H.R. 4478 — TRUST Act
Executive Summary
The TRUST Act of 2025 (H.R. 4478) amends the Federal Deposit Insurance Act to raise the asset threshold for qualifying, well-managed insured depository institutions eligible for an extended 18-month examination cycle from $3 billion to $6 billion. Currently, banks with assets between $3 billion and $6 billion face more frequent, burdensome 12-month exam cycles despite being well-capitalized and well-managed. By doubling the threshold, this bipartisan bill provides regulatory relief to community and mid-sized banks, allowing federal banking agencies to allocate supervisory resources toward higher-risk institutions.
Arguments For
- Reduces compliance costs and administrative burdens for well-managed community and mid-sized banks, allowing them to focus resources on lending and local economic growth.
- Optimizes federal banking agency resources (FDIC, OCC, Federal Reserve) by shifting examiner focus away from low-risk, well-capitalized institutions toward higher-risk or problematic banks.
Likely Supporters
Arguments Against
- Critics may argue that reducing examination frequency for banks up to $6 billion increases systemic risk, especially in the wake of recent mid-sized bank failures where rapid deterioration occurred between exam cycles.
- Opponents might frame this as deregulation that weakens oversight of financial institutions holding billions in consumer deposits.
Likely Opponents
📋 Key Provisions
- Increases the total asset threshold for well-managed insured depository institutions to qualify for an 18-month examination cycle from $3 billion to $6 billion.
- Amends Section 10(d) of the Federal Deposit Insurance Act (12 U.S.C. 1820(d)) paragraphs (4)(A) and (10) to reflect the new $6 billion threshold.
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Establishes the short title as the TRUST Act of 2025.
"‘‘TRUST Act of 2025’’."
Raises the examination cycle threshold in paragraph (4)(A) from $3 billion to $6 billion.
"‘‘$3,000,000,000’’ and inserting ‘‘$6,000,000,000’’;"
Raises the examination cycle threshold in paragraph (10) from $3 billion to $6 billion.
"‘‘$3,000,000,000’’ and inserting ‘‘$6,000,000,000’’."