"The proposal, outlined in the Federal Register, would also extend from two to four quarters the period that banks can remain in the CBLR framework without meeting all qualifying criteria. Comments on the proposed rule are due Jan. 30, 2026. In its latest advocacy update, released on Monday, the Mortgage Bankers Association noted that it has long supported the CBLR, arguing that it provides regulatory relief for banks that opt in by removing the need to calculate and report risk-based capital ratios."
"MBA wrote in a comment letter in October that the ratio should be lowered to 8%, and that banks should have a longer grace period to regain compliance or exit the framework. Adopted in 2019, the CBLR allows banks that opt in to avoid calculating and reporting more complex risk-based capital ratios. The agencies said in the Federal Register announcement that the proposed adjustments provide community banks with enhanced options to manage their regulatory obligations while maintaining their ability to serve their communities."
The Federal Register proposal would extend the period banks can remain in the CBLR framework from two to four quarters without meeting all qualifying criteria. Comments on the proposed rule are due Jan. 30, 2026. The Mortgage Bankers Association supports the CBLR and urged lowering the qualifying ratio to 8% and lengthening the grace period to regain compliance or exit. Adopted in 2019, the CBLR lets opting banks avoid calculating and reporting complex risk-based capital ratios. Agencies state the adjustments give community banks enhanced options to manage regulatory obligations while continuing to serve communities.
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