H.R. 6955: Main Street Capital Access Act

This bill would change how federal bank regulators supervise banks and how some bank-related transactions are reviewed. Its main goal is to make the banking system easier for new banks and smaller banks to operate in, while also adding new rules for transparency, appeals, and reporting by regulators.

Bank formation and support for smaller institutions

The bill is intended to make it faster and easier to form new banks. It also increases support for community development financial institutions (CDFIs), which are lenders that focus on serving low-income and underserved communities. In addition, it raises the size threshold for what counts as a “small bank holding company,” which would allow more bank holding companies to qualify for lighter regulation.

The bill would also adjust certain regulatory thresholds over time, so that some rules automatically update instead of staying fixed indefinitely.

Changes to bank supervision and exams

The bill would require bank exam ratings to be clearer and more objective. It would keep the CAMELS system in place, but require that anti-money laundering compliance be included in the review process. CAMELS is the system regulators use to rate a bank’s capital, assets, management, earnings, liquidity, and sensitivity to risk.

It would set deadlines for exams and for regulators to provide reports, and it would create a faster process for written guidance from regulators. The bill would also set up an independent review board and an appeals process for supervisory decisions, so banks could challenge certain regulatory determinations. Employees or banks that use these processes would be protected from retaliation.

The bill would also bar regulators from using “reputational risk” as a basis for supervision if the bank is otherwise operating safely and soundly. It would require regulators to add disclaimers to guidance and to review the economic impact of certain regulations.

Enforcement and hearing procedures

The bill would require faster and more flexible hearings for civil money penalties and other enforcement actions. This would change how disputes over penalties are handled and could speed up the process for banks and regulators alike.

Rules for small and well-managed banks

Smaller banks and credit unions that are well managed would receive some reduced supervisory burden. The bill would allow alternating examinations and combined examinations in some cases, which could reduce how often separate regulators examine the same institution.

Liquidity and discount window review

The bill would require the Federal Reserve to review how its discount window operates and how well it provides liquidity to banks. The discount window is the Fed’s lending facility for banks that need short-term funds. After the review, the Fed would need to create a remediation plan if problems are found and report to Congress on the findings.

Deposits and mergers

The bill would raise limits on reciprocal deposits, which are deposits that banks place with each other in order to provide customers with access to higher deposit insurance coverage. It would also require a study of reciprocal deposits.

For bank mergers, the bill would streamline approval for smaller-bank mergers. In certain cases, mergers involving institutions under $10 billion in assets would be exempt from antitrust review, which could make some smaller deals easier and faster to complete.

Fintech partnerships, merchant banking, and failed bank rules

The bill would require federal studies and reports on bank-fintech partnerships and merchant banking activities. It would extend the holding period for merchant banking investments to 15 years, which affects how long banks or affiliated firms can hold certain ownership stakes in nonfinancial companies.

It would also narrow the circumstances in which a failing bank can be acquired despite concentration limits. Under the bill, exceptions to those limits would be tied more tightly to financial stability emergencies.

Federal Reserve surplus fund

The bill would reduce the Federal Reserve’s surplus fund by $425 million starting in 2036. This would affect the Fed’s retained surplus balance rather than direct taxpayer funding.

Relevant Companies

• JPM — JPMorgan Chase could be affected by changes to bank merger review, supervision standards, and merchant banking rules.
• BAC — Bank of America could be affected by changes to supervision, regulatory thresholds, and discount window/liquidity rules.
• WFC — Wells Fargo could be affected by changes to exam procedures, supervision, and regulatory appeal processes.
• C — Citigroup could be affected by changes to bank oversight, merchant banking rules, and liquidity-related review requirements.
• PNC — PNC Financial Services could be affected by changes to community bank regulation, merger approvals, and supervisory exam practices.
• TFC — Truist Financial could be affected by changes to small bank holding company thresholds, exams, and merger-related procedures.
• USB — U.S. Bancorp could be affected by changes to supervision, liquidity access, and merger/approval rules.