On April 23, the Fed, OCC and FDIC announced the finalization of a rule jointly proposed in November 2025 (covered by InfoBytes here) to modify the Community Bank Leverage Ratio (CBLR) framework. The final rule, adopted without change from the proposal, lowers the CBLR requirement from 9 percent to 8 percent and extends the grace period for banks that temporarily fall out of compliance from two quarters to four quarters, subject to a limit of eight quarters in the previous five-year period. The agencies stated that the rule aims to provide community banks with greater flexibility to opt into the simplified framework, which allows qualifying institutions with less than $10 billion in total consolidated assets to use a leverage ratio rather than calculating and reporting risk-based capital ratios. According to the agencies, the changes reduce regulatory burden while maintaining capital standards that support safety and soundness. Under the opt-in framework, community banks must maintain a leverage ratio “significantly higher than the leverage ratio standard otherwise applicable to community banks” but are deemed to have met otherwise applicable risk-based capital requirements. The final rule takes effect July 1.