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Source: Congress.gov
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The ranking member and I would like to wish each of you a nice afternoon. The committee will come to order. The chair will advise the audience that disruption of a congressional business is a violation of law and is a criminal offense. Chair also advises those in the audience that violations will not be tolerated and violators will be removed from the room and may be subject to arrest. The committee will come to order. Without objection, the chair is authorized to declare a recess of the committee at any time. A quorum being present, we will now proceed to today's business. Pursuant to notice, I call up HR 19001900, the Bank Failure Prevention Act, introduced by the gentleman from Kentucky, Mr. Barr, the chair of the Subcommittee on Financial Institutions. The clerk will report the bill, which was distributed in advance. H.R. 1900 to specify when the record is complete on certain acquisition applications related to depository institution holding companies and for other purposes. Without objection, the bill is considered read and open to amendment at any point. The gentleman from Kentucky has an amendment in the nature of a substitute, copies of which have been distributed in advance. The clerk will report the amendment. An amendment in the nature of a substitute to H.R. 1900 offered by Mr. Barr of Kentucky, designated as Bar 047. Without objection, the amendments considered red will serve as base text for the purposes of amendment. The gentleman from Kentucky, Mr. Barr, is now recognized for five minutes to discuss his bill. Thank you, Mr. Chairman. I am proud to support H.R.
1900, the Bank Failure Prevention Act, and I want to thank my good friend Mr. Fitzgerald from Wisconsin for his partnership on this important legislation. This amendment, in the nature of a substitute, establishes a shot clock for federal regulators to act on bank merger applications, bringing much needed efficiency, transparency, and accountability to a process that has become opaque and unreasonably slow. Timely merger decisions are essential to the health of our banking system. Mergers and acquisitions help community and regional banks grow into new markets, expand their services, and achieve the economies of scale necessary to compete in a modern financial marketplace, and provide lower cost and more innovative financial services and products. Regulatory indecision on merger applications impedes these beneficial outcomes. When responsibly executed, mergers don't stifle competition, they actually strengthen it. They help create more resilient institutions that can offer better services to more Americans, including small businesses and underserved communities. By enabling banks to achieve the scale and flexibility needed to invest in technology and infrastructure, these mergers ultimately benefit the customer. Unfortunately, the current review framework is broken. Regulatory delays drag on for far too long, causing unnecessary costs, uncertainty, and in many cases, deterring transactions that would benefit consumers. And as we all know, failure to act swiftly can result in missed opportunities for both financial institutions and their customers. HR 1900 doesn't change the standards for approving mergers. It simply ensures regulators make a timely decision, giving applicants clarity and reducing wasteful delays. It's a common sense fix and it's long overdue. What's more, this bill ensures that any delays are limited to only those cases that involve complex applications and that they are managed in a fair and transparent manner.
manner. This bill complements another bill of mine, the Promoting New Bank Formation Act, which I was proud to sponsor in this committee passed last month. I'd like to thank Mr. Lynch for his support of that bill and recognize his commitment to revitalizing community banking. The ability of smaller independent banks to form and grow is essential to a competitive and diverse financial sector. Together, these measures aim to restore balance and competitiveness and dynamism to our banking system, ensuring community institutions can thrive, innovate, and better serve the people who depend on them. It's important that we acknowledge the reality that our banking system is evolving and that we must continue to make legislative adjustments that promote both stability and dynamism and recognize that the competitive landscape and the ecosystem for banking is different. It's not just that banks are competing with other banks. It's that banks are competing with a lot of non-bank financial technology and other firms and payment systems. In recent years, we've seen a steep decline in merger activity, largely due to the posture of the previous administration, which effectively shut down the process. That was not a policy of prudence. It was a policy of paralysis. By fostering an environment of regulatory uncertainty and unnecessary delays, the last administration inadvertently hampered the ability of financial institutions to adapt, innovate, and grow in an increasingly competitive global marketplace. While I'm encouraged that the FDIC and OCC rescinded restrictive merger policy statements and rules, that alone isn't enough.
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