Discussion · House of Representatives
J. French Hill Republican
“I want the House to pass this bill. By law, regulators cannot let a bank buy a failing bank if it would control over 10 percent of all deposits in the country. Regulators can ignore that rule right now. This bill makes it harder to ignore. It says big banks can only take over a failing bank if no other qualified buyer exists, and if it is needed to protect the economy.”
“Mr. Speaker, I rise in strong support of H.R. 6556, the Failing Bank Acquisition Fairness Act, offered by my friend from Massachusetts. When a bank fails, regulators need to move fast to protect depositors, preserve confidence in our financial system, consider potential buyers, and minimize disruption to families, businesses, and communities. All of that often takes place in a very short period of time, between Friday at close of business and Monday morning at opening for business. At that same time, those decisions should be made by a process that is fair, transparent, and promotes competition. Under current law, Federal regulators are generally prohibited from approving a merger or acquisition of a failed or failing bank if the resulting institution would control more than 10 percent or more of deposits nationwide. However, regulators are allowed to waive these concentration limits under certain circumstances. H.R. 6556 restricts when those concentration limits can be waived to situations in which there are no other qualified bidders for that failed bank and the transaction is necessary to prevent significant economic disruption or adverse effects on U.S. financial stability. This legislation helps address concentration in the U.S. banking sector and promote a more transparent, competitive, and accountable approach to resolving failing banks. This legislation includes critical guardrails, such as requiring regulators to report to Congress within 30 days of a waiver on why the waiver was granted, why other qualified alternatives were not selected, and any recommendations for legislative or regulatory changes to improve competition for future bank resolutions. That transparency helps to ensure that these decisions are made in the best interests of depositors; our financial system at large; and, of course, the American people. This is a practical, bipartisan reform that strengthens oversight, promotes competition, and reinforces confidence in the bank resolution process, while preserving regulators’ ability to respond to bank failures. Mr. Speaker, I thank my friend from Massachusetts (Mr. Lynch) for his leadership on this legislation, and I urge my colleagues on both sides of the aisle to support H.R. 6556. Mr. Speaker, I reserve the balance of my time.”
Mr. Speaker, I rise in strong support of H.R. 6556, the Failing Bank Acquisition Fairness Act, offered by my friend from Massachusetts. When a bank fails, regulators need to move fast to protect depositors, preserve confidence in our financial system, consider potential buyers, and minimize disruption to families, businesses, and communities. All of that often takes place in a very short period of time, between Friday at close of business and Monday morning at opening for business. At that same time, those decisions should be made by a process that is fair, transparent, and promotes competition. Under current law, Federal regulators are generally prohibited from approving a merger or acquisition of a failed or failing bank if the resulting institution would control more than 10 percent or more of deposits nationwide. However, regulators are allowed to waive these concentration limits under certain circumstances. H.R. 6556 restricts when those concentration limits can be waived to situations in which there are no other qualified bidders for that failed bank and the transaction is necessary to prevent significant economic disruption or adverse effects on U.S. financial stability. This legislation helps address concentration in the U.S. banking sector and promote a more transparent, competitive, and accountable approach to resolving failing banks. This legislation includes critical guardrails, such as requiring regulators to report to Congress within 30 days of a waiver on why the waiver was granted, why other qualified alternatives were not selected, and any recommendations for legislative or regulatory changes to improve competition for future bank resolutions. That transparency helps to ensure that these decisions are made in the best interests of depositors; our financial system at large; and, of course, the American people. This is a practical, bipartisan reform that strengthens oversight, promotes competition, and reinforces confidence in the bank resolution process, while preserving regulators’ ability to respond to bank failures. Mr. Speaker, I thank my friend from Massachusetts (Mr. Lynch) for his leadership on this legislation, and I urge my colleagues on both sides of the aisle to support H.R. 6556. Mr. Speaker, I reserve the balance of my time.