HR-6955-119
Placed on the Union Calendar, Calendar No. 535.
Sponsored by J. Hill (R-AR)
What it does
The Main Street Capital Access Act would make broad changes to federal banking law aimed at reducing regulatory burdens on community banks, credit unions, and small bank holding companies. It would ease capital requirements and reporting obligations for smaller institutions, raise the asset-size thresholds at which stricter federal regulations kick in (adjusting them for GDP growth going forward), and streamline the process for forming new banks — especially in rural areas. It would also increase transparency in bank supervision, modify the rules governing bank mergers and failures, and update the framework for bank-fintech partnerships.
Who benefits
Community banks and small bank holding companies, which would face lower capital requirements, reduced reporting burdens, and more flexible leverage ratios. Rural banks and credit unions, which would receive targeted capital relief and be the subject of new federal studies aimed at expanding their presence. Entrepreneurs seeking to start new banks ("de novo" institutions), who would benefit from a 3-year phase-in of capital standards and faster business plan review timelines. Residents of rural and underserved areas, who may gain access to more local banking options. Financial technology (fintech) companies seeking partnerships with banks. Community Development Financial Institutions (CDFIs), which would benefit from an extended and improved bond guarantee program. Small businesses and farmers in rural areas, who may gain access to more locally available credit, including new agricultural loan authority for federal savings associations.
Who is hurt
Consumers and depositors at smaller institutions that may carry lower capital buffers, who could face modestly elevated risk if a bank fails. Taxpayers, who bear residual risk through FDIC deposit insurance if reduced capital requirements contribute to bank failures. Larger banks and financial institutions that currently compete under stricter rules, which may face a less level playing field as smaller competitors gain regulatory relief. Consumer advocacy groups and communities that rely on Home Mortgage Disclosure Act and Community Reinvestment Act reporting, since raised thresholds would exempt more institutions from those disclosure and reinvestment requirements. Bank supervisory agency staff, who would face new procedural and reporting mandates. Competitors of CDFIs that do not benefit from the expanded bond guarantee program.
Supporters argue
Supporters argue that many of the asset-size thresholds in existing banking law were set decades ago and have never been adjusted for inflation or economic growth, meaning that regulations originally designed for large banks now apply to mid-sized community institutions that pose far less systemic risk. They contend that the sharp decline in de novo bank formation — from hundreds of new charters per year before 2008 to fewer than a handful annually in recent years — has left rural and underserved communities without adequate local banking access, and that targeted capital relief and streamlined chartering would reverse this trend. They further argue that tailoring regulation to actual risk profiles, rather than applying one-size-fits-all rules, would free community banks to deploy more capital into local lending without meaningfully increasing systemic risk.
Opponents argue
Opponents argue that reduced capital requirements and higher regulatory thresholds directly weaken the financial buffers that protect depositors and taxpayers from bank failures, pointing to the 2023 failures of Silicon Valley Bank and Signature Bank — both of which had benefited from prior threshold increases — as evidence that loosening oversight of mid-sized institutions creates real systemic risk. They contend that raising the asset thresholds at which enhanced prudential standards apply could exempt a significantly larger share of the banking system from stress testing, liquidity requirements, and resolution planning. They further argue that weakening Home Mortgage Disclosure Act and Community Reinvestment Act reporting requirements for more institutions would reduce transparency and accountability in lending to low- and moderate-income communities at a time when those tools remain important fair lending safeguards.
Constitutional context
Congress's authority to regulate banking and financial institutions rests on the Commerce Clause (Art. I, §8, cl. 3), which gives Congress broad power to regulate interstate commerce, and the Necessary and Proper Clause (Art. I, §8, cl. 18). The bill's delegation of threshold-adjustment authority to the Federal Reserve and other agencies could face scrutiny under the post-Loper Bright framework (Loper Bright v. Raimondo, 2024), where courts now independently assess whether agency actions stay within their statutory authority, and under the major questions doctrine (West Virginia v. EPA, 2022), though the bill's explicit statutory authorizations are designed to provide the clear congressional direction those doctrines require.
Checks and balances
Congress gains authority by setting new statutory thresholds and mandating agency rulemaking timelines, while the Federal Reserve, OCC, FDIC, and NCUA retain implementation power subject to congressional reporting requirements, GAO oversight, and judicial review under the post-Chevron independent-judgment standard.
Historical precedent
The Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (S. 2155) similarly raised asset thresholds and reduced regulatory burdens for community and mid-sized banks, and several of its threshold changes are directly amended by this bill.