The 21st Century ROAD to Housing Act introduces a wide-ranging package of banking and housing measures. While much of the attention has focused on increasing the nation’s housing supply, the law also introduces several targeted regulatory changes affecting community banks and credit unions.
Some provisions apply only to banks or only to credit unions. Others affect both. Together, they aim to reduce certain administrative requirements, support new financial institutions, and create conditions that could expand lending opportunities over time.
Here are five changes community financial institutions should know about.
Editor’s Note: This article summarizes selected provisions of the 21st Century ROAD to Housing Act that are most relevant to community banks and credit unions. It is intended for informational purposes only and should not be considered legal, regulatory, or compliance advice. Financial institutions should consult their legal counsel and seek regulatory guidance when evaluating how the law applies to their organization.
1. More Community Banks May Qualify for an 18-Month Examination Cycle
One of the law’s community banking provisions expands eligibility for the 18-month examination cycle for qualifying community banks.
The ROAD to Housing Act raises the asset threshold from less than $3 billion to less than $6 billion, allowing additional qualifying, well-capitalized and well-managed community banks to become eligible for an 18-month full-scope, on-site examination cycle.
What the Law Says
The act amends the Federal Deposit Insurance Act by increasing the qualifying asset threshold for the 18-month examination cycle from “$3,000,000,000” to “$6,000,000,000.”
What It Means
More qualifying community banks may become eligible for an 18-month examination schedule rather than annual examinations, while remaining subject to the same supervisory standards.
2. Community Banks Gain Additional Deposit Flexibility
Several provisions specifically benefit community banks by changing how certain deposits are treated under federal banking rules.
The law creates a new exception allowing eligible community banks to accept qualifying custodial deposits without brokered-deposit treatment, subject to statutory limits. It also expands the amount of qualifying reciprocal deposits excluded from that classification.
Together, these provisions give qualifying community banks greater flexibility in how eligible custodial and reciprocal deposits are treated under federal banking rules.
What the Law Says
The act creates a “limited exception for custodial deposits” and expands the amount of reciprocal deposits that “shall not be considered… funds obtained, directly or indirectly, by or through a deposit broker.”
What It Means
Some community banks may accept more qualifying custodial and reciprocal deposits without those funds being treated as brokered deposits under federal banking rules, subject to the law’s eligibility requirements.
3. Qualifying Federal Credit Unions Gain More Flexible Board Requirements
The legislation also includes a governance change affecting some federal credit unions.
Qualifying federal credit unions that meet applicable supervisory standards may reduce required board meetings from monthly to six meetings each year, provided they continue to meet at least once each fiscal quarter.
What the Law Says
The act amends the Federal Credit Union Act, permitting qualifying federal credit union boards to meet “not less than six times annually, with at least one meeting held during each fiscal quarter.”
What It Means
Qualifying federal credit unions gain more flexibility in scheduling board meetings while maintaining regular board oversight.
4. Forming New Community Institutions May Become Easier
The law includes two separate initiatives designed to encourage the formation of new community financial institutions.
First, federal regulators are directed to review application forms with the goal of streamlining the charter process, reduce unnecessary or duplicative information requests where practical, and provide additional guidance throughout the application process.
Applicants may also request a dedicated regulatory caseworker to serve as a primary point of contact during the application process.
Separately, the law authorizes federal banking agencies to establish a temporary pilot program allowing certain newly chartered community banks to phase in applicable capital requirements during their early years.
What the Law Says
Federal regulators must review application forms “for the purpose of streamlining the process,” reduce unnecessary information requests “to the extent practicable,” and designate a regulatory “caseworker” upon request.
What It Means
Organizers of new banks and credit unions should encounter a clearer application process with more direct guidance from federal regulators. If federal banking agencies implement the authorized pilot program, certain newly chartered community banks could also receive additional flexibility as they establish operations.
5. Housing Reforms Could Create New Lending Opportunities
While many of the law’s provisions focus on financial regulation, housing remains the act’s primary objective.
The legislation includes dozens of measures intended to increase housing supply, modernize federal housing and mortgage programs, encourage residential development, and address barriers affecting housing finance.
Among them are reforms affecting small-dollar mortgage lending, manufactured housing, and other programs designed to improve housing availability. Exactly how these changes affect local markets will depend on implementation, economic conditions, and future regulatory guidance.
What the Law Says
The act states its purpose is “to increase the supply of housing in America, and for other purposes.” It also includes numerous provisions addressing housing development, mortgage financing, manufactured housing, and small-dollar mortgage lending.
What It Means
If these reforms encourage additional housing construction and mortgage activity over time, community banks and credit unions could see new opportunities to serve homebuyers, builders, and their local communities.
While those outcomes are not guaranteed, the legislation is intended to create conditions that support greater housing availability and local lending activity.
Looking Ahead
These new provisions and their implications may or may not affect your institution directly. But over time, these changes may lead to greater housing access and affordability in communities like yours.
It’s critical to note that while many provisions became effective when the law was enacted, others will require implementation by federal regulators in the months and years ahead. As agencies publish guidance, community financial institutions will gain a clearer picture of how these changes affect day-to-day operations.
Turn Regulatory Changes Into Engagement Opportunities
As regulations evolve, community financial institutions need practical ways to act on new opportunities. Connect by Main Street™ helps identify audiences, build targeted campaigns, and engage account holders through a core-integrated marketing platform.
Sources:
United States Congress. 21st Century ROAD to Housing Act. H.R. 6644, 119th Cong., enrolled bill. 2026. https://www.congress.gov/bill/119th-congress/house-bill/6644.
American Bankers Association. “Senate, House Committee Leaders Reach Agreement on Housing Bill.” ABA Banking Journal. June 2026. https://bankingjournal.aba.com/2026/06/senate-house-committee-leaders-reach-agreement-on-housing-bill/.
Independent Community Bankers of America. “Housing Bill with Community Bank Regulatory Relief Title Becomes Law.” ICBA News. July 2026. https://www.icba.org/.
