Press Releases

Barr Delivers Remarks at Hearing to Examine Merger Policies of the Federal Banking Agencies

Washington, May 1, 2024 -

Today, the House Financial Services Subcommittee on Financial Institutions and Monetary Policy, led by Chairman Andy Barr (KY-06), is holding a hearing entitled “Merger Policies of the Federal Banking Agencies.”

Watch Chairman Barr’s opening remarks 


Read Chairman Barr’s opening remarks as prepared for delivery:


“Mergers of financial institutions can promote competition and generate cost savings that can then be passed on to consumers in the form of lower interest rates on loans, reduced fees, and higher interest paid on deposits.


“Clear expectations and timeliness surrounding merger reviews are critical so banks can make informed decisions about whether to pursue a merger when approval is likely or withdraw an application when it is not.


“Bank mergers, especially those involving mid-sized regional banks, help preserve a robust banking system and promote competition.


“They also allow community banks to overcome onerous regulations and meet technology needs.


“It is far better for distressed banks to sell themselves than to fail and rely on FDIC receivership, which would result in significant costs to the deposit insurance fund. 


“Those claiming that regulators ‘rubber stamp’ merger applications either lack understanding of the merger processes and economics, or purposefully misguide the public about the facts.


“We have heard from Federal banking regulatory officials that they value breadth in our banking system, which is the envy of the world and includes small community banks, regionals who serve consumers and businesses in our communities, and large banks that compete in the global arena.


“Recent actions by the FDIC and OCC to update their merger review processes, however, do not conform with regulators’ claims that they value our broad and diverse system.


“As numerous prominent witnesses in this subcommittee have noted, the recent fatally flawed Basel III Endgame proposal sets up economics that drive banks toward merger and acquisition activity.  


“The Basel proposal, the Dodd-Frank Act, and an onslaught of other recent flawed proposals impose unnecessary and unjustified costs onto regional and small banks.

“Banks are forced to try to better spread those costs over added business lines and activities.


“And so, the regulatory onslaught sets clear incentives and the necessity for mergers and acquisitions.


“At the same time, the FDIC and OCC want to make mergers all the more difficult, injecting sluggishness into their processes even for mergers that clearly meet the approval criteria under the Bank Merger Act.


“With varying proposed conditions for merger approval, the FDIC, OCC, and the Fed would be operating with different approval processes and standards, injecting additional uncertainty, incentives for regulator shopping, and negative consequences for the dynamism of our banking system.


“At a time when there are already many questions about sequencing with the DOJ, the differing approaches to antitrust screenings put forward recently by the FDIC and OCC creates more divergence and increases the likelihood of confusion for institutions. 


“Today, we will try to get insights into why the opaque and too often partisan policy positions of the FDIC and OCC have driven them to put forward their suggested new merger guidelines.


“It should be noted that the FDIC proposal came in March of this year, which is odd given that Chairman Gruenberg and Director Chopra in December of 2021 seemed to have felt that working on mergers was so important and urgent that they had to violate longstanding FDIC procedures and engineer a thinly veiled coup against the then Chairman of the FDIC.


“Chairman Gruenberg and Director Chopra hit pause on their urgency for more than two years before working to produce a partisan FDIC merger proposal, reinforcing that they acted in 2021 to usurp the powers of Chairman Gruenberg’s predecessor.


“The recent FDIC and OCC proposals are clear steps in the wrong direction. 


“With that, I will note that there are three bills attached to this hearing related to merger processes. 


“The first is my bill, the Bank Failure Prevention Act, to improve the timeliness and clarity of the merger application process.


“The other two—the Business Loan Privacy Act and the LENDER ACT—work to provide clarity over CFPB rules which are part of the onslaught of confusing and misguided regulatory efforts that force mergers as banks need to spread their ever-growing regulatory burden over additional business activities.”



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