What a yes vote endorsed
Failing Bank Acquisition Fairness Act
What this does
The bill narrows the exceptions that let a bank exceed federal deposit and liability concentration limits when it acquires a failing bank. Under current law a regulator can waive those limits for a merger involving a bank in default or in danger of default; the bill permits a waiver only on clear and convincing evidence that the merger is necessary to prevent significant economic disruption or significant adverse effects on financial stability, and only when no qualified bid exists from a bidder that is well capitalized, well managed, and not itself over the cap. It requires the waiving agency and the FDIC to report each waiver to the House Financial Services and Senate Banking committees within 30 days and to post the report publicly, subject to redactions. It bars the FDIC from counting a bid that would breach those limits when it decides the least costly way to resolve a failed bank. It also reduces the Federal Reserve's discretionary surplus fund by $2 million, effective September 1, 2036.
Passed the House by voice vote
How we know · 9 sourced claims
- The bill narrows the exceptions that let a bank exceed federal deposit and liability concentration limits when it acquires a failing bank.Source: Sec. 2
- Under current law a regulator can waive those concentration limits for a merger involving a bank in default or in danger of default.Source: Sec. 2(a)
- The bill permits such a waiver only on clear and convincing evidence that the merger is necessary to prevent significant economic disruption or significant adverse effects on financial stability.Source: Sec. 2(a)
- The waiver is available only when the agency has received no qualified bid from a bidder that is not subject to the concentration prohibition, with qualified bid defined as one that is well capitalized and well managed.Source: Sec. 2(a) (18(c)(13)(C))
- The bill covers both deposit concentration limits and the consolidated-liability concentration limit.Source: Sec. 2(b)
- The waiving agency and the FDIC must jointly report each waiver to the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs within 30 days.Source: Sec. 3(a)
- The report must be made publicly available on the agencies' websites, subject to redactions for confidential supervisory information.Source: Sec. 3(b)
- The FDIC may not count a bid that would violate the concentration limits when determining the least costly resolution of a failed bank.Source: Sec. 4
- The bill reduces the Federal Reserve's discretionary surplus fund by $2 million, effective September 1, 2036.Source: Sec. 5