Press Releases

Today, the House Financial Services Committee is holding a Financial Institutions Subcommittee hearing, led by Subcommittee Chair Andy Barr (KY-06), to evaluate the Federal Deposit Insurance Corporation's (FDIC) resolution process for failed banks and explore reforms regarding several regulatory topics to support a healthy banking sector for institutions of all sizes.

Read Subcommittee Chair Barr’s opening remarks as prepared for delivery:

"Thank you to our witnesses for being here and offering their expertise on this important discussion.

"Today we will explore a series of topics that focus on promoting a healthy banking industry for institutions of all sizes.

"We will examine ways to promote competition in the FDIC’s resolution process for failed banks and explore how decisions made in response to the 2023 bank failures, such as the invocation of the systemic risk exception to guarantee all uninsured deposits, created unnecessary uncertainty at a time when clear guidance was especially necessary.

"We will also look into potential reforms to the FDIC’s bidding process for failed banking assets and liabilities, with the goal of ensuring that community banks have a fair opportunity to acquire all or part of a failing institution – particularly when such outcomes best serve the interests of local communities.

"More broadly, the least-cost test should not operate as a rigid constraint that effectively limits participation in the resolution process to only the largest institutions.

"We will also discuss how access to diverse funding sources allows banks to remain competitive and continue to serve their communities. 

"The current misalignment in the regulatory treatment of brokered, reciprocal, and custodial deposits have placed handcuffs on small, well-managed financial institutions’ ability to sustainably fund themselves and reform is necessary.

"I look forward to hearing from the witnesses about how legislation attached to this hearing would remove unnecessary barriers to bank funding - ensuring banks have access to diverse and stable sources of deposits that allow them to continue the lending activities that make our economy thrive.

"Restrictions on various deposit types such as brokered, reciprocal, and custodial should be based on actual risks to stability, not the whims of banking regulators.

"Finally, we will highlight the imperative that Congress right-size the capital framework for small and mid-sized banks in a post Dodd-Frank world. Our capital regime has moved too far away from a tailored system, negatively impacting small and mid-size banks, and hindering their ability to survive and compete against larger institutions. We must reverse course on this.

"On a bipartisan basis, Congress directed regulators in 2018 to tailor regulations based on an institution’s size, risk profile, and complexity. Under the Biden administration, regulators failed to fulfill this mandate, and we look forward to new leadership to ensure that a regulatory scheme designed for the biggest banks does not become the rules for all banks.

"Luckily, the regulators have the tools to further tailor regulations and reduce red tape hampering the growth of small and midsized banking institutions. This committee will continue to urge the Federal banking agencies to use the authorities they currently possess to provide much needed relief for banks while protecting financial stability and safety and soundness.

"Community and regional banks have the unique ability to put necessary cash in the pockets of local businesses, and today’s discussion will highlight the need for reform to guarantee long-term resilience and access to capital.

"The overly burdensome regulations imposed by the Dodd-Frank Act, and subsequent rulemakings from the Federal banking agencies, have crippled community banks through heightened capital and liquidity standards, narrower sources of funding, and a mis-calibrated bank merger review process.

"I look forward to hearing from our expert witnesses on this important topic and what we can do in congress to reverse the negative impact of burdensome Dodd-Frank regulations."