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HR6556119th CongressWALLET

Failing Bank Acquisition Fairness Act

Sponsored By: Representative Lynch, Stephen F. [D-MA-8]

Passed House

Summary

Limits concentration-limit waivers for mergers that involve failed or failing banks to protect financial stability. It tightens who counts as a qualified bidder, blocks bad-faith offers from shaping least-cost tests, and forces public reports to Congress.

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  • Regulators: The Federal Reserve, FDIC, and OCC must use tighter waiver rules and new "qualified bid" and "well capitalized" definitions before allowing exceptions to concentration limits. These exceptions require clear and convincing evidence that a deal is necessary to prevent major economic disruption or financial instability.
  • Bidders and failing banks: Acquirers must meet tougher capitalization and management standards. Applications or bids that violate the statute or are made in bad faith cannot be counted in least-cost determinations for the Deposit Insurance Fund.
  • Transparency and Congress: When agencies waive concentration limits they and the FDIC must jointly report to the House Financial Services Committee and Senate Banking Committee within 30 days, explaining why the waiver was necessary, what alternatives were considered, and recommending policy changes; reports are publicly disclosed with allowed redactions.

*Reduces the discretionary surplus fund by $2.0 million, effective September 1, 2036.*

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 0 costs, 1 mixed.

Tighter rules for failing bank mergers

This bill would set stricter guardrails on emergency bank mergers and takeovers. Agencies would have a general exception to approve deals that resolve a bank in default or in danger of default, including with FDIC help. A stronger exception to lift concentration caps would apply only with clear and convincing evidence of need to prevent major economic harm, and only when no qualified bid exists from a bank that is not restricted. Any bidder and its affiliates would need to be well capitalized and well managed, and the resulting bank would need to be well capitalized. The FDIC would not count bids that break acquisition or concentration rules when it runs the least-cost test for the Deposit Insurance Fund.

Small Fed surplus cut in 2036

If enacted, the bill would cut by $2,000,000 the dollar amount used for the Federal Reserve’s discretionary surplus. The change would start on September 1, 2036. This would affect Federal Reserve accounting only and would not directly change household taxes or benefits.

Sponsors & CoSponsors

Sponsor

Lynch, Stephen F. [D-MA-8]

MA • D

Cosponsors

  • Rep. Gottheimer, Josh [D-NJ-5]

    NJ • D

    Sponsored 12/16/2025

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
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