Exclusive: Rep. Andy Barr to reintroduce bank merger bill

WASHINGTON — Rep. Andy Barr, R-Ky., will reintroduce a bill today at noon that will put timing guardrails on the Federal Reserve for bank merger applications, according to a copy of the bill first seen by American Banker. 

The bill would tighten the timeliness requirements for the Federal Reserve to consider bank mergers and introduce much tougher standards for the central bank to meet once a merger application is submitted. 

The Fed would have to acknowledge whether an application is complete within 30 days of its receipt. If an application is neither granted or denied within 90 days of its receipt by the FEd, it would be automatically approved, according to the text of the bill. 

“By enforcing a strict 90-day deadline for the Federal Reserve on bank merger applications, we’re pushing back against the slow-walking tactics that have hindered our financial institutions,” Rep. Barr told American Banker last year  when he introduced a previous version of the legislation. “This legislation is a step towards a more dynamic, diverse and competitive banking environment, free from unnecessary regulatory paralysis.” 

The current standard for the Fed requires the central bank to approve or deny a merger within a 91-day period beginning on the day the Fed receives a “complete” application.

Barr first introduced the bill last year. At the time, banks had waited the longest they have in years for bank merger approval at the Fed. In 2022, the average wait time was 87 days.

While the legislation is expected to easily gain a majority vote in the House Financial Services Committee, where Barr serves as chairman of the powerful subcommittee on financial institutions, it still faces a daunting path to become law. 

Most legislation — unless it gets attached to contentious tax extension packages — will need 60% of votes in either chamber, a tall order as Democratic lawmakers dig in in the face of the Trump administration’s dismantling of the Consumer Financial Protection Bureau. Senate Banking Committee ranking member Elizabeth Warren, D-Mass., and House Financial Services Committee ranking member Maxine Waters, D-Calif., have been vocal in their criticism of the administration’s approach toward the bureau.

Warren and Sen. Jack Reed, D-R.I., a senior member of the Senate Banking panel, have urged the Fed to more carefully consider the financial stability implications of allowing certain bank mergers, especially those that add to or create larger institutions.

“The application of the financial stability factor has not been rigorous enough,” said the lawmakers. “In the past, Federal Reserve orders approving mergers have contained cursory analysis and reasoning to support the determination that such mergers would not result in greater financial stability risk.”

The bill comes at a tenuous time for bank mergers, even under the deregulatory auspices of the second Trump administration. 

The board of the Federal Deposit Insurance Corp. voted last week to nullify bank merger standards finalized in 2024, which would have heightened scrutiny on bank merger policy in general. Specifically, the 2024 guidance would have put particular emphasis on assessing the post-merger institution’s financial stability, and its ability to meet the needs of low-to-moderate income individuals. 

While the move signals momentum toward loosening bank regulation oversight when it comes to merger activity, there’s still an emergent populist element among Congressional Republicans that look skeptically on large bank mergers as a potentially negative development for consumers. 

The Trump administration has decided to keep using the strict guidelines adopted more broadly during the Biden administration, which could have implications for bank policy.