Fed moves to ease 1993-era rules for depositor-owned mutual banks
More than 90% of mutual savings institutions hold less than $3 billion in assets, and the Federal Reserve says the rules covering them have not been updated since 1993.
The Federal Reserve Board on July 31, 2026 requested comment on a proposal to modernize the rules that apply to mutual savings institutions — banks owned by their depositors rather than by shareholders — according to a press release from the Board.
More than 90% of these institutions have less than $3 billion in total assets, the Board said. The Fed took over the regulation and supervision of mutual institutions in 2011, when the authority was transferred from the Office of Thrift Supervision, but the governing rules were first adopted in 1993 and have not been amended since, producing what the Board described as excessive burden and complexity.
The proposal would expand capital-raising flexibility for some mutual institutions, clarify which instruments can count as regulatory capital, and reduce procedural burdens in the rules.
Vice Chair for Supervision Michelle Bowman said the changes are intended to support the growth of these institutions and the services they provide to their communities while preserving their depositor-owned structure, according to the release.
The notice, titled “Regulatory Modernization and Relief for Mutual Holding Companies,” would be the first update to the framework in some three decades. Comments are due 60 days after publication in the Federal Register, the Board said.