The OCC, Federal Reserve, and FDIC jointly issued a final rule on April 23, 2026, revising the Community Bank Leverage Ratio framework — the simplified capital regime that lets qualifying banks trade complex risk-weighted calculations for a single leverage ratio.
The rule, titled “Regulatory Capital Rule: Revisions to the Community Bank Leverage Ratio Framework,” takes effect July 1, 2026. Comptroller of the Currency Jonathan Gould’s statement made the agencies’ position clear: simplicity can’t come at the expense of prudential soundness.
Here’s where it gets consequential for community banks: the revised eligibility criteria mean institutions currently using the CBLR need to verify they still qualify. Some won’t meet the new thresholds. The agencies also recalibrated the leverage ratio itself, which could affect capital buffers enough to make the CBLR less attractive than it looks.
The final rule also refines grace period mechanics for banks that dip below the required ratio, providing more operational clarity on how to return to compliance and how long they have to do it. Technical updates align CBLR reporting with broader regulatory capital requirements, reducing inconsistencies across regimes.
For banks that stay in, internal systems, policies, and reporting processes need updating before July 1. For banks on the edge, the strategic question is whether the simplified regime still outweighs the traditional risk-based approach. The agencies answer that question with a shrug: your call, but decide fast.
James Okafor