The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (FDIC) have published revisions to the Community Bank Compliance Guide for the Community Bank Leverage Ratio (CBLR) framework. These updates incorporate changes to the framework that became effective on July 1, 2026.
Key revisions include lowering the minimum leverage ratio requirement for qualifying community banking organizations from greater than 9 percent to greater than 8 percent. Additionally, the "grace period" for banks temporarily failing to meet criteria has been revised. A community bank now has four quarters to return to compliance, provided it maintains a leverage ratio greater than 7 percent and does not exceed an eight-quarter limit within a five-year period. If a bank's leverage ratio falls to 7 percent or less during the grace period, it must comply with applicable risk-based capital standards.
The CBLR framework offers a simplified measure of capital adequacy for eligible community banking organizations. Depository institutions and holding companies with less than $10 billion in total consolidated assets and a tier 1 leverage ratio greater than 8 percent are considered qualifying and can opt into the framework. The compliance guide serves to help these organizations understand the optional CBLR framework, though it does not carry the effect of law or regulation.
This framework was established in response to Section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), enacted in 2018, which directed federal banking agencies to develop a simplified capital ratio for qualifying community banks.