[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3937 Introduced in Senate (IS)]

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118th CONGRESS
  2d Session
                                S. 3937

 To require the appropriate Federal banking agencies to establish a 3-
year phase-in period for de novo financial institutions to comply with 
    Federal capital standards, to provide relief for de novo rural 
                community banks, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 14, 2024

Mrs. Hyde-Smith introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To require the appropriate Federal banking agencies to establish a 3-
year phase-in period for de novo financial institutions to comply with 
    Federal capital standards, to provide relief for de novo rural 
                community banks, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Promoting Access to Capital in 
Underbanked Communities Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Trends in bank closures and consolidation have left 
        many communities without access to banking services and 
        disproportionately impact underserved rural and urban 
        communities.
            (2) De novo bank formation has slowed significantly 
        following the financial crisis.
            (3) A November 2019 report by the Federal Reserve System 
        found that 44 counties in the United States were ``deeply 
        affected'' by trends in bank closures and consolidation, 
        meaning that the counties had fewer than 10 branches in 2012 
        and lost not less than 50 percent of them by 2017.
            (4) 89 percent of the deeply affected counties described in 
        paragraph (3) were rural.
            (5) Rural counties deeply affected by branch closures had 
        higher poverty rates, lower median income, and a higher share 
        of their population were African-American compared to all rural 
        communities.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Appropriate federal banking agency; depository 
        institution; depository institution holding company.--The terms 
        ``appropriate Federal banking agency'', ``depository 
        institution'', and ``depository institution holding company'' 
        have the meanings given those terms in section 3 of the Federal 
        Deposit Insurance Act (12 U.S.C. 1813).
            (2) Community bank leverage ratio.--The term ``Community 
        Bank Leverage Ratio'' has the meaning given that term under 
        section 201(a) of the Economic Growth, Regulatory Relief, and 
        Consumer Protection Act (12 U.S.C. 5371 note).
            (3) Financial institution.--The term ``financial 
        institution'' means a depository institution or depository 
        institution holding company.
            (4) Rural community bank.--The term ``rural community 
        bank'' means a financial institution--
                    (A) with total consolidated assets of less than 
                $10,000,000,000; and
                    (B) located in a rural area, as defined in section 
                1026.35(b)(2)(iv)(A) of title 12, Code of Federal 
                Regulations, or any successor regulation.

SEC. 4. PHASE-IN OF CAPITAL STANDARDS.

    The appropriate Federal banking agencies shall issue rules that 
provide for a 3-year phase-in period for a financial institution to 
meet any Federal capital requirements that would otherwise be 
applicable to the financial institution, where the 3-year period begins 
on the date on which the deposit insurance that the financial 
institution has obtained from the Federal Deposit Insurance Corporation 
becomes effective.

SEC. 5. CHANGES TO BUSINESS PLANS.

    (a) In General.--During the 3-year period beginning on the date on 
which the deposit insurance that the financial institution has obtained 
from the Federal Deposit Insurance Corporation becomes effective, a 
financial institution may request to deviate from a business plan that 
has been approved by the appropriate Federal banking agency by 
submitting a request to the agency pursuant to this section.
    (b) Review of Changes.--An appropriate Federal banking agency 
shall, not later than the end of the 30-day period beginning on the 
receipt of a request under subsection (a)--
            (1) approve, conditionally approve, or deny the request; 
        and
            (2) notify the financial institution of the decision and, 
        if the agency denies the request--
                    (A) provide the financial institution with the 
                reason for the denial; and
                    (B) suggest changes to the request that, if 
                adopted, would allow the agency to approve the request.
    (c) Result of Failure To Act.--If an appropriate Federal banking 
agency fails to approve or deny a request within the 30-day period 
required under subsection (b), the request shall be deemed to be 
approved.

SEC. 6. RURAL COMMUNITY BANK LEVERAGE RATIO.

    (a) In General.--During the 3-year period beginning on the date on 
which the deposit insurance that a rural community bank has obtained 
from the Federal Deposit Insurance Corporation becomes effective, the 
Community Bank Leverage Ratio for the rural community bank shall be 8 
percent.
    (b) Phase-In Authority.--The Federal banking agencies shall issue 
rules to phase-in the Community Bank Leverage Ratio described in 
subsection (a) with respect to a rural community bank by setting lower 
Community Bank Leverage Ratio percentages during the first 2 years of 
the 3-year period described in subsection (a).

SEC. 7. AGRICULTURAL LOAN AUTHORITY FOR FEDERAL SAVINGS ASSOCIATIONS.

    Section 5(c) of the Home Owners' Loan Act (12 U.S.C. 1464(c)) is 
amended--
            (1) in paragraph (1), by adding at the end the following:
                    ``(V) Agricultural loans.--Secured or unsecured 
                loans for agricultural purposes.''; and
            (2) in paragraph (2)(A), by striking ``business, or 
        agricultural'' and inserting ``or business''.

SEC. 8. STUDY ON DE NOVO FINANCIAL INSTITUTIONS.

    (a) Study.--The appropriate Federal banking agencies shall, 
jointly, carry out a study on--
            (1) the principal causes for the low number of de novo 
        financial institutions in the 10-year period ending on the date 
        of enactment of this Act; and
            (2) ways to promote more de novo financial institutions in 
        areas currently underserved by financial institutions.
    (b) Report to Congress.--Not later than the end of the 1-year 
period beginning on the date of enactment of this Act, the appropriate 
Federal banking agencies shall, jointly, issue a report to Congress 
containing all findings and determinations made in carrying out the 
study required under subsection (a).
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