WASHINGTON (February 11, 2026) – Senator John Kennedy (R-La.), a member of the Senate Banking Committee, today joined Sensators Ted Budd (R-N.C.), Andy Kim (D-N.J.), and Angela Alsobrooks (D-Md.) in introducing the Tailored Regulatory Updates for Supervisory Testing (TRUST) Act.
Currently, banks with more than $3 billion in assets are subject to “full-scope” on-site examinations every 12 months, rather than the more lenient 18-month timeline regulators give many banks with fewer assets.
Requiring a demanding examination process on a twelve-month basis creates a significant regulatory burden for small community banks.
By raising the threshold to $6 billion to reflect inflation, the TRUST Act would allow a larger number of community banks to be examined every 18 months. This change would help the government use its resources more efficiently and offer relief to many community banks across the country.
“Because Washington rules haven’t kept up with inflation, many community banks are tied up in unnecessarily frequent examinations. That isn’t right. Our TRUST Act would update the law to free many community banks from a pointlessly high regulatory burden and let the government use taxpayer money more efficiently,” said Kennedy.
“The federal regulatory threshold for well-managed institutions has failed to keep up with inflation, industry consolidation, and modern risk management practices, and as a result has sacrificed both the resources and efficiency of our community banks. Increasing the statutory 18-month exam cycle asset threshold for community banks would free these small, low-risk institutions to do what they do best—provide financial resources to their communities, such as lending more to small businesses and offering more mortgages and private loans. The TRUST Act delivers responsible regulatory reforms that cut unnecessary red tape and modernize federal bank supervision,” said Budd.
“For rural and small towns left behind in bank deserts like we have in South Jersey, community banks are a game changer – driving economic and community development and supporting our small businesses and entire local economies. By uplifting the promise of community banking in this legislation, we give working families greater flexibility and help unlock paths to buying a home, new jobs, and the greater economic stability they deserve,” said Kim.
“Our local businesses, homebuyers, and farmers depend on community banks to get the capital they need. Maintaining rigorous oversight while modernizing the exam process allows well-managed, low-risk institutions to grow responsibly and continue investing in the communities they serve. I’m proud to join this bipartisan, commonsense legislation,” said Alsobrooks.
Reps. Tim Moore (R-N.C.) and Ritchie Torres (D-N.Y.) introduced the companion bill in the U.S. House of Representatives, which passed the House Financial Services Committee in a 48-0 vote.
“Community banks and credit unions are essential to the success of our local economies as they’re the place where folks turn when they need help buying a home or starting a business. Local financial institutions shouldn’t be hindered by one-size-fits-all regulations that treat them like major banking corporations. I’m proud to work with Senator Budd on the TRUST Act to ensure these banks have the flexibility to focus on serving hardworking families and building new opportunities for economic growth,” said Moore.
“Community banks play an essential role in expanding access to capital, supporting small businesses, and strengthening local economies, especially in communities like the Bronx where neighborhood institutions are often the first stop for entrepreneurs, homeowners, and working families. The TRUST Act is a commonsense, bipartisan update that allows regulators to focus their attention where the risk is greatest while giving well-managed institutions more room to serve their customers. By modernizing outdated thresholds without compromising safety and soundness, we can make oversight more effective and ensure our financial system works for communities like NY-15 that depend on strong, local banking relationships to grow and thrive,” said Torres.
The American Bankers Association, Independent Community Bankers of America, and the American Fintech Council support the TRUST Act.
View the full bill text here.
