The U.S. House of Representatives has passed legislation reversing the Office of Comptroller of the Currency’s (OCC) recent rule regarding the process of banks merging by a vote of 220-207. The OCC finalized a rule in September of 2024 amending the Bank Merger Act, adding hurdles on bank mergers without Congressional authorization. The rule would disproportionately impact community and regional banks from pursuing mergers and strategic partnerships.
“Bank mergers create competition and efficiency in the banking system,” said Rep. Andy Barr, Chair of the House Financial Services Subcommittee on Financial Institutions. “By eliminating this rule, we will remove unnecessary guardrails on the bank merger process that make smaller and medium-sized banks less competitive. This is another win for President Trump, who is making our economy stronger by cutting government red-tape and unleashing the free market.”
U.S. Sen. John Kennedy led a companion version of Barr’s legislation to passage in the U.S. Senate, S.J. Res. 13. The bill now heads to President Donald Trump’s desk for his signature.
In early May, the OCC issued an interim final rule to rescind its 2024 final rule related to its regulations for business combinations involving national banks and federal savings associations in 12 CFR 5.33. The OCC also rescinded a policy statement issued at the same time as the 2024 final rule titled “Policy Statement Regarding Statutory Factors Under the Bank Merger Act” contained in an appendix to 12 CFR 5 subpart C.
The Bank Merger Act, Section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)), and the OCC’s implementing regulation, 12 CFR 5.33, govern the OCC’s review of business combinations of national banks and federal savings associations with other insured depository institutions (institutions) that result in a national bank or Federal savings association. Under the Bank Merger Act, the OCC must consider the following factors:
- Competition;
- The financial and managerial resources and prospects of the existing and proposed institutions;
- The convenience and needs of the community to be served;
- The risk to the stability of the nation’s banking or financial system; and
- The effectiveness of any insured depository institution involved in combatting money laundering activities, including in overseas branches.
“We applaud today’s House passage of the Congressional Review Act resolution nullifying the OCC’s flawed bank merger rule, and we thank Rep. Andy Barr for leading this effort,” said ABA President and CEO Rob Nichols. “This action, along with the companion resolution led by Sen. John Kennedy and passed by the Senate, will provide regulators with the opportunity to re-envision the framework governing bank mergers so that it more effectively promotes competition while allowing banks to better serve their customers. We look forward to President Trump signing this important resolution into law.”
