The House debated the Failing Bank Acquisition Fairness Act (H.R. 6556), which would make it harder for federal regulators to waive the usual cap on how much of the nation’s insured deposits a single institution can control when that institution buys a failing bank. Under the bill, such a waiver could only be granted if the merger is needed to prevent significant economic disruption and if no other qualified bid from a company not subject to the cap exists. Supporters, including the bill’s sponsor Stephen Lynch and Chairman French Hill, said it would create a fairer process so smaller, healthy banks can compete to buy failed banks instead of the largest banks growing bigger, which they said hurts competition and closes local branches. Members also referenced the official cost estimate, and the discussion included examples of recent bank failures and past banking crises.Written by AI from the debate. Updated .
“I want the House to pass this bill. It makes it harder for big banks to buy failing banks unless it is necessary to protect the economy.”
“Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 6556) to prohibit the use of certain concentration limit exceptions with respect to mergers involving a failed bank unless the applicable agency determines such use is necessary to prevent significant economic disruption or significant adverse effects on financial stability, and for other purposes, as amended. The Clerk read the title of the bill. The text of the bill is as follows:”
Official Congressional Record
Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 6556) to prohibit the use of certain concentration limit exceptions with respect to mergers involving a failed bank unless the applicable agency determines such use is necessary to prevent significant economic disruption or significant adverse effects on financial stability, and for other purposes, as amended. The Clerk read the title of the bill. The text of the bill is as follows:
“I am adding the official cost estimate for this bill into the record.”
“Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I include in the Record the Congressional Budget Office score for this bill. EFFECTS ON DIRECT SPENDING AND REVENUES OF LEGISLATION CONSIDERED UNDER SUSPENSION OF THE RULES IN THE HOUSE OF REPRESENTATIVES WEEK OF JULY 13, 2026 -------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------- H.R. 6556........................ Failing Bank Increase by at Increase by at Would increase ........... https:// Acquisition Least $500K. Least $500K. direct spending by docs.house.gov/ --------------------------------------------------------------------------------------------------------------------------------------------------------”
Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I include in the Record the Congressional Budget Office score for this bill. EFFECTS ON DIRECT SPENDING AND REVENUES OF LEGISLATION CONSIDERED UNDER SUSPENSION OF THE RULES IN THE HOUSE OF REPRESENTATIVES WEEK OF JULY 13, 2026 -------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------- H.R. 6556........................ Failing Bank Increase by at Increase by at Would increase ........... https:// Acquisition Least $500K. Least $500K. direct spending by docs.house.gov/ --------------------------------------------------------------------------------------------------------------------------------------------------------
“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.”
Official Congressional Record
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.
“I want the House to pass this bill. Right now, the biggest banks can easily outbid everyone else to buy failed banks. This bill creates a fairer process so smaller banks can compete to buy them instead of the biggest banks just getting bigger.”
“Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I join my friend from Massachusetts in speaking to the importance of this bill and provide just a couple of minutes of perspective. If you go back to the 1980s, it was a period of Third World debt crisis, the oil and gas lending crisis, and the real estate lending crisis culminating in the late 1980s with really the collapse of the savings and loan industry across the country from too lax supervision and too lax management of these institutions. In both large banks like the famous Continental Illinois failure in Chicago to some of the large thrifts, the government chose to keep banks open rather than closing them by essentially taking a note back called open bank assistance. It essentially increased the losses to the taxpayers. After the resolution of the savings and loan bank crisis and all the other related bank failures of the 1980s and very early 1990s, the government said, look, this is out of hand, and we want to enforce a least cost resolution process when a bank fails, meaning we don’t want to lose more money after the closing by trying to keep these banks open. So they offered this ability that whoever paid the highest price, thus the least cost to the taxpayers, was the winner, which is good policy. However, now it is 30 years later, and the largest banks in the country, as outlined by the gentleman from Massachusetts (Mr. Lynch), have a disproportionate ability to bid $1 more and thus be the least cost to the taxpayer--or maybe after the last debate one penny more-- and be the least cost to the taxpayer. That means that it is very hard to compete with them. What the gentleman from Massachusetts (Mr. Lynch) has proposed is let us have more bidding for those failed banks by crafting a process that is transparent that Congress oversees, Congress outlines the guardrails, where smaller banks could team up with other capital sources and bid for one of those failed banks and end up being in a much more competitive process. What the government gets is a more diversified, more competitive banking system instead of the default winner being one of the big five existing financial institutions. I thank the gentleman from Massachusetts (Mr. Lynch) for his work on this legislation. I thank Chairman Barr of our Financial Institutions Subcommittee and Ranking Member Waters for bringing our bipartisan team together on the committee in advancing this bill. Mr. Speaker, I urge Members on both sides of the aisle to vote ``yes’’ on this measure. I reserve the balance of my time.”
Official Congressional Record
Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I join my friend from Massachusetts in speaking to the importance of this bill and provide just a couple of minutes of perspective. If you go back to the 1980s, it was a period of Third World debt crisis, the oil and gas lending crisis, and the real estate lending crisis culminating in the late 1980s with really the collapse of the savings and loan industry across the country from too lax supervision and too lax management of these institutions. In both large banks like the famous Continental Illinois failure in Chicago to some of the large thrifts, the government chose to keep banks open rather than closing them by essentially taking a note back called open bank assistance. It essentially increased the losses to the taxpayers. After the resolution of the savings and loan bank crisis and all the other related bank failures of the 1980s and very early 1990s, the government said, look, this is out of hand, and we want to enforce a least cost resolution process when a bank fails, meaning we don’t want to lose more money after the closing by trying to keep these banks open. So they offered this ability that whoever paid the highest price, thus the least cost to the taxpayers, was the winner, which is good policy. However, now it is 30 years later, and the largest banks in the country, as outlined by the gentleman from Massachusetts (Mr. Lynch), have a disproportionate ability to bid $1 more and thus be the least cost to the taxpayer--or maybe after the last debate one penny more-- and be the least cost to the taxpayer. That means that it is very hard to compete with them. What the gentleman from Massachusetts (Mr. Lynch) has proposed is let us have more bidding for those failed banks by crafting a process that is transparent that Congress oversees, Congress outlines the guardrails, where smaller banks could team up with other capital sources and bid for one of those failed banks and end up being in a much more competitive process. What the government gets is a more diversified, more competitive banking system instead of the default winner being one of the big five existing financial institutions. I thank the gentleman from Massachusetts (Mr. Lynch) for his work on this legislation. I thank Chairman Barr of our Financial Institutions Subcommittee and Ranking Member Waters for bringing our bipartisan team together on the committee in advancing this bill. Mr. Speaker, I urge Members on both sides of the aisle to vote ``yes’’ on this measure. I reserve the balance of my time.
