Failing Bank Acquisition Fairness Act
Sponsored By: Representative Lynch, Stephen F. [D-MA-8]
In Committee
Summary
Limits on concentration-limit waivers would raise the bar for approving mergers of banks that are failing or near failure. It would force regulators to prefer qualified, well-capitalized buyers and require public reporting when exceptions are used.
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- Regulators would face a higher standard. They could grant a concentration-limit waiver only if clear and convincing evidence shows the deal is necessary to prevent significant economic disruption or threats to financial stability.
- Potential acquirers would need to be “qualified bidders.” Buyers and their affiliates must be well-capitalized and well-managed, and the combined bank must be well-capitalized on closing, which narrows who can acquire failing institutions.
- Congress and the public would see more transparency. The Fed, the Comptroller of the Currency, or the FDIC and the FDIC would jointly send a written justification to the House Financial Services Committee and the Senate Banking Committee within 30 days and publish it with allowed redactions. The FDIC would also be barred from counting bids that violate these rules when judging what is least costly to the Deposit Insurance Fund.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 0 benefits, 0 costs, 2 mixed.
Tighter limits on bank merger waivers
If enacted, regulators would only waive bank concentration limits for failing-bank deals when there is clear and convincing evidence that a merger is necessary to prevent significant economic disruption or harm to financial stability. The waiver could be used only if the FDIC has not received a qualified bid from an eligible acquirer. A "qualified bid" would generally require the bidder (and affiliates) to be well capitalized and well managed, and the resulting bank to be well capitalized. For non-bank bidders, the FDIC could require equity capital comparable to a well-capitalized insured bank.
More oversight of failing-bank deals
If enacted, the FDIC and any agency that waives a concentration limit would have to send Congress a joint written report within 30 days after the waiver. The report would explain why the waiver was necessary, describe alternative bids considered and solicitation efforts, explain why alternatives were rejected, and include recommendations to improve competition. The agencies would post the report publicly, with normal redactions for confidential supervisory information. The FDIC would also be barred from counting any bid that would break concentration limits when deciding which resolution is least costly to the Deposit Insurance Fund.
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.
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