Promoting Access to Capital in Underbanked Communities Act of 2023

Promoting Access to Capital in Underbanked Communities Act of 2023

This bill eliminates and reduces certain requirements applicable to new financial institutions, certain rural community banks, and federal savings associations.

Federal banking agencies must issue rules allowing new financial institutions three years to meet capital requirements. During this period, a financial institution may request to deviate from an approved business plan and the appropriate agency has 30 days to approve or deny the request.

In addition, the community bank leverage ratio—a way of evaluating debt levels—is reduced for certain rural community banks. Specifically, new rural community banks must have a ratio of 8%, with a three-year phase-in of the rate. Currently, the ratio is 9%.

Finally, the bill removes certain restrictions to allow federal savings associations to invest in, sell, or otherwise deal in agricultural loans.

Bill 118 hr 758, also known as the Promoting Access to Capital in Underbanked Communities Act of 2023, aims to address the issue of limited access to financial services in underbanked communities across the United States. The bill recognizes that many individuals and small businesses in these communities face barriers to obtaining loans and other financial resources, which can hinder their ability to grow and thrive economically.

The key provisions of the bill include the establishment of a grant program to support community financial institutions that serve underbanked communities. These grants would be used to help these institutions expand their capacity to provide loans and other financial services to individuals and businesses in need. Additionally, the bill calls for the creation of a task force to study and make recommendations on how to improve access to capital in underbanked communities.

Furthermore, the bill includes measures to increase transparency and accountability in the financial services industry, with a focus on ensuring that underbanked communities are not unfairly targeted or discriminated against. This includes provisions to strengthen consumer protections and promote fair lending practices. Overall, the Promoting Access to Capital in Underbanked Communities Act of 2023 seeks to address the systemic barriers that prevent individuals and businesses in underbanked communities from accessing the financial resources they need to succeed. By supporting community financial institutions, promoting transparency and accountability, and fostering a more inclusive financial system, the bill aims to create opportunities for economic growth and prosperity in these underserved communities.