The U.S. House of Representatives on July 21 voted 270-155 to approve legislation led by U.S. Reps. Andy Barr (R-KY) and French Hill (R-AR) that would modernize banking regulations that have made it more difficult for community banks to grow and compete.
The Main Street Capital Access Act, H.R. 6955, which would reduce banking regulations, including those regarding institution formation, supervision by federal financial regulators, and bank merger requirements, advanced to the U.S. Senate, where it is now under consideration by the U.S. Senate Banking, Housing, and Urban Affairs Committee.
“Community banks are at the heart of Kentucky’s economy. They finance our small businesses, stand by our farmers, and help hardworking families buy homes, start businesses, and build a better future,” Rep. Barr said. “House Republicans are delivering on our commitment to strengthen Main Street by cutting red tape, expanding access to capital, and creating an environment where community banks can thrive. I’m proud the House is advancing this legislation to support the local financial institutions that keep our communities strong.”
If enacted, the bill would establish a three-year phase-in period for capital requirements, allowing newly chartered banks time to grow before meeting full regulatory standards, and increase transparency in the chartering and supervisory process by requiring regulators to provide clearer guidance for new banks.
Additionally, H.R. 6955 would better tailor federal banking regulations to a bank’s size and risk profile, ensuring community banks are not treated like the nation’s largest financial institutions, according to a bill summary provided by Rep. Barr’s office.
The bill also would streamline reporting requirements for community and regional banks, reducing compliance costs and allowing more resources to flow toward lending, among several other provisions, the summary says.
Rep. Hill sponsored H.R. 6955 on Jan. 7 alongside 29 GOP original cosponsors, including lead cosponsor Rep. Barr.
Rep. Hill, chairman of the House Financial Services Committee and a former community banker, said he has seen firsthand how community banks drive Main Street’s growth.
“For decades, Washington has forced these institutions to operate under rules built for the largest, most systemically important banks, stifling local lending and accelerating industry consolidation. This bill fixes that. It spurs the formation of new banks, restores common-sense tailoring to bank regulation, and removes barriers that have limited lending in communities across the country,” Rep. Hill said.
The Kentucky Bankers Association and Commerce Lexington support the measure.