OCC Releases Compliance Guide for New Community Bank Leverage Ratio Framework

The Office of the Comptroller of the Currency (OCC) has issued a revised compliance guide for the community bank leverage ratio (CBLR) framework.

The updated guide is designed to help community banks understand the revisions to the optional CBLR framework that went into effect July 1, the OCC said in a Thursday (July 30) press release.

The revised framework could reduce the burden on 95% of community banks and free up $64 billion that could support additional lending to Main Street businesses, according to the release.

“President Donald J. Trump and Secretary of the Treasury Scott Bessent are leading a community bank comeback by unleashing Parallel Prosperity for Main Street and Wall Street,” Comptroller of the Currency Jonathan V. Gould said in the release. “The OCC is proud to support their efforts by reducing cumbersome regulations that have long hindered these vital institutions and impeded U.S. economic growth.”

The OCC announced in April that the federal bank regulatory agencies jointly finalized a rule to modify the CBLR. The OCC said the modifications would allow community banks to use a simpler measure of capital adequacy and reduce regulatory burden.

The final rule was adopted without change from a proposal issued in November, and it would take effect July 1, the OCC said at the time in a press release.

PYMNTS reported in May that the OCC was touting its efforts to ease rules governing community banks, saying that most of these banks are well-managed and well-capitalized, conduct business safely and avoid risk.

The OCC’s efforts include modifying the CBLR framework; tailoring the regulator’s examination process to the bank’s size, complexity and risk profile with increased focus on material financial risks; and requiring bank examiners to employ a newly updated resource to simplify bank information technology and cybersecurity examinations for community banks.

“Community banks are anchors of local economies, providing essential banking services and small business lending that helps power job creation,” Gould said at the time in a press release.

“The OCC has taken a range of actions to better tailor its supervision and provide meaningful reforms to community banks so they can continue to drive economic development in their local communities and the broader national economy,” Gould said.