The U.S. Federal Reserve is working on a proposal to increase the asset thresholds that trigger stricter regulatory oversight for large banks. According to four people familiar with the matter, the plan would reindex these triggers to account for inflation and economic growth, potentially allowing some lenders to avoid specific high-cost compliance requirements and encouraging mergers within the industry.
The current regulatory framework applies increasingly stringent rules as banks reach asset levels of $100 billion, $250 billion, and $700 billion. These rules include stress tests, enhanced liquidity standards, and daily reporting to supervisors. Banks have argued that these fixed dollar amounts have not kept pace with the expansion of the U.S. economy, leading to oversight that exceeds their actual risk profiles.
Under the reported plan, the highest threshold could rise from $700 billion to approximately $960 billion, while the lower trigger for additional Fed requirements could move from $100 billion toward $150 billion. Lenders such as U.S. Bancorp, Capital One, PNC Financial, and Truist currently sit near the $700 billion mark and would gain more room to grow without facing the toughest supervision. Smaller lenders like Western Alliance and Zions could potentially expand past $100 billion without incurring all existing requirements for that category.
The scale of the impact is reflected in the shift of hundreds of billions of dollars in assets across regulatory tiers. Moving the top threshold from $700 billion to $960 billion would create a roughly $260 billion buffer for the nation's largest regional lenders. For a mid-sized bank, avoiding the compliance costs associated with the $100 billion tier could save "tens of millions" of dollars per year. The change could also end a "holding pattern" for bank mergers; for context, banks with $50 billion to $700 billion in assets announced only 33 acquisitions over the last decade, including Fifth Third's $10.9 billion purchase of Comerica in 2025.
If implemented, the reindexing could lead to a wave of consolidation as banks that previously feared the regulatory costs of growth seek out merger partners. This could result in fewer, larger regional banks, which critics argue harms consumers by reducing competition and services. The plan is part of a broader effort by the administration of President Donald Trump to reform bank oversight which officials say is stifling lending and the economy. While the Fed spokesperson declined to comment, three sources indicated the central bank could formally propose these changes later this year. A proposal would typically be followed by a public comment period before any final rule is adopted.