H.R. 6554: Community Bank Representation Act

The Community Bank Representation Act aims to amend the Federal Reserve Act to enhance the representation of community banks within the Federal Reserve System. Here’s a breakdown of the key provisions and changes proposed by the bill:

1. Short Title

The bill can be referred to as the Community Bank Representation Act.

2. Appointing a Community Bank Member

The bill proposes modifications to the composition and responsibilities of the Board of Governors of the Federal Reserve. Specifically, it mandates the selection of a board member who has significant experience working in or overseeing community banks. Key changes include:

• Asset Threshold: The bill removes the reference to the existing asset threshold of $10 billion in total assets. Instead, it sets a new threshold of less than $17 billion for banking organizations affected by this focus.
• Policy Development: The appointed member will develop policy recommendations regarding the regulation and supervision of banking organizations below this new asset threshold.

3. Hearings and Accountability

This community bank member, if different from the Vice Chairman for Supervision, is required to appear before certain congressional committees at semi-annual hearings. These hearings will focus on the Board's actions and objectives related to the supervision of smaller banking organizations.

4. Annual Adjustment of Asset Threshold

The bill introduces an annual adjustment mechanism for the community bank asset threshold based on changes in the nominal gross domestic product (GDP) of the United States. Each year, if the GDP increases, the asset limit amount will be adjusted accordingly. This means that the threshold for what constitutes a community bank will be revised each year to reflect economic growth, a step aimed at keeping the regulation relevant over time.

5. Consultation Requirement

Other amendments include a requirement for the community bank member to consult with another member of the board on matters affecting smaller banking organizations. This emphasizes collaboration and ensures that community banking interests are represented in regulatory discussions throughout the Federal Reserve's decision-making processes.

Relevant Companies

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