Trump administration eases regulations for small US banks
The Trump administration has introduced regulatory changes aimed at easing compliance burdens on community banks in an effort to stimulate lending. The Office of the Comptroller of the Currency (OCC) updated the Community Bank Leverage Ratio framework, lowering it from 9% to 8%. This change is expected to free up $64 billion for local lending and apply to over 95% of community banks with less than $10 billion in assets. The rule also extends compliance grace periods and allows banks more flexibility without being subsidiaries of larger financial institutions. The move reflects broader efforts by the administration to support smaller banks, which have seen a significant decline since 2010—over 45% reduction—with their share of bank loans dropping from 27% to 20%. The OCC has also expanded community bank definitions for regulatory purposes and reduced scrutiny on growth. Treasury Secretary Scott Bessent highlighted concerns that post-crisis regulations have made it difficult for small banks to thrive, creating a 'too small to succeed' effect.
