A substantive modification. v2 significantly alters the competitive review process for financial institution mergers under $10 billion in assets by changing the directive from "shall find" no anti-competitive effects to "shall not consider" such effects. It also removes the requirement for regulators to consider a broad range of non-traditional financial entities in competitive factor reports and introduces a mechanism to adjust the $10 billion asset threshold based on GDP.
Bank Competition Modernization Act
- Sponsor
- Rep. Fitzgerald, Scott [R-WI-5]
- Committees
- Financial Services Committee (primary)
- Last action
- Nov 4, 2025
Bottom line
The bill streamlines the merger approval process for smaller banks and financial holding companies by removing antitrust considerations for transactions involving entities under a $10 billion asset threshold.
What it actually does
This bill amends the Federal Deposit Insurance Act, the Bank Holding Company Act of 1956, and the Home Owners' Loan Act to exempt certain financial institution mergers and acquisitions from antitrust review. Specifically, if a proposed transaction results in an entity with less than $10 billion in assets, federal regulators would no longer be required to consider whether the transaction would create a monopoly or substantially lessen competition. The $10 billion threshold would be adjusted annually based on changes in nominal gross domestic product.
Proponents argue
Proponents argue that the bill reduces unnecessary regulatory burdens on smaller financial institutions, allowing them to achieve greater efficiencies and better compete with larger banks. They contend that transactions involving institutions under $10 billion in assets pose minimal risk to overall market competition and that the current review process is overly cumbersome for these smaller entities. This measure would foster growth and stability in community banking.
Opponents contend
Opponents contend that removing antitrust review for any financial mergers, regardless of size, could lead to reduced competition in local markets, potentially harming consumers through fewer choices, higher fees, or less favorable lending terms. They argue that even smaller mergers, when aggregated, can contribute to market concentration and that the $10 billion threshold, especially with GDP indexing, may be too high to adequately protect competitive landscapes.
The bill is concise and relatively easy to read, allowing for a quick understanding of its core changes within a typical legislative review timeframe.
Section 2(a), Federal Deposit Insurance Act (12 U.S.C. 1828(c))
Exemption from Antitrust Review for FDIC-Insured Bank Mergers Under $10 Billion
This provision amends the Federal Deposit Insurance Act to state that if a proposed merger transaction would result in an FDIC-insured institution with less than $10 billion in assets, the responsible agency (e.g., FDIC, OCC, Federal Reserve) shall not consider whether the merger would create a monopoly or substantially lessen competition. This removes a key antitrust safeguard for smaller bank mergers.
Supporters argue
Supporters argue this provision will significantly reduce the time and cost associated with merger applications for smaller banks, allowing them to consolidate efficiently, achieve economies of scale, and better serve their communities without posing a systemic risk to national competition.
Critics contend
Critics contend that removing competitive review for these mergers, even if small, could lead to a gradual erosion of competition in specific geographic markets, particularly in rural areas where fewer banking options exist. They argue that the cumulative effect of many such mergers could be detrimental to consumer choice and financial innovation.
Tradeoffs
The provision balances the desire to reduce regulatory burden on smaller financial institutions against the potential risk of diminishing competition in local banking markets.
Section 2(b), Bank Holding Company Act of 1956 (12 U.S.C. 1842(c))
Exemption from Antitrust Review for Bank Holding Company Transactions Under $10 Billion
This section extends the same antitrust review exemption to acquisitions, mergers, or consolidations involving bank holding companies. If the resulting company has less than $10 billion in assets, the Federal Reserve Board would not consider whether the transaction would create a monopoly or substantially lessen competition in the business of banking.
Section 2(c), Home Owners' Loan Act (12 U.S.C. 1467a(e))
Exemption from Antitrust Review for Savings and Loan Holding Company Transactions Under $10 Billion
This provision applies the same principle to savings and loan holding companies. If a proposed transaction under the Home Owners' Loan Act results in a company with less than $10 billion in assets, the Federal Reserve Board would not consider its potential to create a monopoly or substantially lessen competition in the savings and loan business.
Each amendment includes a 'Threshold Adjustment' clause, which mandates that the $10 billion asset figure be adjusted annually by a percentage equal to the increase in the nominal gross domestic product (GDP) of the United States. The Bureau of Economic Analysis's GDP statistics are to be used for this determination.
Section 2(a)(2)(B), Section 2(b)(8)(B), and Section 2(c)(8)(B)
Why it matters:This is standard legislative practice for indexing monetary thresholds to economic indicators, ensuring the threshold remains relevant over time without requiring constant legislative updates. It is not necessarily evasive but requires careful reading to understand the dynamic nature of the cap.
Case for: Proponents would argue that indexing the threshold to nominal GDP ensures that the bill's provisions remain appropriate for the size and scale of the economy over time, preventing the threshold from becoming outdated due to inflation or economic growth. This provides long-term regulatory stability.
Case against: Opponents might argue that tying the threshold to nominal GDP could allow it to grow significantly over decades, potentially expanding the scope of the antitrust exemption beyond what was initially intended or justified. They may prefer a fixed threshold or one tied to a more conservative economic indicator.
Estimated impact: This provision ensures the $10 billion threshold is not static and will increase over time with economic growth, potentially expanding the number of transactions eligible for the antitrust review exemption in the future.