Tailored Regulatory Updates for Supervisory Testing Act of 2025

Floor Speech

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Mr. HILL of Arkansas. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4478) to amend the Federal Deposit Insurance Act to permit Federal banking agencies to examine qualifying insured depository institutions with under $6 billion in total assets not less than once during each 18-month period, and for other purposes.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 4478

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.

This Act may be cited as the ``Tailored Regulatory Updates for Supervisory Testing Act of 2025'' or the ``TRUST Act of 2025''. SEC. 2. MODIFICATION OF EXAMINATION CYCLE THRESHOLDS FOR WELL-MANAGED INSTITUTIONS.

Section 10(d) of the Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is amended--

(1) in paragraph (4)(A), by striking ``$3,000,000,000'' and inserting ``$6,000,000,000''; and

(2) in paragraph (10), by striking ``$3,000,000,000'' and inserting ``$6,000,000,000''.

Mr. Speaker, I rise in support of the bill introduced by the gentleman from North Carolina (Mr. Moore), H.R. 4478, the TRUST Act.

For many community banks across the country, the challenge is not a lack of demand for loans. It is the growing weight of compliance costs and administrative burden that has steadily increased over time-- dramatically in the years since the global financial crisis.

These institutions play an essential role in our local communities by providing capital to help local farmers expand operations, support entrepreneurs, and allow families to meet their goals of building a house or doing a renovation.

Overly frequent exam schedules for well-performing, low-risk banks take significant time and resources away from the customers and communities they are meant to serve. The TRUST Act recognizes that regulatory oversight should reflect the level of risk that an institution actually presents to its shareholders, its depositors, and the economy, obviously, at large.

This bill raises the threshold for the 18-month exam cycle from $3 billion to $6 billion for those institutions that are well capitalized and well managed under the definitions of Federal regulators.

It is critical that we modernize outdated thresholds to prevent inflation and economic growth from unnecessarily increasing burdens on our community institutions. By expanding access to an extended exam cycle, these well-managed community banks with a strong track record can focus more time and resources on lending and serving their customers rather than just being caught up in an endless cycle of repetitive paperwork.

At the same time, the TRUST Act maintains robust oversight, with Federal regulators retaining their full authority to examine institutions and ensure the safety and soundness of our banking system.

By balancing effective oversight with reduced burden for well-managed institutions, this bill allows community banks to better serve families, farmers, and small businesses that rely on them every single day.

Mr. Moore's TRUST Act is a targeted reform that promotes efficiency without sacrificing accountability and ensures that our regulatory framework keeps pace with the needs of our communities and the financial institutions that serve them.

Mr. Speaker, I urge all of my colleagues on both sides of the aisle to support Mr. Moore's bill, H.R. 4478, and I reserve the balance of my time.

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Mr. HILL of Arkansas. Mr. Moore is the author of this bill and has given great thought to how we advance the ability of our Main Street institutions to serve our customers.

Mr. MOORE of North Carolina. Mr. Speaker, I thank the chairman for yielding me time.

Mr. Speaker, I rise today in support of the bill, the Tailored Regulatory Updates for Supervisory Testing Act, otherwise known as the TRUST Act.

Back home in western North Carolina, and in so much of rural America, community banks are very often the only financial institution in so many of our small towns. These are the banks that are helping a young couple get approved for their first mortgage or sitting down with someone who wants to open a business to be able to extend that line of credit that they need to do so.

Our community bankers are involved in the community. They give back to charity, as they truly are a part of the community and a key part of our economy.

Right now what is happening is these small-town banks are suffocating under a regulatory system that just does not make sense. It is one- size-fits-all, and it really makes no sense to treat a small, rural community bank to the same exact regulatory and compliance standards as you do with the really super large banks that you have around the country. It is just not fair. They can't keep up with it, and it just causes ridiculous costs that don't make sense.

The central issue that this bill goes to is to address the examination cycle that these banks are required to undergo.

The way it works is Federal regulators routinely examine banks to make sure they are operating safely and responsibly; something that is extremely important. We cannot cut down on oversight.

Under current law, the healthiest community banks can qualify for examinations every 18 months instead of 12 months, but the eligibility for that relief is tied to an outdated asset threshold that was set back in 2018 which has not been updated since then.

At that time, about 94 percent of community banks fell under the $3 billion threshold that allowed them to qualify for the longer examination cycle. Today, because of inflation and economic growth alone, it takes nearly $6 billion in assets to cover that same share of banks.

Let's call this what it is. These banks did not suddenly become reckless overnight or stop serving their communities responsibly. The only thing that changed was the economy grew, and Washington never bothered to modernize the rules.

That means that well-run community banks are now being pushed to more frequent exam cycles simply because of an outdated number on paper that no longer reflects the reality.

Here is what happens. Every hour spent preparing paperwork for regulators is an hour not spent helping small businesses and helping individuals who need to get access to credit. What has to happen is this has to be updated. Congress can do this, and I believe they will do this today.

Passing the TRUST Act would update the threshold from $3 billion to $6 billion. What that would do is allow this law to reflect today's economy, and community banks will continue to qualify for the same regulatory relief that Congress originally intended.

Absolutely just as important, the bill does not weaken the safety and soundness standards one bit. These institutions must still maintain strong ratings, be well-capitalized and operate without enforcement actions.

To someone who is watching at home today or hears about this and wonders, why is this important? Well, it is important because if you cut down on the amount of regulations, the amount of red tape, the amount of money that just goes into the bureaucracy to feed this, if you stop spending that money there, you have that money to put into small businesses and to provide money to working families, folks who need access to capital.

For that reason and so many more--I know this is a great bill, and I appreciate the support--I urge the body's passage.

I want to echo the compliments of the ranking member on this bill as well as the bill that we discussed a few minutes ago by Mr. Timmons of South Carolina and Mr. Foster of Illinois. These bills speak to the heart of how to let a Main Street community bank under $6 billion that is well-managed and well-capitalized and let them do what they do best, which is grow their business, serve their customers, innovate new products, and serve those customers in the best way they know how. Maybe they can even grow their loan pipeline.

I can assure you, Mr. Speaker, having worked in an institution of that size, the number of personnel deviated from the tasks I just outlined about better customer service, growing your business, serving your community, attending the hospital board meeting, sponsoring the local little league, that is all put to the side when you are in one after another bank exam, which are frequently uncoordinated as in the case of Mr. Timmons' and Mr. Foster's bill, or again the benefit of having a predictable cycle, a tailored cycle based on the size of the institution, as the gentleman from North Carolina (Mr. Moore) proposes.

These have practical impacts every day for the American economy. A bank under $1 billion in size of assets, Mr. Speaker, probably has 100 to 150 employees. In any exam you are going to pull off, I would say, at least 10 percent of that total employment base with hours focused on exam prep, exam service, and exam follow-up.

These have practical implications, and I want to thank the gentleman from North Carolina (Mr. Moore) for speaking out on smaller financial institutions across this country to see the practical hands-on benefits of this strong bipartisan bill that he has brought to the House floor today.

I urge all my colleagues to vote ``yes'' on the TRUST Act. Mr. Speaker, I include in the Record the CBO estimate on this bill. EFFECTS ON DIRECT SPENDING AND REVENUES OF LEGISLATION -------------------------------------------------------------------------------------------------------------------------------------------------------- Additional Effect on Direct Information on Direct Link to Published Bill Number Title Spending Effect on Revenues Spending and Revenue Estimates Effects -------------------------------------------------------------------------------------------------------------------------------------------------------- H.R. 4478.......................... TRUST Act............. Reduce by at Least Increase by at Least Would decrease net N/A $500K. $500K. deficits by at least tens of millions.. -------------------------------------------------------------------------------------------------------------------------------------------------------- Source: Congressional Budget Office.
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