A substantive expansion of the bill's scope and a refinement of application processing timelines. v2 adds a new section extending the application completeness and determination rules to insured depository institutions, and modifies existing provisions for bank and savings and loan holding companies to allow for applicant-requested deadline extensions and to broaden the criteria for extending initial notice periods.
Bank Failure Prevention Act of 2025
- Sponsor
- Rep. Barr, Andy [R-KY-6]
- Committees
- Financial Services Committee (primary)
- Last action
- Jun 4, 2025
Bottom line
The bill significantly accelerates the regulatory approval process for bank and savings and loan holding company acquisitions and bank mergers by imposing strict deadlines and a 'deemed granted' clause.
What it actually does
This bill amends the Bank Holding Company Act, the Home Owners' Loan Act, and the Federal Deposit Insurance Act to establish strict new deadlines and procedures for federal banking regulators when reviewing applications for mergers, acquisitions, and other changes in control of depository institutions and their holding companies. It mandates that regulators confirm application completeness or request additional information within 30-60 days, and crucially, requires a final decision on all applications within 90 days of initial submission, regardless of completeness, with applications deemed granted if no decision is made.
Proponents argue
Supporters argue that the current regulatory approval process is often slow, opaque, and unpredictable, hindering efficient capital allocation, market responsiveness, and potentially delaying necessary consolidations that could prevent bank failures or strengthen the financial system. They contend that clear deadlines will increase transparency, accountability, and efficiency for both applicants and regulators, fostering a more dynamic financial sector.
Opponents contend
Opponents might argue that these strict deadlines, especially the 'deemed granted' provision and the limitation on considering third-party information for completeness, could compromise regulatory thoroughness, potentially allowing problematic mergers or acquisitions to proceed without adequate scrutiny. They may contend that complex financial transactions require flexible review periods to ensure financial stability, consumer protection, and prevent systemic risks.
The bill is relatively short and its core changes are clear, making it accessible for a quick but informed review.
Section 2(a) of H.R. 1900, amending Section 3(b)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(b)(1))
Expedited Review for Bank Holding Company Applications
This provision requires the Federal Reserve Board to notify an applicant within 30 days (extendable by 30 days for complex cases) whether their application for a bank holding company acquisition is complete or what additional information is needed. If the applicant responds, the record is deemed complete unless the Board finds the response materially deficient and notifies the applicant within 30 days. Crucially, the Board must grant or deny the application within 90 days of its initial submission, regardless of completeness, or it is automatically deemed granted. The Board cannot use third-party information to determine completeness.
Supporters argue
Supporters argue this provision streamlines a historically slow and often opaque process, providing much-needed certainty and efficiency for bank holding companies. This can facilitate beneficial mergers, strengthen institutions, and allow for quicker responses to market conditions, including preventing potential bank failures by enabling faster acquisitions of distressed institutions.
Critics contend
Critics contend that the strict 90-day deadline, especially the 'deemed granted' clause and the restriction on using third-party information for completeness, could force regulators to approve complex transactions without sufficient due diligence. This could increase systemic risk, reduce competition, and potentially harm consumers if problematic acquisitions are rushed through.
Tradeoffs
Balances the desire for regulatory efficiency and market responsiveness against the need for thorough regulatory oversight to ensure financial stability and consumer protection.
Section 2(b) of H.R. 1900, amending Section 10(e) of the Home Owners' Loan Act (12 U.S.C. 1467a(e))
Expedited Review for Savings and Loan Holding Company Applications
This provision mirrors the changes made for bank holding companies, applying the same 30-day (plus 30-day extension) completeness notification requirement and the 90-day 'deemed granted' final decision deadline to applications related to savings and loan holding companies. It also prohibits the Board from using third-party information to determine application completeness.
Section 2(c) of H.R. 1900, amending Section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c))
Expedited Review for Insured Depository Institution Merger Applications
This provision extends the same procedural changes and deadlines to merger applications for insured depository institutions, which are reviewed by the 'responsible agency' (e.g., FDIC, OCC, or Federal Reserve, depending on the institution type). It mandates a 30-day (plus 30-day extension for 'unusually complex' cases) completeness notification, a 90-day 'deemed granted' final decision deadline from initial submission, and restricts the use of third-party information for completeness determinations.
Prohibits the Board/responsible agency from considering information provided by third parties (including reports, views, or recommendations) when determining whether an application record is complete.
Section 2(a)(4)(B)(iv), 2(b)(7)(D), and 2(c)(14)(D)
Why it matters:This is a technical detail within procedural language, but it has substantive implications for how regulators can interact with external stakeholders during the initial phase of application review. It could be seen as standard legislative drafting for procedural rules or as a deliberate attempt to limit external influence on the completeness determination.
Case for: Proponents argue this streamlines the completeness determination by focusing solely on the applicant's submission, preventing external parties from indefinitely delaying the process by submitting extraneous information. It ensures the applicant knows exactly what is required from them.
Case against: Opponents might argue that excluding third-party information from the completeness determination could prevent regulators from identifying early on if an application is fundamentally lacking critical context or data that only external parties could highlight, potentially leading to a deficient 'complete' record.
Estimated impact: Could reduce the time taken to deem an application complete, but might also reduce the breadth of initial information considered.
Mandates that the Board/responsible agency shall grant or deny an application not later than 90 days after its initial submission, regardless of whether the record was complete, and if no determination is made, the application is deemed granted.
Section 2(a)(4)(C)(i)-(ii), 2(b)(8)(A)-(B), and 2(c)(15)(A)-(B)
Why it matters:This is a core operative mechanism of the bill, phrased directly. Its 'burial' is more in its specific implications rather than its textual obscurity. It's a strong legislative tool to ensure action.
Case for: Proponents argue this is the ultimate mechanism to force regulatory action, preventing indefinite delays and ensuring certainty for applicants. It places the burden on the agency to act promptly.
Case against: Opponents argue this creates a dangerous incentive for regulators to rush approvals or risk automatically granting potentially harmful applications, especially if the initial submission was incomplete or complex issues arose during review.
Estimated impact: Could significantly reduce average approval times, but potentially at the cost of thoroughness for complex cases.