60 days after each determination, and again 180 days thereafter
- Federal banking agencies: Federal banking agency report to Congress disclosing exam records and supervisory failures for the failed bank — 90 days after each determination, and again 210 days thereafter (extendable by 60 days with notice to Congress)
§ 906 Advancing the Mentor-Protege Program for Small Financial Institutions
Directs the Treasury Department to create a 'Financial Agent Mentor-Protege Program' in which large financial institutions (those with $50 billion or more in assets) or existing government financial agents mentor small institutions -- those with $2 billion or less in assets, minority depository institutions, or rural banks under $10 billion. The goal is to prepare small institutions to serve as financial agents of the government or to improve services for their customers. Treasury must hold outreach events at least once a year and report participation numbers to Congress.
Affects: community banks, minority depository institutions, rural banks, large financial institutions
- Treasury: Hold outreach events promoting program participation — at least once a year
- Treasury: Report to Congress on program participation and outreach events — annually (no fixed statutory start date)
§ 907 American Access to Banking Notable
Aims to make it easier to start a new ('de novo') bank or credit union. Federal regulators must streamline application forms, pull needed information from other government sources instead of repeatedly asking applicants, and review with the SEC how startup banks can raise capital, including from non-accredited investors. Applicants can request a dedicated agency caseworker as a single point of contact, and can ask for a list of recently approved banks willing to serve as volunteer mentors. Agencies must also develop plans, with public comment, to coordinate with state regulators and stakeholders on encouraging new banks, including rural, community development, and minority institutions.
Affects: bank organizers, community banks, credit unions, state regulators, underserved communities
- Federal financial institutions regulatory agencies: First annual report to Congress on streamlining actions and capital-raising recommendations (published on agency websites; repeated annually for 5 years) — 1 year after enactment (≈ July 11, 2027)
- Federal financial institutions regulatory agencies: Publish information and directions on requesting or serving as a de novo mentor — 1 year after enactment (≈ July 11, 2027)
- Federal financial institutions regulatory agencies: Submit state and stakeholder engagement plans to Congress (then every 5 years) — 2 years after enactment (≈ July 11, 2028)
§ 908 Promoting New Bank Formation Notable
Creates a pilot program to lower barriers for newly chartered community banks. Regulators may let a qualifying community bank -- one with under $10 billion in combined assets that gets FDIC insurance between January 1, 2026 and December 31, 2028 -- phase in its federal capital requirements over its first two years. During those two years, the new bank can also request permission to deviate from its regulator-approved business plan; the regulator must decide within 180 days, must explain any denial and suggest fixable changes, and a request left undecided past the statutory window is deemed approved. Regulators must jointly study the pilot's impact and, separately, why so few new banks have formed in the past decade.
Affects: bank organizers, community banks, rural banks, minority depository institutions, underserved communities
- Federal banking agencies: Joint report to Congress on causes of low de novo bank formation and ways to promote new banks — 1 year after enactment (≈ July 11, 2027)
- Federal banking agencies: Joint report to Congress on the pilot program's impact on new bank formation — December 31, 2031
§ 909 Rural Depositories Revitalization Study
Requires two studies on rural banking, plainly and simply. The Federal Reserve, OCC, and FDIC must jointly study how to improve the growth, capital adequacy, and profitability of banks that primarily serve rural areas, and identify federal laws or regulations that get in the way of rural banking or the creation of new rural banks. The National Credit Union Administration must do the same for rural credit unions. Both reports go to Congress within a year.
Affects: rural banks, rural credit unions, rural communities
- Federal Reserve, OCC, and FDIC: Joint report to Congress on the rural depository institutions study — 1 year after enactment (≈ July 11, 2027)
- NCUA: Report to Congress on the rural credit unions study — 1 year after enactment (≈ July 11, 2027)
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