Failing Bank Acquisition Fairness Act

Floor Speech

Mr. Speaker, I rise in support of H.R. 6556, the Failing Bank Acquisition Fairness Act, which I introduced in December 2025.

Mr. Speaker, I thank the gentleman from Arkansas (Mr. Hill) and the gentlewoman from California (Ms. Waters), our ranking member, who advanced this legislation unanimously within the committee.

Specifically, the Failing Bank Acquisition Fairness Act will prevent megabanks from dominating the bidding process for acquiring a failed bank if there are other eligible bids from well-capitalized and well- managed small and midsized banks.

In the three decades since 1994, the number of commercial banks has declined in this country by approximately 50 percent, hollowing out the small and midsized institutions that have traditionally housed local community capital.

Small to midsized banks are unable to compete with the larger institutions in the failed bank acquisition process, even when attainable opportunities arise which might result in a more favorable result for depositors and impacted businesses and communities.

For example, after the collapse of the First Republic Bank, Silicon Valley Bank, and Signature Bank in 2023, which were the second, third, and fourth largest bank failures in U.S. history, as part of the resolution process, Federal regulators, including the FDIC, structured an immensely favorable acquisition process to allow JPMorganChase, America's biggest bank at the time, to acquire the nearly $230 billion in assets and $103 billion in deposits from the failed First Republic Bank.

Multiple midsized banks sought to acquire First Republic Bank but failed to compete with J.P. Morgan's sheer asset holdings, estimated to be close to $4 trillion.

As part of that deal, the FDIC also entered into a comprehensive loss sharing agreement with JPMorganChase to incentivize that purchase.

In fact, the FDIC agreed to absorb 80 percent of all credit losses. After effectively winning the government auction, J.P. Morgan quickly announced plans to shut down one quarter of First Republic's 84 branches rather than preserving consumer access to their local branches. The closure also led to the firing of approximately 1,000 bank employees.

Acquisitions such as these are now the norm rather than the exception. This year, U.S. bank mergers and acquisitions have hit a 7- year high, up 45 percent since 2024.

Consumer advocacy organizations such as Americans for Financial Reform and Better Markets have raised serious concerns about the advantages afforded to large interconnected financial institutions like JPMorganChase in bidding for these failing banks, and as a result growing ever larger while accelerating the process of consolidation.

To that end, I introduced this legislation, the Failing Bank Acquisition Fairness Act, which if it were law at the time would have created a more level playing field between healthy medium-sized as well as larger banks to both stabilize markets but also to better serve depositors, businesses, and the impacted communities in which those banks are located while avoiding megabanks gobbling up smaller banks in the steady march toward consolidation.

Megabanks should not be allowed to take advantage of financial crises to increase their domination and pad their own profits.

This legislation would take an important step toward increasing competition and improving the resilience of our financial system from economic shocks.

I am proud that this bill was passed unanimously in committee by every Democrat, every Republican, and has the support of Americans for Financial Reform to boot.

Let me first of all thank Chairman Hill for his kind remarks and his astute observations on the circumstances that have brought us to this point. I will add that I believe this morning it was announced that JPMorganChase, which was the benefactor of this previous transaction, is now approaching $5 trillion in assets. That is indeed remarkable. Their market cap is about a trillion dollars, as well.

I think this legislation does point to that loophole that allows megabanks to acquire failing banks even when other eligible, well- managed small and midsize banks have submitted competing bids improving community and regional bank competitiveness and preventing further consolidation among our largest financial institutions.

Again, I urge my colleagues to support this bill, and I yield back the balance of my time.

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