meta_id 3367953

On July 31, 2026, the Federal Reserve Board (FRB) requested comment on a proposal to modernize rules governing mutual banking organizations. Mutual banks are owned by depositors rather than shareholders, with more than 90 percent holding less than $3 billion in total assets. The FRB assumed regulatory and supervisory authority over mutual banks from the Office of Thrift Supervision in 2011. The existing rules, first established in 1993, have not been updated for 30 years and have become overly burdensome and complex. The proposal aims to modernize the regulatory framework and increase flexibility for mutual banks to raise capital. Key changes include clarifying which instruments count as regulatory capital and reducing procedural burdens across the framework. The modernization is intended to allow mutual banks to continue growing and more effectively serve communities across the country while preserving their unique depositor-owned structure. Federal Reserve Vice Chair for Supervision Michelle W. Bowman said the proposal represents "an important step in our work to modernize the bank regulatory framework" and that the continued success of the mutual bank model "contributes to the institutional diversity of the U.S. banking system, which is one of the greatest strengths of our financial system." The comment period closes 60 days after publication in the Federal Register. Interested parties should submit responses within this timeframe. The FRB has published a Federal Register notice titled "Regulatory Modernization and Relief for Mutual Holding Companies" and a supporting board memo providing additional details on the proposal.