I 
109TH CONGRESS 
1ST SESSION H. R. 2061 
To enhance the ability of community banks to foster economic growth and 
serve their communities, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 3, 2005 
Mr. RYUN of Kansas (for himself and Mr. CANNON) introduced the following 
bill; which was referred to the Committee on Financial Services, and in 
addition to the Committee on Ways and Means, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To enhance the ability of community banks to foster eco-
nomic growth and serve their communities, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Community Banks 
Serving Their Communities First Act’’ or the ‘‘Commu-
nities First Act’’. 
VerDate Aug 04 2004 
23:48 May 10, 2005
Jkt 039200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H2061.IH
H2061
TITLE 
I—TARGETED 
REGU-
LATORY RELIEF FOR COMMU-
NITY BANKS 
SEC. 101. INCREASE EXEMPTION LEVELS UNDER THE 
HOME MORTGAGE DISCLOSURE ACT OF 1975. 
(a) DEPOSITORY
INSTITUTION
AND
MORTGAGE 
LENDER DISCLOSURE EXEMPTIONS.—Section 304(i) of 
the Home Mortgage Disclosure Act (12 U.S.C. 2803(i)) 
is amended by striking ‘‘$30,000,000’’ and inserting 
‘‘$250,000,000’’. 
(b) DEPOSITORY INSTITUTION EXEMPTIONS FROM 
ACT.—Section 309 of the Home Mortgage Disclosure Act 
(12 U.S.C. 2808(a)) is amended— 
(1) 
in 
subsection 
(a), 
by 
striking 
‘‘$10,000,000’’ and inserting ‘‘$250,000,000’’; and 
(2) in subsection (b), by adding at the end the 
following new paragraph: 
‘‘(4) INDEXING
OF
DEPOSITORY
INSTITUTION 
DISCLOSURE
EXEMPTION
AMOUNT.—By December 
31 of each year beginning after the date of the en-
actment of the Community Banks Serving Their 
Communities First Act, the amount applicable under 
section 304(i) with respect to institutions described 
in section 303(2) shall be adjusted in accordance 
with the procedure described in paragraphs (1) and 
VerDate Aug 04 2004 
23:48 May 10, 2005
Jkt 039200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H2061.IH
H2061
(3) and the adjusted amount shall apply during the 
subsequent year.’’. 
SEC. 102. SHORT FORM REPORTS OF CONDITION FOR CER-
TAIN COMMUNITY BANKS. 
Section 7(a) of the Federal Deposit Insurance Act 
(12 U.S.C. 1817(a)) is amended by adding at the end the 
following new paragraph: 
‘‘(11) SHORT
FORM
REPORTS
OF
CONDITION 
FOR COMMUNITY BANKS.—An insured depository in-
stitution described in subparagraphs (A), (B), (C), 
and (D) of section 10(d)(4) may submit a short 
form report of condition under paragraph (3) in 2 
nonsequential quarters of any calendar year.’’. 
SEC. 103. COMMUNITY BANK EXEMPTION FROM ANNUAL 
MANAGEMENT ASSESSMENT OF INTERNAL 
CONTROLS 
REQUIREMENT 
OF 
THE 
SAR-
BANES-OXLEY ACT OF 2002. 
Section 404 of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7262) is amended by adding the following new sub-
section: 
‘‘(c) COMMUNITY BANK EXEMPTION.— 
‘‘(1) IN GENERAL.—This section shall not apply 
in any year to any insured depository institution 
which, as of the close of the preceding year, had 
VerDate Aug 04 2004 
23:48 May 10, 2005
Jkt 039200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H2061.IH
H2061
total assets, as determined on a consolidated basis, 
of $1,000,000,000 or less. 
‘‘(2) ADJUSTMENT OF AMOUNT.—The Commis-
sion shall annually adjust the dollar amount in para-
graph (1) by an amount equal to the percentage in-
crease, for the most recent year, in total assets held 
by all depository institutions, as reported by the 
Federal Deposit Insurance Corporation.’’. 
SEC. 104. CHANGES REQUIRED TO SMALL BANK HOLDING 
COMPANY POLICY STATEMENT ON ASSESS-
MENT OF FINANCIAL AND MANAGERIAL FAC-
TORS. 
(a) SMALL
BANK
HOLDING
COMPANY
POLICY 
STATEMENT ON ASSESSMENT OF FINANCIAL AND MANA-
GERIAL FACTORS.— 
(1) IN GENERAL.—Before the end of the 6- 
month period beginning on the date of the enact-
ment of this Act, the Board of Governors of the 
Federal Reserve System shall publish in the Federal 
Register proposed revisions to the Small Bank Hold-
ing Company Policy Statement on Assessment of Fi-
nancial and Managerial Factors (12 C.F.R. part 
225—appendix C) that provide that the policy shall 
apply to a bank holding company which has pro 
VerDate Aug 04 2004 
23:48 May 10, 2005
Jkt 039200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H2061.IH
H2061
forma 
consolidated 
assets 
of 
less 
than 
$1,000,000,000 and that— 
(A) is not engaged in any nonbanking ac-
tivities involving significant leverage; and 
(B) does not have a significant amount of 
outstanding debt that is held by the general 
public. 
(2) ADJUSTMENT OF AMOUNT.—The Board of 
Governors of the Federal Reserve System shall an-
nually adjust the dollar amount referred to in para-
graph (1) in the Small Bank Holding Company Pol-
icy Statement on Assessment of Financial and Man-
agerial Factors by an amount equal to the percent-
age increase, for the most recent year, in total assets 
held by all bank holding companies, on a consoli-
dated basis, as determined by the Board. 
(b) INCREASE IN DEBT-TO-EQUITY RATIO OF SMALL 
BANK HOLDING COMPANY.—Before the end of the 6- 
month period beginning on the date of the enactment of 
this Act, the Board of Governors of the Federal Reserve 
System shall publish in the Federal Register proposed re-
visions to the Small Bank Holding Company Policy State-
ment on Assessment of Financial and Managerial Factors 
(12 C.F.R. part 225—appendix C) such that the debt-to- 
equity ratio allowable for a small bank holding company 
VerDate Aug 04 2004 
23:48 May 10, 2005
Jkt 039200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H2061.IH
H2061