Bank Failure Prevention Act of 2025
- Bill Number
- H.R. 1900
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-06-04: Placed on the Union Calendar, Calendar No. 101.
- Last Updated
- 2026-07-17T23:34:39Z
AI-Generated Summary
Purpose of the Legislation
The Bank Failure Prevention Act of 2025 aims to clarify and speed up the regulatory review process for certain bank acquisition and merger applications. By setting strict timelines for when an application's record is considered complete and requiring decisions within fixed periods, the law seeks to prevent delays that could contribute to bank failures, allowing quicker approvals for consolidations in the banking sector.
Key Provisions
The bill amends three major U.S. banking laws to establish uniform rules for handling applications related to acquisitions and mergers involving depository institutions (banks that accept deposits insured by the government) and their holding companies (parent entities that own banks).
- Bank Holding Companies (Amendments to the Bank Holding Company Act of 1956):
- Within 30 days of receiving an application (extendable to 60 days for complex cases), the Federal Reserve Board must send a letter confirming the record is complete or listing needed additional information.
- Once the applicant responds, the record is automatically deemed complete unless the Board identifies serious shortcomings (material deficiencies) and notifies the applicant within 30 days.
- The Board can only use information from the applicant itself to decide completeness; input from third parties (like other regulators or the public) cannot factor in.
- The Board must approve or deny the application within 90 days of the initial submission, even if the record was incomplete at first. If no decision is made, the application is automatically approved (deemed granted).
- The 90-day clock can be paused (tolled) and extended by up to 30 additional days if the applicant requests it.
- Savings and Loan Holding Companies (Amendments to the Home Owners' Loan Act):
- Similar rules apply as for bank holding companies, with the Federal Reserve Board handling notifications, completeness determinations, and decisions.
- The 30-day notification period can extend to 60 days for complex applications.
- Third-party information is excluded from completeness assessments.
- A 90-day decision deadline applies from initial submission, with automatic approval if missed, and a possible 30-day extension at the applicant's request.
- Mergers of Insured Depository Institutions (Amendments to the Federal Deposit Insurance Act):
- The responsible agency (typically the Federal Deposit Insurance Corporation or FDIC, or another regulator) must notify the applicant within 30 days (extendable to 60 days for unusually complex cases) about record completeness or required additional details.
- Responses from applicants deem the record complete unless material deficiencies are flagged within 30 days.
- Only applicant-provided information counts for completeness; third-party views are ignored.
- Decisions must occur within 90 days of initial submission, with automatic approval if delayed, and a possible 30-day extension upon applicant request.
Significant Changes to Existing Law
- Timeline Shifts: Previously, review clocks (e.g., 91 days under the Bank Holding Company Act) started only after a "complete record" was submitted, which regulators could delay by requesting more information indefinitely. Now, the 90-day decision period begins immediately upon initial filing, regardless of completeness, reducing opportunities for prolonged reviews.
- Deemed Approval Mechanism: Introduces automatic approval if regulators miss the 90-day deadline, which was not standard before—this acts as a "shot clock" to enforce timeliness.
- Limited Role of Third-Party Input: Regulators can no longer use external reports, opinions, or recommendations to deem a record incomplete, focusing reviews solely on the applicant's submissions. This narrows the scope of what delays completeness.
- Structured Notifications: Mandates detailed, time-bound letters to applicants about deficiencies, replacing more informal or open-ended requests for information.
Potential Impacts
- On Government Agencies: Agencies like the Federal Reserve and FDIC face stricter deadlines and less flexibility, potentially increasing workload pressure to meet timelines and reducing their ability to incorporate broader stakeholder input. This could lead to more efficient operations but risks rushed decisions.
- On Citizens and the Banking Sector: Banks and holding companies benefit from faster approvals, enabling quicker mergers or acquisitions that could stabilize failing institutions and improve access to capital. However, consumers might face indirect effects, such as consolidated banking options in their communities, potentially reducing competition or local services.
- On International Relations: No direct impacts, as the bill focuses on domestic U.S. banking regulations without addressing cross-border transactions.
Main Stakeholders Affected
- Depository Institutions and Holding Companies: Primary beneficiaries, as they can pursue acquisitions or mergers more predictably and swiftly.
- Applicants for Approvals: Bank executives or entities seeking to acquire or merge, who gain clarity and protection against indefinite delays.
- Regulatory Agencies: The Federal Reserve Board and FDIC (or other "responsible agencies" like the Office of the Comptroller of the Currency), which must adapt processes to comply with new timelines and restrictions.
- Indirectly, Bank Customers and the Public: As faster consolidations could affect service availability, fees, or financial stability in local markets.
Notable Legal, Constitutional, or Political Implications
- Legal Implications: The "deemed approved" provision could lead to more litigation if automatic approvals occur, challenging regulators' authority or the adequacy of reviews. It standardizes processes across related laws, promoting consistency but potentially conflicting with existing anti-monopoly rules under laws like the Clayton Act (which scrutinizes bank mergers for competition).
- Constitutional Implications: Neutral; the bill operates within Congress's established authority over banking regulation under the Commerce Clause, without raising due process or separation-of-powers issues.
- Political Implications: Seen as a deregulatory measure favoring the banking industry by curbing bureaucratic delays, it may spark debate over balancing efficiency with safeguards against risky mergers that could heighten systemic financial risks, especially post-2008 crisis reforms.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (3)
Rep. Fitzgerald, Scott [R-WI-5], Rep. Meuser, Daniel [R-PA-9], Rep. Sessions, Pete [R-TX-17]
Recent Actions
- 2025-06-04: Placed on the Union Calendar, Calendar No. 101.
- 2025-06-04: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-132.
- 2025-06-04: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-132.
- 2025-05-21: Ordered to be Reported (Amended) by the Yeas and Nays: 29 - 21.
- 2025-05-21: Committee Consideration and Mark-up Session Held
- 2025-03-06: Referred to the House Committee on Financial Services.
- 2025-03-06: Introduced in House
- 2025-03-06: Introduced in House
Bill Versions
- Bank Failure Prevention Act of 2025 — issued 2025-03-06 — PDF (7 pages)
- Bank Failure Prevention Act of 2025 — issued 2025-06-04 — PDF (12 pages)