Main Street Capital Access (“Main Street”) Act H.R. 6955, the Main Street Capital Access Act, introduced by Chairman French Hill (AR-02) and Subcommittee on Financial Institutions Chairman Andy Barr (KY-06), revitalizes local bank formation and ensures that community lenders can focus on serving families, small businesses, and local economies, making life more affordable for Americans and empowering Main Street. Why Is The Main Street Act Needed? • The Dodd-Frank Act subjected many community and mid-sized banks to the same rules designed for the largest, most systemically important institutions, which has stifled local lending, constrained economic growth, accelerated industry consolidation, and pushed activity outside of the banking sector. • The bipartisan consensus to tailor bank regulation based on an institution’s risk profile and business model, which President Trump pioneered during his first term, was abandoned and reversed during the Biden Administration. • Bank regulation and supervision were weaponized leading to the debanking of lawabiding businesses and individuals. • New bank formation has disappeared in the U.S. This lack of “de novo” or “new” bank activity, coupled with “banking deserts” that are common in rural areas, has led to higher costs for households and less access to capital and investment for small and mediumsized businesses. The Main Street Act Restores Regulatory Fairness, Transparency, and Right-Sizing: • Brings common-sense tailoring back to bank regulation and prevents the U.S. from ending up with a “barbell” banking system with only very large and very small banks. • Stops debanking once and for all, prohibits the use of reputational risk in examinations, and focuses bank supervision on material risks related to safety and soundness. • Restores U.S. sovereignty over domestic financial regulation through greater oversight and transparency of how Federal banking regulators engage with international organizations. • Indexes various asset-based thresholds for bank regulations to nominal GDP. The Main Street Act Promotes a Healthy, Growing, and Competitive Banking Industry: • Lowers the significant barriers to entry for new banks by phasing-in capital requirements and providing certainty around regulatory approval of mergers and acquisitions. • Fixes the bank resolution framework for failed banks to promote competition and limit market concentration in the banking sector, while protecting depositors and the economy. The Main Street Act Improves Access to Funding and Capital for Small to Mid-Size Banks: • Helps banks attract, retain, and diversify their funding sources to better serve American families and small businesses through greater use of reciprocal and custodial deposits. • Improves the Community Bank Leverage Ratio framework to encourage more institutions to opt-into the framework and allow well-managed community banks to maintain safe capital levels without being subject to unnecessarily complex risk-based capital rules.
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