Catenaa, Friday, September 25, 2026- The US Federal Reserve is planning on raise the asset thresholds for big banks to increase regulatory requirements.
Quoting Sources, Reuters said that the Federal Reserve is expected to soon propose reindexing the thresholds at which banks become subject to stress tests of their balance sheets, liquidity, capital, and other more stringent rules, to account for inflation and economic growth in 2026.
Under the current rules set in 2019, a bank faces increased requirements when it reaches $100 billion in assets, which tightens even more at $250 billion in assets and $700 billion in assets.
US lenders say those thresholds are now outdated and have not kept up with the pace at which the economy has grown since 2019, especially with AI spending, and have put banks under stringent oversight that exceeds the risks they pose.
According to Reuters, the Fed envisions moving the top cutoff toward $1 trillion while nudging certain obligations linked to the lower tier up to around $150 billion.
Using nominal GDP as the reindexing basis, a method Fed Vice Chair for Supervision Michelle Bowman suggested in January, could push the highest threshold to around $960 billion and the lower threshold for additional Fed requirements to roughly $150 billion.
Reuters reports suggest that US Bancorp, Capital One, PNC Financial, and Truist are among the banks to stand to benefit, as they are closest to the $700 billion threshold, giving them more room to grow without incurring tougher Fed oversight, including aspects of new incoming capital rules and daily reporting requirements to supervisors.
Western Alliance, Zions, and a handful of peers would be able to expand past the $100 billion mark without taking on the full suite of obligations that currently attach at that level.
Pinnacle Financial Partners and a handful of other lenders with assets in the $100 billion to $150 billion range might even see some of their current requirements fall away.
“The US economy has grown significantly over the past seven years, and it makes sense to have rules for all banks that will help consumers and small businesses through increased bank lending capacity and more competition,” a US Bancorp spokesperson told Reuters.
Reuters also said that these changes to asset thresholds are part of a broader plan by President Donald Trump’s administration to reform bank oversight, which officials say is stifling lending and the economy. Bowman is also overhauling capital rules and other aspects of the Fed’s supervisory regime.
“The changes could lead to a wave of consolidation among mid-size lenders which have been holding off for fear of breaching the thresholds,” sources told Reuters.
Banks with $50 billion to $700 billion of assets announced just 33 bank and thrift acquisitions over the past decade, according to S&P Global Market Intelligence, with just seven such deals last year, including Fifth Third’s $10.9 billion acquisition of Comerica.
