US bank regulators cut community bank leverage ratio to 8%
→Community banks can use the simplified capital framework at 8%
Change
US federal bank regulatory agencies finalized a rule lowering the community bank leverage ratio from 9% to 8%, effective July 1, 2026.
Why it matters
Community bank capital reporting now has a lower entry threshold for the simplified leverage framework. Eligible banks that temporarily fall below the threshold get four quarters, instead of two, to regain compliance.
Implications
- → Eligible community banks must test capital plans against the 8% threshold before July 1, 2026 — qualifying banks can use the simplified leverage framework instead of risk-based capital reporting.
- → Regulatory reporting teams must update CBLR reporting assumptions for the effective date — filings based on the old 9% threshold may misstate framework eligibility.
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Source
View on Federal Reserve