Sen. Budd and Rep. Moore Introduce Bipartisan Legislation To Promote Community Banks
This week, Senator Ted Budd and U.S. Representative Tim Moore (NC-14) along with Democrats and Republicans in the House and Senate introduced the Tailored Regulatory Updates for Supervisory Testing (TRUST) Act. This bipartisan effort would increase the examination threshold for well-managed institutions from $3 billion to $6 billion in total assets to qualify for the extended 18-month exam cycle. The reforms target a regulatory bottleneck that subjects low-risk community banks to unnecessarily frequent exams by federal regulations. Additionally, the TRUST Act would free up regulators to focus on larger or riskier institutions and increase efficiency.
“The federal regulatory threshold for well-managed institutions has failed to keep up with inflation, industry consolidation, and modern risk management practices, and as a result has sacrificed both the resources and efficiency of our community banks. Increasing the statutory 18-month exam cycle asset threshold for community banks would free these small, low-risk institutions to do what they do best—provide financial resources to their communities, such as lending more to small businesses and offering more mortgages and private loans. The TRUST Act delivers responsible regulatory reforms that cut unnecessary red tape and modernize federal bank supervision,” said Senator Budd. Congressman Moore is sponsoring the legislation in the House.
The TRUST Act is endorsed by the American Bankers Association (ABA), the Independent Community Bankers of America (ICBA), the American Fintech Council (AFC), and the North Carolina Bankers Association (NCBA). Read the full bill text HERE.
“Community banks and credit unions are essential to the success of our local economies as they’re the place where folks turn when they need help buying a home or starting a business. Local financial institutions shouldn’t be hindered by one-size-fits-all regulations that treat them like major banking corporations. I’m proud to work with Senator Budd on the TRUST Act to ensure these banks have the flexibility to focus on serving hardworking families and building new opportunities for economic growth,” said Representative Moore.
Federal banking regulators are required to conduct on-site examinations of insured depository institutions to ensure the soundness and compliance with the law. Currently, only institutions with total assets under $ billion qualify for the 18-month examination cycle; the threshold has not kept pace with inflation, industry consolidation, or modern risk management practices.
The TRUST Act, more specifically:
Updates Threshold – Increases the threshold for well-managed institutions to qualify for an extended 18-month examination cycle from $3 billion to $6 billion in total assets.
Safety and Soundness – Maintains all existing safety and soundness requirements, ensuring only qualifying, well-capitalized, and well-managed banks benefit from the extension.
Right-sizes Examiner Capacity – Frees up examiner resources to focus on riskier or larger institutions without weakening oversight of smaller banks.
Conforms FDIC Act – Further aligns the Federal Deposit Insurance Act with the intent of the bill and provides greater flexibility to the FDIC.
The TRUST Act passed with unanimous bipartisan support out of the House Financial Services Committee (48-0) and was included in the Housing for the 21st Century Act, which passed the House of Representatives earlier this week, Monday, February 9, 2026.
