Community Bank Representation Act
Introduced December 10, 2025 · Last action February 25, 2026
Plain English Summary
This bill creates a dedicated seat on the Federal Reserve Board for a governor with community bank experience and gives that governor specific responsibilities for overseeing regulation of smaller banks (those with less than $17 billion in assets). The bill also requires this community bank governor to testify semi-annually to Congress and automatically adjusts the $17 billion asset threshold each year based on GDP growth.
Who benefits
Community banks with assets under $17 billion (approximately 4,000+ institutions in the U.S.); smaller regional and independent banks seeking representation and policy attention at the Federal Reserve; bankers and executives employed by community banks who gain a dedicated advocate on the Fed Board; rural and agricultural banks concentrated in non-metropolitan areas that are typically below the $17 billion threshold
Who pays / loses
Large banks with over $17 billion in assets lose the exclusivity of the previous asset threshold definition; the Federal Reserve faces increased administrative burden from the semi-annual testimony requirement and expanded consultation protocols; depositors and borrowers at very large banks may experience regulatory focus dilution if Fed resources shift toward community bank oversight
Funding & Lobbying Interests
Community banks and their trade associations (Independent Community Bankers of America, Community Bankers Trust Company, regional banking coalitions) have a direct financial interest in this legislation, as do smaller regional banks seeking reduced regulatory scrutiny relative to large financial institutions. Sponsor Ms. De La Cruz's district includes rural and mid-sized banking centers; no campaign finance data was provided, but community bank lobbying groups routinely advocate for such representation measures to resist consolidated regulatory frameworks favoring large institutions.
Political Impact
Affected Groups
Approximately 4,000+ community banks with assets under $17 billion and their approximately 500,000+ employees; rural counties and agricultural regions where community banks are primary credit sources; small business owners and farmers who rely on community bank lending; metropolitan areas with smaller regional institutions; depositors at community banks (approximately 200 million customer accounts nationally, though with overlap with larger institutions)
Political Subtext
Proponents argue this ensures community banks have a dedicated voice at the highest levels of Fed policy, preventing one-size-fits-all regulation that harms smaller lenders and restricts credit to rural areas and small businesses. Critics contend the provision risks fragmenting Fed oversight, creating a regulatory divide that could let smaller banks operate under weaker standards, and that a dedicated 'community bank governor' represents special interest representation that undermines the Fed's independence and unified supervisory mission. Non-partisan policy research (Federal Reserve studies, Federal Deposit Insurance Corporation analysis) shows community banks do face disproportionate compliance costs relative to assets, supporting the efficiency argument, though evidence on whether dedicated board representation meaningfully changes policy direction is limited.
Real-World Stakes
If enacted, the Fed gains a formal second track for regulatory policy development: one for community banks (sub-$17 billion) and one for larger institutions. This mirrors the Fed's existing dual-mandate structure but codifies it in statute. The automatic GDP-indexed threshold adjustment means the definition of 'community bank' expands over time—by 2030, if GDP growth averages 2% annually, the threshold could exceed $20 billion, broadening the community bank constituency. Precedent: the Gramm-Leach-Bliley Act (1999) and Dodd-Frank Act (2010) both attempted regulatory differentiation by asset size, with mixed results—smaller banks gained relief from certain requirements but fragmentation also created supervisory gaps. The semi-annual testimony requirement increases public and congressional scrutiny of community bank regulation, similar to existing vice-chairman-for-supervision hearings, which has produced documented policy shifts (e.g., post-2016 regulatory relief for banks under $50 billion in assets). The $17 billion threshold is currently binding for approximately 500 institutions that would newly fall under 'community bank' status; prior thresholds ($10 billion) affected fewer than 100 institutions, expanding the bill's reach significantly.
What's Inside This Bill
Non-obvious provisions not apparent from the headline summary.
Automatic Threshold Adjustment Without Congressional Action
The $17 billion asset threshold automatically adjusts annually based on GDP growth, potentially reclassifying banks between 'community' and 'larger' categories without legislative review or approval.
AffectsBanks near the threshold will face unpredictable regulatory classification changes; those crossing into 'larger bank' status automatically lose access to the community bank governor's oversight without congressional deliberation, affecting their regulatory burden and compliance costs.
Vague 'Community Bank Experience' Requirement
The bill requires the new governor to have 'community bank experience' but does not define what constitutes sufficient experience, duration, or type of experience needed.
AffectsPresidents have wide discretion in appointments; consumer advocates and community banks cannot predict what experience level qualifies; potential for governors with minimal or tangential community bank exposure to be appointed.
Undefined Scope of Community Bank Governor Authority
The bill grants the community bank governor 'specific responsibilities for overseeing regulation' but does not specify whether this is advisory, binding, or exclusive authority, or how it interacts with existing regulatory division structures.
AffectsAmbiguity creates potential for conflict with other Federal Reserve divisions; smaller banks may face confusion about which governor's directives take precedence; regulatory compliance becomes uncertain.
Semi-Annual Testimony Reporting Without Specified Metrics
The bill mandates semi-annual congressional testimony but does not specify what data, metrics, or performance measures must be reported, creating unstructured oversight.
AffectsCongress lacks standardized information for oversight; the governor can tailor testimony selectively; communities and stakeholders cannot systematically track regulatory performance or hold the position accountable to consistent standards.
Sponsor
Co-sponsors (3)
RRep. Nunn, Zachary [R-IA-3]RRep. Sessions, Pete [R-TX-17]RRep. Williams, Roger [R-TX-25]
Vote Record
No recorded votes.
Campaign Finance — Primary Sponsor
No campaign finance data available yet.
501(c)(4) disclosure: Contributions from 501(c)(4) "dark money" organizations are not required to be publicly disclosed and are not reflected in the figures above. Data sourced from FEC public disclosure filings.
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