Looser Capital Rules Will See ‘Big Four’ Crush Community Banks, Warns Fintech CEO

Miami, July 2nd 2025 – Under planned changes to hold large US banks to looser capital rules, the ‘Big Four’ – JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo – could soon “crush” community banks into extinction, warns Adam Turmakhan, CEO of TurmaFinTech. 

The intervention follows recent reports that the Federal Reserve is pushing ahead with plans to ease leverage rules for the US’s largest banks, loosening the strict capital rules currently held over these institutions. 

Turmakhan – who leads TurmaFinTech, a startup dedicated to helping US community banks and credit unions digitalize and strengthen their customer relationships – believes that such a policy change will only allow the US’s ‘Big Four’ to “run rampant”.  

Figures from the first nine months of 2024 revealed that these large banks occupy 44% of the US banking industry’s profits, their highest share since 2015. For Turmakhan, lighter capital rules would only increase this to “the point of no return”, allowing the ‘Big Four’ to boost their lending capacity, technology investment, and automation to a level that smaller institutions, like community banks, cannot compete with. 

Turmakhan is urging the Federal Reserve to prioritize the vitality and diversity of the US banking sector above all else. By slashing leverage rules, he warns we could see community banks across the US completely and utterly wiped out. 

Adam Turmakhan, CEO of TurmaFinTech, said: “Plans to slash leverage rules for the ‘Big Four’ are incredibly concerning. The Fed would be giving these banks a blank cheque to expand their market share and stifle the competition. If they proceed to implementation, I fear we could see community banks crushed into extinction. 

“With eased leveraging and capital rules, the ‘Big Four’ would be able to boost their lending capacity and offer a service that’s, frankly, too slick and too appealing for consumers to turn down. With bolstered balance sheets, I can see them looking to outcompete each other, offering lower loan rates that would force the US public to abandon their smaller banking providers. 

“It will also allow them to deepen the technological lag we’re seeing across the sector. JPMorgan alone has allocated $17 billion to technology investment this year. With more capital in store, I fear these banks will be able to supercharge their automation efforts, making it simply impossible for community banks to catch up. 

“The Fed needs to realize that its current plans could extend the reach of the ‘Big Four’ to the point of no return. By implementing looser capital rules, you’re essentially gambling with the future of thousands of community banks across the US and allowing the bigger players to run rampant. The diversity of the US banking sector has to come at the top of the priorities list.”