Promoting New Bank Formation Act

Key Points

• This bill helps new banks get started by giving them three years to meet federal rules about how much money they must keep in reserve. Currently, new banks often struggle with these strict financial requirements right away.
• Small banks in rural areas would get extra help. For their first three years, they would only need to keep 8 percent of their value in reserve, and the government could set even lower limits during the first two years to help them grow.
• New banks would be allowed to change their business plans more easily. If they ask the government for a change, the agency must answer within 30 days or the change is automatically approved.
• Federal savings associations would gain the power to offer more loans for farming and agriculture. This is intended to help farmers get the money they need for their operations.
• The government would also study why so few new banks have opened in the last ten years. They will look for ways to encourage more banks to open in areas that do not have enough banking options.

Impact Analysis

Govbase has not yet run an impact analysis on this legislation.