Fed Proposes Modernizing Mutual Bank Capital Rules

• The Federal Reserve Board requested comment on a proposal to modernize rules for mutual banking organizations.
• Mutual bank rules were established in 1993 and had not been updated, proving overly burdensome and complex.
• More than 90 percent of mutual banking organizations have less than $3 billion in total assets.
• The comment period closes 60 days after publication in the Federal Register.

Fed Targets Decades-Old Rules for Mutual Banks

The Federal Reserve Board announced that it requested comment on a proposal to modernize rules for mutual banking organizations. The announcement was made via a press release published on July 31, 2026 at 10:00 a.m. EDT. The associated Federal Register notice is titled "Regulatory Modernization and Relief for Mutual Holding Companies".

Fed Proposes Modernizing Mutual Bank Capital Rules

Why the Rules Are Being Updated

Mutual bank rules were established in 1993 and have not been updated since, proving overly burdensome and complex. Mutual banking organizations are owned by depositors rather than shareholders. More than 90 percent of mutual banking organizations have less than $3 billion in total assets. The Federal Reserve Board assumed authority over these institutions in 2011.

What the Proposal Does

The proposal's stated purpose is to modernize the framework and increase flexibility for certain mutual banks to raise capital. It clarifies which instruments count as regulatory capital. It also reduces procedural burdens.

Comment Period

The comment period on the proposal closes 60 days after publication in the Federal Register.

Statements From the Fed

Today's proposal is another important step in our work to modernize the bank regulatory framework by updating mutual bank regulations for the first time in 30 years.

— Michelle W. Bowman, Vice Chair for Supervision

This proposal will allow mutual banks to continue to grow and more effectively serve communities across the country, while preserving their unique depositor-owned structure.

— Michelle W. Bowman, Vice Chair for Supervision

The continued success of this model contributes to the institutional diversity of the U.S. banking system, which is one of the greatest strengths of our financial system.

— Michelle W. Bowman, Vice Chair for Supervision

Media Contact

Inquiries can be directed to the Federal Reserve Board media office at 202-452-2955.