Two U.S. Senators are trying to tighten banks capital reserves with the release of a new bill titled, “Terminating Bailouts for Taxpayer Fairness Act.”

A previous version of the bill was leaked earlier this month, outlining what it would take to tighten banks’ capital bases while eliminating certain transactions between depository institutions and their non-depository affiliates. The bill is sponsored by Senators Sherrod Brown, D-Ohio, and David Vitter, R-La.

The bill focuses on three key points: loosening the capital requirements for community banks, new regulatory enticements for community banks and raising the highest asset bucket threshold from $400 billion to $500 billion, an article from Compass Point said.

Additional highlights include banks with assets between $50 billion and $500 billion to hold 8% equity to assets. The bill also allows regulators to institute “supplemental risk-based capital requirements” for institutions with more than $20 billion of assets as an additional layer of regulatory oversight, Compass Point noted.  

“By making the bill about more than simply increasing the capital standards for the nation’s biggest banks, Sens. Brown and Vitter are likely to gain some momentum in the Senate,” said Compass Point.

However, the research firm said they do not believe the bill will come close enough to the numbers necessary for passage. 

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