U.S. Rep. Andy Barr (R-KY) on Feb. 16 proposed legislation that would require the Federal Reserve to more quickly act on merger applications in efforts to end uncertainty and reduce the failure rate of banks.
“By enforcing a strict 90-day deadline for the Federal Reserve on bank merger applications, we’re pushing back against the slow-walking tactics that have hindered our financial institutions,” Rep. Barr said. “This legislation is a step towards a more dynamic, diverse, and competitive banking environment, free from unnecessary regulatory paralysis.”
Rep. Barr sponsored the Bank Failure Prevention Act, H.R. 7403, with original cosponsor U.S. Rep. Scott Fitzgerald (R-WI) to specify when the record is complete on certain acquisition applications related to depository institution holding companies, according to the congressional record bill summary.
If enacted, the 90-day merger application deadline under H.R. 7403 would help mitigate the likelihood of bank failures by allowing for healthy mergers and acquisitions, which increase competition and make the banking system more dynamic, says a summary provided by Rep. Barr’s staff.
“The wave of regulations on mid-sized and regional banks from the Biden administration is bound to lead to consolidation to overcome the compliance burden of these rules. At the same time, Biden regulators review proposed bank deals at a glacial pace, leading to a relatively high degree of uncertainty about outcomes,” said Rep. Fitzgerald. “The Bank Failure Prevention Act will ensure bank regulators make a timely decision on mergers to bring certainty to bank competition and consumer needs.”
The bill has been referred for consideration to the U.S. House Financial Services Committee.