Texas Insider Report: WASHINGTON, D.C. – Congressman Byron Donalds (R-FL) has introduced transformative legislation to increase access to capital for small businesses and small banks.
H.R. 2835 - "The Small Bank Holding Company Relief Act" is the 14th piece of legislation introduced by Congressman Donalds during the 119th Congress, is co-led by Congressman Mike Haridopolos (R-FL), and has received the support of Congressman Frank Lucas (R-OK).
Specifically, the "The Small Bank Holding Company Relief Act" raises the consolidated asset threshold of Bank Holding Companies (BHCs) to qualify as Small Bank Holding Companies (SBHCs) from $3 billion to $25 billion. Raising the asset threshold for SBHC would enable more banks to operate at higher debt levels, which can allow them to raise capital more cheaply.
SBHCs are allowed to operate at higher levels of debt which can be used to capitalize the bank subsidiary—promoting growth and lending. This legislation does not change capital rules and regulations for subsidiary banks. Congressman Donalds released the following statement:
"Under the crushing. regulatory regime of President Biden, the American Dream was out of reach for millions of ambitious entrepreneurs across our nation. Under President Trump, we are putting the American people first again and unleashing prosperity. This is why I'm proud to introduce 'The Small Bank Holding Company Relief Act' alongside Congressman Haridopolos. This legislation will increase much-needed access to capital for small businesses and small banks. The American Dream is for all Americans, and with increased access to capital, what once were just dreams will become reality."
Background:
- Bank Holding Companies are corporations that own controlling interests in one or more banks, but they do not offer banking services themselves.
- Currently, a Bank Holding Company must have less than $3 billion in consolidated assets to qualify as a Small Bank Holding Company.
- Small Bank Holding Companies are exempt from the Federal Reserve’s risk-based capital and leverage rules.
