The Bank Failure Prevention Act of 2025, known as H.R.1900, is a proposed law aimed at speeding up the process for banks to merge or acquire other banks. It sets a strict timeline for the Federal Reserve to make decisions, aiming to make the process faster and more predictable for banks.
What This Bill Does
H.R.1900 changes the way the Federal Reserve reviews applications from banks that want to merge or buy other banks. Right now, the Federal Reserve can take a long time to decide if a bank can go ahead with a merger. This bill sets a 90-day deadline for the Federal Reserve to approve or deny these applications. The clock starts ticking as soon as the bank submits its application, not when the application is considered complete.
The bill also requires the Federal Reserve to let banks know within 30 days if their application is complete or if more information is needed. For more complicated applications, this period can be extended to 60 days. Importantly, the bill stops the Federal Reserve from considering outside opinions, like those from community groups or other stakeholders, when deciding if an application is complete or should be approved.
These changes are designed to make the process clearer and faster, reducing the time banks spend waiting for a decision. The idea is to help banks plan better and make business decisions more confidently.
Why It Matters
This bill could have a big impact on how banks operate and how quickly they can grow. For smaller banks, like community and regional banks, the faster process could help them compete better with larger banks. They often don't have the resources to deal with long waits and complicated applications.
For everyday Americans, this could mean more banking options and possibly better services as banks merge and grow. However, some worry that faster approvals might mean less careful checks on whether these mergers are good for customers and communities.
Key Facts
- Cost/Budget Impact: The bill's financial implications are not detailed, but it aims to reduce costs for banks by streamlining the process.
- Timeline for Implementation: Once passed, the bill would immediately change how the Federal Reserve handles applications.
- Number of People Affected: The bill directly affects banks and indirectly impacts their customers and communities.
- Key Dates: Introduced on March 6, 2025, and reported from committee on June 4, 2025.
- Other Important Details: The bill prohibits the Federal Reserve from considering third-party information in its decisions.
Arguments in Support
- Reducing Regulatory Delays and Uncertainty: Supporters say the bill helps banks by making the approval process faster and more predictable, allowing them to plan better.
- Helping Community and Regional Banks Compete: By streamlining the process, smaller banks can compete more effectively with larger ones, which can handle delays more easily.
- Reducing Regulatory Burden: The bill clarifies what information banks need to provide, making the application process less costly and complex.
- Preventing Regulatory Overreach: By not considering third-party information, the bill ensures decisions are based on clear rules, not outside pressures.
Arguments in Opposition
- Rushed Approvals: Critics worry that the strict timelines might force the Federal Reserve to approve mergers without enough scrutiny, potentially leading to problematic deals.
- Excluding Community Input: By not considering third-party information, the bill might ignore important perspectives from communities and consumers.
- Reduced Scrutiny: Faster approvals could mean less thorough checks on whether mergers are good for competition and consumers.