Congress quietly raises bank exemption threshold to $25 billion
H.R. 2835 — Small Bank Holding Company Relief Act · Filed by Byron Donalds (R-FL) · 6 cosponsors · Introduced Apr 10, 2025 · Reported out
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What it does
This bill requires the Federal Reserve to raise the asset threshold that defines a 'small' bank holding company from its current level to $25 billion. Banks below this threshold face fewer regulatory requirements. The bill benefits bank holding companies by exempting more of them from stricter oversight rules; ordinary citizens may face reduced consumer protections and increased systemic risk if larger banks operate with lighter regulation.
Why we flagged it
The bill's operative mechanism is a straightforward regulatory exemption: it raises the asset threshold that determines which banks qualify for lighter oversight. This is deregulation by definition, even though the title frames it as 'relief' for small institutions.
What the text implies
- A $25 billion threshold captures mid-sized regional banks that are systemically important but would now operate under 'small bank' exemptions designed for genuinely small institutions, potentially creating regulatory arbitrage and hidden leverage.
- The 180-day implementation window is tight; the Fed may lack time for full impact analysis on consumer protections, capital adequacy, and stress-testing requirements that would be waived.
The full analysis lists 4 implications of this text.
Who stands to gain
bank holding companies with $10–25 billion in consolidated assets; savings and loan holding companies in the same range; regional and mid-sized banks seeking to reduce compliance costs