US federal bank regulators lower community bank leverage ratio to 8%
Community bank regulatory-capital teams can qualify for the CBLR simplified capital framework only by maintaining at least an 8% leverage ratio from July 1, 2026
Change
US federal bank regulatory agencies finalized a rule lowering the community bank leverage ratio (CBLR) threshold from 9% to 8%, effective July 1, 2026.
Why it matters
Community banks can use the simplified CBLR framework only when they meet the revised 8% leverage ratio requirement, replacing the prior 9% threshold. Community banks that opt into CBLR can remain in the framework after a temporary shortfall only within an extended four-quarter grace period.
Implications
- — Community bank regulatory-capital reporting teams must apply the 8% CBLR threshold from July 1, 2026 — using the 9% threshold after that date misclassifies CBLR eligibility.
- — Community bank capital management teams using the CBLR framework must operate within the revised four-quarter grace period when temporarily out of compliance — exceeding the grace window ends CBLR treatment under the framework.
Who is affected
- — Community bank regulatory-capital reporting teams
- — Community bank capital management teams using the CBLR framework
What to watch
- — Effective: 2026-07-01 — 8% CBLR threshold and four-quarter grace period apply from this date.