What Happened?

The U.S. has lost 4,555 banks since 2005, and community banks say federal rules built for Wall Street giants are speeding that decline. The Main Street Capital Access Act would change how federal regulators oversee smaller lenders, adjusting capital thresholds for inflation, easing requirements for newly chartered banks, and requiring regulators to tailor rules to actual risk rather than asset size. The House passed the bill in July 270 to 155, with bipartisan support, but it has stalled in the Senate. [](#ngr-4bf4c220-8427-43d7-8b9d-09b7c6fe8a09)

On Sept. 18, four witnesses testified before a House subcommittee in Richmond, Ky., pressing Congress to act before it adjourns. The Trump administration backs the bill.

Why Does it Matter to Me?

Community banks hold only about 15 percent of total U.S. banking assets, but they make nearly 40 percent of all small business loans. In many rural counties, they are the only bank in town.

Witnesses at the hearing said the current rules make it harder to open a new bank and push smaller lenders toward mergers. One witness, Kyle Aud, said he started the chartering process in June 2025 and it was not until early 2026 that he felt confident his bank would actually open. An affordable housing developer, Zach Worsham of Winterwood Inc., which manages more than 14,000 apartments across eight states, testified that virtually all his financing comes from community banks. Fewer community banks, he said, means fewer loans for affordable housing construction.

Both Sides, Now

Supporters of the bill argue that rules written for trillion-dollar institutions do not fit small-town lenders that pose no broad financial risk. "Regulation should follow risk, not size, zip code, or political fashion," said Rep. Andy Barr (R-KY), the Kentucky Republican who chairs the subcommittee and organized the hearing. The American Bankers Association and 52 state bankers associations backed the House version, joined by more than 100 organizations.

The hearing, though, was one-sided by design. No consumer advocates, community development groups, or federal regulators appeared to raise concerns about loosening oversight. While 56 Democrats voted for the House bill, 154 opposed it. Critics of deregulation have argued that easing capital rules, even for smaller banks, can reduce the financial cushion those institutions hold against losses, though no opposing witnesses made that case at this hearing. The Senate has not scheduled a vote or a committee review session.

What Happens Next?

Rep. Barr urged the Senate to act before Congress adjourns, calling community banks "the financial infrastructure of rural America." No Senate vote or committee review has been scheduled as of this writing. Without Senate action, the bill dies when the current Congress ends. Members had five legislative days from the Sept. 18 hearing to submit additional materials for the record, but that window closes without any guarantee of further movement.

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This article was generated by AI pulling from data. Each article is edited by an editor for accuracy and clarity.

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