Providing for Congressional Disapproval of the Rule Submitted By the Office of the Comptroller of the Currency of the Department of the Treasury Relating to the Review of Applications Under the Bank Merger Act

Floor Speech

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Mr. BARR. Mr. Speaker, pursuant to House Resolution 426, I call up the joint resolution (S.J. Res. 13) providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Office of the Comptroller of the Currency of the Department of the Treasury relating to the review of applications under the Bank Merger Act, and ask for its immediate consideration in the House.

The Clerk read the title of the joint resolution.

Mr. Speaker, I rise in support of this joint resolution of disapproval that would nullify the Office of the Comptroller of the Currency's final rule that makes it more difficult for banks to merge and merge in a healthy way. That is why I introduced the House companion, H.J. Res. 92.

Today, we have the opportunity to prevent future administrations from issuing arbitrary rules on mergers and acquisitions that lack robust cost-benefit analysis and would make it significantly harder for financial institutions to grow and compete.

Banks in the great Commonwealth of Kentucky and throughout the country are facing challenges in managing the high costs of complex regulations. Furthermore, customers now demand advanced technological features, such as mobile and online banking, which require substantial capital investments.

Mergers often present the only viable path for these institutions to keep up with these regulatory and technological costs and continue serving their local communities.

They also play a vital role in ensuring the safety and soundness of the financial system. By enabling stronger, well-managed institutions to acquire weaker ones, especially those struggling due to local economic conditions, we can prevent bank failures and the panic that they cause.

Instead of making it harder for banks to merge, we should be eliminating outside obstacles to mergers, enhancing competition and innovation, and ensuring that Americans, especially those in rural and underserved communities, retain access to physical branches with employees who understand their local economies.

That is why I introduced H.R. 1900, the Bank Failure Prevention Act, which includes a shot clock to ensure timely decisions on merger applications.

Mr. Speaker, I come from Kentucky. It is a basketball-crazed Commonwealth, and we care about the shot clock. Congress should care about the shot clock on merger applications, as well.

My bill would restore fairness and predictability, preventing delays and giving banks the stability they need to focus on serving their customers and growing their businesses.

The Bank Failure Prevention Act will help community banks and regional banks thrive in today's competitive environment, providing for a shot clock on the review of those merger applications and providing better outcomes for consumers.

I look forward to marking up this important legislation in the House Financial Services Committee this week.

The OCC's merger rule under the Biden administration would have taken us in the exact opposite direction. It would have upended decades of precedent by shifting the burden onto banks to prove their merger should be approved rather than requiring the OCC to demonstrate how the merger conflicts with statutory factors.

This would be fundamentally unfair, increasing confusion for banks seeking to merge and massively increasing the delay on the pendency and review of these applications without any kind of deadline on the review.

Additionally, the rule would have abandoned expedited review for mergers for small, well-capitalized banks. Before the Biden-era regulation, there was an opportunity for expedited review of healthy mergers when there were small and well-capitalized institutions involved. Unfortunately, because of the Biden regulation, this resulted in a much more protracted process.

Expedited reviews are essential to avoid prolonged, costly merger review processes that hinder banks from maintaining their employee base or investing in technology. Instead, long-drawn-out application processes create an environment of uncertainty due to regulatory delays, even when the proposed transaction is relatively simple.

At the end of the day, Mr. Speaker, consumers are the ones who are hurt most when their banks are caught in limbo and forced to devote resources to navigate the merger process instead of enhancing their own products and services.

The Democratic-led OCC rule was driven more by a progressive ideology against mergers in all sectors of all kinds in the economy rather than sound, rational policymaking. In fact, the Biden-Harris OCC did not even coordinate with the other banking regulators, such as the Federal Reserve Board, before issuing this final rule.

Creating different merger rules for banks with different charters would add significant ambiguity for both banks and their customers.

Thankfully, the current OCC under President Trump has recently indicated they will abandon this flawed rule. However, without this Congressional Review Act resolution, there is nothing to prevent a future administration from reintroducing this damaging rule that would prevent healthy, beneficial mergers from occurring. Community and regional banks, as well as their customers, should not have to fear that the rules will change dramatically in a few years.

Mr. Speaker, I can already anticipate the argument from my good friend from California. I know what she is going to say here in just a few minutes. She is going to say: Look at the Republicans. They are supporting mergers of big, bad banks, and that hurts Americans.

To the contrary, Mr. Speaker. Allowing healthy mergers to prevent bank failures allows for healthy financial institutions to compete with the big Wall Street banks. If you want more competition for big Wall Street banks, you should support this resolution of disapproval because you are going to create stronger competitors to the big Wall Street banks.

Opposing this resolution, like the gentlewoman and ranking member of our committee is about ready to do, is defending the regulatory moat that protects big banks from real competition.

The Democrats' opposition here is defending big banks without competition, and that is why I urge all of my colleagues on both sides of the aisle to support healthy competition to prevent bank failures and to disapprove of this unwise regulation from the Biden administration.

Mr. Speaker, I urge all of my colleagues to support this resolution and prevent the regulatory whipsaw that has proven so detrimental for banking institutions and the American people who rely on them. I reserve the balance of my time.

Before I yield some time to my good friend from Florida, I will take the opportunity to respond to a few of the points that my friend from California made that maybe she is misunderstanding what the law actually says.

When I refer to the law, I am referring to the Congressional Review Act, which is the statute that we are invoking here to invalidate this Biden-era regulation.

The gentlewoman from California says that: This is a waste of time. The Trump OCC has rescinded the rule. We don't need to do this. I would remind the gentlewoman from California the reason why we need to do this. The reason why we are invoking the provisions of the Congressional Review Act is that passing a resolution of disapproval under this law ensures that a substantially similar bad rule can never be reintroduced in the future without scrutiny.

We obviously know that there are bad regulators from the prior administration that prevented healthy mergers that would have prevented bank failures. There is no guarantee that we are not going to have an equally bad regulator in the future. That is why we have to take out this insurance policy against bad regulators in the future.

That is what the CRA is. It sends a clear message about balanced regulations that foster competition and innovation without excessive bureaucracy, and it safeguards against unchecked regulatory actions, ensuring that future rules undergo careful oversight.

Now I will address this assertion that bank merger applications are just rubber-stamped by regulators. If there is any evidence that that is not true, it is proof from the prior administration. Not only was there not a rubberstamp, there was so much scrutiny that they never happened. They languished. There was no shot clock. There was no review. They just sat there and languished.

Do you know what happened as a result? Banks withered on the vine waiting for a decision because of regulatory paralysis from the previous administration. There was hardly a rubberstamp. There was never a decision.

Frankly, all we are asking for is a decision one way or another, Mr. Speaker, yes or no, green light, red light. Don't just sit there in purgatory forever and not make a doggone decision. That is the problem we are trying to fix.

With respect to the gentlewoman's concern about closed branches, we are concerned about the lack of branches. We are concerned about banking deserts. That is exactly why Republicans introduced a resolution to allow for more de novo charters. We want more banks, not less. We want more competition, not less. We want those new banks to form in those underserved communities, urban, rural, suburban, wherever they are. We need more.

Mr. Speaker, my question to the gentlewoman, the ranking member, is: Why did she vote against that? If she is so concerned about no branches, not enough branches, banking deserts, why is she voting against making it easier for new banks to form in those places where there are no financial services?

Mr. Speaker, as to our Democratic colleagues' concern that this legislation and allowing for healthy mergers to happen in the banking sector would somehow diminish financial services or that customer service would somehow be lost, it is actually the opposite.

When you have healthy mergers among, especially, community banks or a small regional bank acquiring a community bank, that allows them to add scale. That allows them to invest in the very technology that provides the customers with better services, with better, more innovative financial services and products.

Far from losing customer service, this is a way for smaller institutions, regional banks, to come together into combinations, invest in more technology, to lower costs, to help those customers to increase access to financial services in ways that they can better compete with the megabanks.

Mr. Speaker, I will address a couple of the arguments that were just made.

I think I heard the ranking member say that what we are trying to do is let them do whatever they want to do. That is actually not at all the case. The merger review process is a very involved process. There is quite a bit of scrutiny that goes into approving these mergers. In fact, what we want to do here with the resolution disapproving of this is to actually force the agencies to make a decision one way or the other.

The problem we have seen, especially in the previous administration, is not necessarily that they disapproved a merger. They just didn't make a decision. If it is in the interest of financial stability to reject a bank merger, then that very well could be a legitimate regulatory decision, but make the decision. That is what we are saying here: Make the decision.

Mr. Speaker, if the gentlewoman is concerned about layoffs and employees of banks losing their jobs, the surest way that you will have massive layoffs and workers losing their jobs is for a bank merger application to be presented to the agencies and have literally no decision because guess where the acquisition target employees are going to go. They are going to go away. They are not going to stay with the bank.

What we are saying is: Give the merger applicant a decision one way or the other. That is the best way you can have worker retention in the banking sector.

Mr. MOORE of North Carolina. Mr. Speaker, I rise today in support of S.J. Res. 13 to overturn a Biden-era rule that threatens competition, undermines community banks, and diminishes consumer choice.

Under the Biden-Harris administration, the Office of the Comptroller of the Currency introduced unnecessary impediments to prevent healthy bank mergers with limited justification. Community banks are the cornerstone of local communities, and often mergers present an opportunity to allow them to better keep up with costly compliance and technology costs.

Unlike the Member from California, I represent a rural area in North Carolina. I have seen firsthand what happens to banks that are not allowed to grow; frankly, because of a lot of the overregulation that they have had to deal with, particularly these last 4 years in the Biden administration.

Mr. Speaker, I have seen the opposite. I have seen the fact that North Carolina continues to grow, that thousands and thousands of people are leaving from States like California where they are overregulated and overtaxed. They are voting with their feet and coming to States that are much, much more business friendly and much more consumer friendly. That is the kind of policies that we need to be adopting in Washington.

This resolution is going to ensure that future administrations cannot create complicated review processes that lock out competition, provide unnecessary delay, and keep things in limbo for unknown periods of time.

In the true spirit of competition, this resolution cuts burdensome red tape and allows banks to get back to what they do best: serving customers and serving communities. This is a step in the right direction.

Mr. Speaker, comments were made earlier on the other side about the big, beautiful bill that we are going to be passing hopefully this week. This is another step to move this economy forward, to finally unshackle American energy, to finally move forward and reduce taxes, and to let that American spirit continue to grow.

These are the kinds of things that we need to be doing. These are the kinds of things that we are doing, and I appreciate the gentleman yielding me time.

Mr. Speaker, I thank the gentleman for his excellent comments. I think another important point that needs to be made in the context of this resolution of disapproval of the Biden-era OCC rule is what is actually happening in the marketplace.

I think the arguments made on the other side of the aisle assume an antiquated market where the only competition that exists are banks, competing with banks. That is not the case anymore. We are living in 2025. In 2025, the advent of all kinds of nonbank financial services has to be taken into account when you look at the merger landscape in banking.

We have fintechs. We have nonbanks. There are credit unions. There is farm credit. There are all kinds of payment systems, movement to stablecoins and the blockchain. Financial services look a whole lot different than it did even 25 years ago.

Mr. Speaker, when you are doing an analysis of the propriety of a bank merger, you can't just look at whether or not this leads to some level of consolidation in the banking sector. You have to look at it in terms of competition across the financial services landscape.

In order to achieve the scale, to provide the same level of services, to provide the same level of technological convenience, and to provide the same level of underwriting and access to capital that consumers are being accustomed to now in this very competitive landscape, healthy mergers are needed for banks to compete with all of the financial technology that is happening in the economic landscape.

That is not being taken into consideration by my friends on the other side of the aisle.

Mr. Speaker, listening to my colleague from California just reminds me to make the point that economies of scale are not inherently bad. Economies of scale and big, large financial institutions serve our economy. Community banks serve our economy. Midsize banks serve our economy. Regional banks serve our economy. Super-regional banks serve our economy, and big banks serve our economy. They serve different parts of the economy.

At the larger end, the globally and systemically important financial institutions make markets. They are part of why we have the deepest, most liquid, and most competitive capital markets on planet Earth. This is not a bad thing. This is a good thing.

Those large institutions are capable of serving large, multinational corporations that make the United States a destination for capital flows in our country. They are a magnet for foreign direct investment. They help us with countering terrorism. They give us a global visibility that we wouldn't have if we didn't have large globally important financial institutions that were forward positioned in other continents that allowed us visibility into financial flows and helped our law enforcement and our intelligence agencies find bad actors.

That is a good thing. That is not a bad thing. It is important, though, that we preserve the dynamism and the diversity of our banking sector. That is why we also want large regional banks, regional banks, midsize banks, and, yes, community banks and microbanks. We want it all. It is the diversity and heterogeneity of the banking sector that makes our system the best in the world.

That is why we want healthy mergers. We want de novo charters to backfill, but we want healthy mergers so that we have a constantly dynamic and healthy banking system.

Now, the gentlewoman cites this one particular case of fraud in one large bank, and she is right. It was a bad case, and it was properly punished by the regulators. She cites to a case of cross-selling and overly aggressive marketing and a sales goals program and compliance problems. It is true. There were, but it is not because there are healthy mergers in this country that that happened. That is not why that happened. That could have happened in a regional bank. That could have happened even in a smaller bank. It happened to happen in a larger bank, but guess what?

There are a lot of other large banks in this country where they didn't have those problems. When there are problems, that is why we have regulators and bank examiners. They fix those problems to make sure that they never happen again. You know what can help prevent those problems from happening even more than regulators, even more than central planning from Washington? Mr. Speaker, it is competition and choice.

That particular institution that the gentlewoman is talking about, maybe they didn't have enough competition. Maybe they didn't have enough competition, Mr. Speaker, because we had regulators that prevented healthy mergers to enter into their market space and actually compete and take customers who are unsatisfied with that cross-selling.

The whole point here is that we want a dynamic marketplace so that we can create competition. That is the best form of consumer protection, not a regulator, not an examiner, not regulatory inaction, or regulatory indecision. That is not consumer protection, but healthy mergers that allow for greater competition of the big banks. That is the way to protect consumers.

I will make one other point before I reserve, as well. When we say that large banks are not inherently bad, what we mean by that is that when you allow for a merger, let's say, of two regional banks, and you allow that scale, that economies of scale to take place, and where there are investments in technology, not only do you give the customers of that larger institution, that successor merged institution with greater resources to provide lower cost services, more technological advancements, but, yes, you allow them to invest in what? They invest in consumer protection.

You allow them to make sure that people in their organization are not making mistakes with cross-selling, making sure that they are using the latest technology to ensure that everybody is getting the right deal and the best deal and the most financial inclusion possible given that particular customer's circumstances.

Far from promoting problems, this resolution will actually help solve the problems.

Mr. Speaker, let me give you an example of where a merger that was recently approved certainly doesn't hurt consumers but helps consumers and creates more competition.

The gentlewoman cites the approval of the Capital One-Discover merger. Do you know what that merger did? It created a third option, in addition to MasterCard and Visa, for consumers to access in terms of a payment network. That is not diminishing competition. That is creating more competition. It is more competition for Visa and more competition for MasterCard. Ask Visa and MasterCard. They will tell you.

This is a very formidable competitor to MasterCard and Visa now that there is an approved merger between Capital One, a substantial credit card business, a substantial payment business, and Discover with their substantial network. You create a third option for consumers. That is procompetition, not anticompetition.

I will make another point. This is not just about big banks. It is about small community banks. We are scrutinizing today the Biden OCC's regulation.

What did that regulation do, Mr. Speaker? It eliminated expedited procedures for approval of what? It eliminated expedited procedures for approval of community bank mergers, small noncomplex mergers that would allow those community banks to serve those small communities better. That regulation eliminated that.

Here is what the trade association of the smallest banks in America says about that Biden regulation. Here is what the small banks say about that regulation.

``ICBA strongly opposes the elimination of the expedited review and streamlined applications. . . . not every transaction is complex. For example, in instances where two community banks within the same market attempt to merge, and the merger does not pose significant financial stability, consumer protection, competition or safety, and soundness concerns, the OCC should treat the transaction as noncomplex and permit for review under streamlined procedures.''

It makes sense to me that we would have streamlined, expedited procedures so that we can make sure community banks can continue to compete. This is not about big banks. It is about small banks and the survival of small banks under the avalanche of red tape that came at them after Dodd-Frank, after the avalanche of competition from nonbanks and credit unions and fintechs and blockchain companies. We want these small banks to survive, to continue to serve their communities. This is the way they do it.

Finally, I will make a point that hasn't really been discussed here today in this debate; that is, we should remember the lessons of Silicon Valley Bank. There was a very, very significant panic because of the failure of Silicon Valley Bank and there was a run on that bank.

We don't want that to happen again. We don't want a panic. We don't want a run. We want to prevent bank failures, and the way to prevent bank failures is to allow strong banks to acquire weak banks. We want to make sure that a failing bank can be saved by a white knight. Delaying approvals of healthy mergers is very dangerous for financial stability.

We need this legislation so that we never have a bad regulation that would prevent regulators from allowing expedited approval of mergers that help save the system.

Mr. Speaker, former Federal Reserve Governor and now-Vice Chair for Supervision Michelle Bowman, who talked about the procompetition benefits of healthy mergers, said: ``Reducing the efficiency of bank M&A can be a deterrent to healthy bank transactions. It can reduce the effectiveness of M&A activity that preserves the presence of community banks in underserved areas, prevent institutions from pursuing prudent growth strategies, and actually undermine competition by preventing firms from growing to a larger scale, effectively creating a `protected class' of larger institutions.''

Mr. Speaker, we had a hearing that was called when the ranking member was the chair. She called in all the CEOs of the biggest banks in the country. In this particular hearing, the gentlewoman from California also hauled in some of the CEOs of the regional banks, the big regional banks, in addition to the G-SIB Wall Street banks.

I noticed that the CEO of a successor institution that was formed by the merger of two regional banks was sitting right next to the CEO of one of the largest banks on planet Earth, so I said to the CEO of one of the largest banks on planet Earth: This gentleman who is now the CEO of a big regional bank is sitting next to you. Can you tell me what a more formidable competitor to your big Wall Street bank is? Is it the original small regional bank, the other small regional bank, or is it the combination of those two regional banks that made a bigger regional bank?

He said: Undoubtedly, it is the bigger regional bank that poses a bigger competitive threat to me, the big Wall Street bank.

Not all mergers are bad. There are a lot of mergers that help create more competition. That is what we want.

More importantly, Mr. Speaker, it provides better financial services and products and access to the American Dream for the American people.

That is why we want to disapprove this bad regulation. That is why we want to make sure that mergers are allowed to allow for distressed banks to sell themselves instead of failing, thereby insulating the Deposit Insurance Fund from losses.

This is to help financial stability, Mr. Speaker. I urge all of my colleagues, for the reasons that we have outlined today, to help us invalidate this bad regulation and to make sure that no regulator in the future can pass another bad regulation like this that would prevent healthy mergers.

For goodness' sake, if you want dynamism and competition in a diverse banking system, support our agenda that not only allows for healthy mergers but also provides for regulatory tailoring so that we provide relief to small community banks so that they can compete, relief to the regional banks so that they can compete, and, for goodness sake, clear the way for de novo charters, new banks, to come into the system.

I don't know, for the life of me, why my friends on the other side of the aisle who complain about big banks won't allow for healthy mergers to compete with them, won't allow for new banks to come into the system by overregulating the heck out of the sector, and won't allow there to be a dynamic, diverse banking system.

Mr. Speaker, for these reasons and others, as I explained earlier, I urge my colleagues to support this resolution, and I yield back the balance of my time.

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