Federal Bill of the Month – July 2026: H.R. 6955 – Main Street Capital Access Act

Introduced by House Financial Services Committee Chairman French Hill (R-Ark.) and Subcommittee on Financial Institutions Chairman Andy Barr (R-Ky.) and passed by the House on July 21, H.R. 6955—the Main Street Capital Access Act—is a vital step toward modernizing America’s banking regulatory framework, curbing regulatory overreach, and bolstering local community banks that fuel small-business growth across America.

Since the enactment of the Dodd-Frank Act in 2010, community financial institutions have been buried under an avalanche of rigid federal regulations ostensibly put into place to curb risky behaviors. This escalating compliance burden has imposed immense costs on smaller institutions, driving artificial industry consolidation and dramatically slowing the creation of new banks. According to a 2018 analysis by George Mason University scholar Thomas Stratmann, “Dodd-Frank significantly affects small banks and their customers. A large majority of [small bank survey] respondents viewed Dodd-Frank as more burdensome than the Bank Secrecy Act [BSA], and the participating banks reported substantially increased compliance costs in the wake of new regulations.” When Washington heaps onerous rules onto local credit unions and community banks, compliance budgets skyrocket while main street entrepreneurs, farmers, and working families face dwindling credit options and higher borrowing costs.

The Main Street Capital Access Act fixes this broken status quo by appropriately tailoring financial regulations, boosting transparency in supervision, and removing costly red tape:

• Spurring New Bank Formation: The bill establishes a three-year phase-in period for newly chartered institutions to meet federal capital requirements and lowers the Community Bank Leverage Ratio for rural financial institutions, giving new community banks room to grow and serve underbanked areas.
• Objective and Transparent Supervision: H.R. 6955 reforms the current subjective supervisory rating system by directing the Federal Financial Institutions Examination Council to institute clear, measurable standards for risk governance and eliminate arbitrary examiner evaluations.
• Predictable Bank Mergers and Competition: Through incorporated measures like Rep. Scott Fitzgerald’s (R-Wis.) Bank Competition Modernization Act and Merger Agreement Approvals Clarity and Predictability Act, the bill sets a 90-day deadline for regulatory merger and acquisition decisions, establishes a $10 billion asset safe-harbor from duplicative Department of Justice competition reviews, and prevents regulators from imposing political or non-statutory conditions on approvals.
• Right-Sizing Capital and Liquidity: The legislation modernizes access to the Federal Reserve’s discount window, expands exemptions for reciprocal and custodial deposits, and mandates that federal regulators evaluate an institution’s specific risk profile and business model before imposing new rules.
• Ending Reputational Risk Standards: The bill explicitly prohibits federal banking agencies from using reputational risk as a standard or factor in bank supervision and examinations. As Michelle W. Bowman, Vice Chair for Supervision of the Federal Reserve Board of Governors, rightly notes, “We have heard troubling cases of debanking—where supervisors use concerns about reputation risk to pressure financial institutions to debank customers because of their political views, religious beliefs, or involvement in disfavored but lawful businesses. Discrimination by financial institutions on these bases is unlawful and does not have a role in the Federal Reserve’s supervisory framework.” In April, the Taxpayers Protection Alliance (TPA) wrote to the Federal Reserve applauding the institution for pursuing rulemaking to remove reputation risk as a component of examination programs in its supervision of banks.

Tailoring and right-sizing bank regulation reduces unnecessary administrative expenses and ensures that financial institutions can focus their resources on serving communities rather than paying armies of compliance lawyers. Reining in unelected financial regulators protects consumers, promotes financial sector competition, and safeguards taxpayers from systemic economic risks.

For these reasons, TPA is pleased to make H.R. 6955 its Federal Bill of the Month for July 2026.