On Friday, July 31, the Federal Reserve Board issued a proposal aimed at modernizing the regulatory rules governing mutual banks and sought public comment on the matter. These institutions are owned by depositors rather than shareholders, and most are small in terms of asset size. The current rules, which have not been updated since 1993, have become cumbersome and complex. The proposal aims to update the regulatory framework, increase mutual banks’ flexibility in raising capital, clarify regulatory capital instruments, and reduce procedural burdens to help them better serve their communities. The public may submit comments within 60 days of the proposal’s publication in the Federal Register.