Fed gets a community bank lobbyist—and banks get a bigger regulatory break

What it does

This bill amends the Federal Reserve Act to create a dedicated Board of Governors seat for a member with demonstrated experience in community banking, tasked with developing policy recommendations and overseeing supervision of banks with less than $17 billion in assets. The bill raises the asset threshold from $10 billion to $17 billion, requires the community bank member to appear at semi-annual congressional hearings, and ties future threshold adjustments to GDP growth.

Why we flagged it

The bill creates a dedicated Federal Reserve board position and oversight mechanism specifically for community banks, raising the regulatory threshold and establishing a formal advocacy channel within the central bank. This is functionally a regulatory carve-out that privileges smaller banks' interests within the Fed's governance structure.

What the text implies

• Raising the asset threshold from $10B to $17B reclassifies approximately $7B in additional banking assets as 'community banks,' potentially reducing regulatory intensity for mid-sized institutions that may pose systemic risks.
• A single board member cannot effectively represent the interests of all community banks while maintaining fiduciary duty to the public; the structure creates a built-in conflict of interest and may institutionalize regulatory capture.
• Semi-annual congressional hearings on community bank supervision may become a lobbying platform for industry concerns, shifting regulatory focus away from consumer protection and toward industry profitability.
• GDP-indexed threshold adjustments will automatically expand the 'community bank' category over time without explicit congressional action, creating a ratchet effect that progressively weakens regulatory scope.
• The bill does not specify how the community bank member's recommendations interact with other board members' authority, creating potential governance ambiguity and turf conflicts within the Fed.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill creates formal representation for community bank interests within the Federal Reserve, potentially improving regulatory attention to smaller banks and their customers. However, raising the asset threshold from $10B to $17B expands the definition of 'community bank' to include larger institutions, potentially diluting regulatory scrutiny and consumer protections for mid-sized banks while concentrating power in a single board member whose primary loyalty may be to the banking industry rat

Who stands to gain

• community banks (under $17B in assets)
• regional banks transitioning into the expanded $10B–$17B threshold
• banking industry trade associations

Named in the bill

Federal Reserve Board of Governors, Vice Chairman for Supervision, Senate Committee on Banking, Housing, and Urban Affairs, House Committee on Financial Services, Federal Financial Institutions Examination Council, Bureau of Economic Analysis, CFG (CITIGROUP — semantic affinity), PEBO (PEOPLES BANCORP — semantic affinity), USB (U.S. BANCORP — semantic affinity), FBK (FIRST BANCORP — regulatory exposure), PFG (PRINCIPAL FINANCIAL GROUP — regulatory exposure)

Where it stands

3 cosponsors: 3 Republicans.

• Dec 10, 2025 — Introduced · Congress.gov: “Introduced in House”
• Dec 10, 2025 — Referred to House Committee on Financial Services · Congress.gov: “Referred to the House Committee on Financial Services”
• Dec 16, 2025 — Markup held in committee · Congress.gov: “Committee Consideration and Mark-up Session Held”
• Dec 17, 2025 — Reported out of committee · Congress.gov: “Ordered to be Reported (Amended) by the Yeas and Nays: 29 - 22”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

2 lobbying clients named this bill on 2 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $2,184,000 in lobbying spend. A filing names 26 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 41% of bills with at least one filing.

Mónica De La Cruz, the sponsor, reported $774,099 in PAC receipts in the 2026 cycle.

• Independent Community Bankers of America — $2,170,000 on 1 filing
• Independent Bankers Association of Texas — $14,000 on 1 filing

Lobbying Disclosure Act filings through Jul 16, 2026. A filing shows who paid to lobby on a bill it names, not what changed.