Community Bank Leverage Ratio (CBLR): Background and Analysis of Bank Data [Updated May 11, 2020] [open pdf - 1MB]
From the Introduction: "To improve individual bank safety and soundness and financial system stability, bank regulators have implemented a number of regulations requiring banks to hold minimum levels of capital. [...] In response to concerns that small banks faced unnecessarily burdensome capital requirements, Congress mandated further tailoring of capital rules in Section 201 of P.L. 115-174, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (EGRRCPA). [...] This report examines capital ratios generally, as well as the capital ratio regime that was in place before EGRRCPA's enactment and will continue to be in place for banks that do not qualify for or do not elect to exercise the CBLR [Community Bank Leverage Ratio] option. It then describes Section 201 of EGRRCPA, the regulation implemented pursuant to that provision, and the ensuing debate surrounding this implementation. The report then describes the temporary lowering of the threshold pursuant to the CARES [Coronavirus Aid, Relief, and Economic Security] Act. Lastly, this report presents estimates on the number and characteristics of banks that would have qualified under the rule given their pre-implementation balance sheets and estimates those banks' CBLRs in the pre-implementation time period. This provides context on the number of banks potentially affected by CBLR implementation."
CRS Report for Congress, R45989
Congressional Research Service: https://crsreports.congress.gov/