this group to submit your views and comments on these proposals. it is important for the federal reserve and other regulatory agencies to receive input directly from community bankers. one of these important proposals is to implement the community bank leverage ratio. while the community bank leverage ratio proposal would increase the minimum leverage ratio for banks that opt in to the new framework, the proposal would allow qualifying community banks to opt out of the more complicated risk - based capital framework. other proposals include raising to $ 400, 000 the threshold for determining when an appraisal is required for a residential real estate transaction, and excluding community banks from the volcker rule. the federal reserve also acted to raise the asset threshold from $ 1 billion to $ 3 billion of total consolidated assets for the small bank holding company and savings and loan holding company policy statement. this change allows more banking companies that have limited access to the capital markets to take advantage of using debt in bank acquisitions. this helps foster local ownership of small banks. the change also exempts eligible small holding companies from consolidated risk - based capital rules, a significant burden reduction. in december, the federal banking agencies issued a final rule allowing qualifying insured depository institutions with less than $ 3 billion in total assets to benefit from an extended 18month on - site examination cycle. this increases the former threshold of $ 1 billion and provides examination burden relief to a substantial number of community banks with relatively simple risk profiles. with respect to supervision, the federal reserve continues to tailor and reduce burden by conducting portions of community bank examinations offsite. however, we also understand the importance of face - to - face interaction and continue to be responsive to bankers ’ requests for onsite examinations. the federal reserve has also implemented a risk - focused supervisory program — the bank exams tailored to risk ( betr ) program — which aims to identify low - risk activities within state member banks and apply appropriately streamlined examination work programs to these activities, and conversely, to identify high - risk activities within state member banks for prompt supervisory attention. this enhanced tailoring of supervision minimizes regulatory burden for the many community banks that are well managed, and directs supervisory resources to higher - risk activities where they are most needed to contain the risks that can result from aggressive banking strategies. similarly, the federal reserve tailors its supervision of holding companies based on the size, complexity, and risk profile of each institution. closing remarks as i conclude, i would emphasize how crucial it is to balance effective regulation and supervision to ensure the safety and

michelle w bowman : a conversation on community banking speech by ms michelle w bowman, member of the board of governors of the federal reserve system, at the conference for community bankers, sponsored by the american bankers association, san diego, california, 11 february 2019. * * * good morning. it is a pleasure to be here today to talk about the federal reserve ’ s commitment to and oversight of community banking. i appreciate the invitation to attend the american bankers association ’ s conference for community bankers, as community banking has been a focus of my career and plays a vital role in supporting our economy. i believe it is particularly important to bring together community bankers at conferences like this to discuss issues impacting your banks and the communities that you serve. as many of you know, before joining the federal reserve, i was a community banker and more recently had the privilege to serve as the kansas state bank commissioner. while i ’ m not the first community banker to serve on the board, i now have the honor of being the first governor to fill the role designated for someone with community banking experience on the federal reserve board, a position that was created by statute in 2015. 1 i plan to fulfill this unique responsibility by traveling widely and listening closely to community bankers, consumers, small business owners, community leaders — all of the stakeholders with an interest in this area. i will take back the knowledge i gain from these discussions and use it to improve our work. and in the process, i hope to help you better understand what the federal reserve is doing and what we are trying to accomplish. in doing so, i am confident our work will be more effective and efficient. as you all know well, community banks are a critical engine of the economy, and they play a key role in providing access to credit in communities of all sizes — big, small, rural, and every size in between. community bankers not only assist in making people ’ s dreams come true — whether the dream is starting a small business, buying a home or farm, or financing a car. they also provide critical leadership in their communities in many ways — including serving on local boards of schools and hospitals, donating to nonprofits, and volunteering in the community. for all of these reasons, and more, i firmly believe a thriving community banking sector is important to the health of the economy. like many of you, i witnessed firsthand how community banks were significantly affected by the global financial crisis, a crisis they did not cause. in my