Washington, D.C. – Today, Representatives Andy Barr (KY-06) and Scott Fitzgerald (WI-05) introduced the Bank Failure Prevention Act, a crucial step towards enhancing competition in the United States’ banking system. The bill requires the Federal Reserve to act on merger applications in a timely fashion. Doing so will end uncertainty, reduce the likelihood of banks to fail, and maintain the diverse U.S. banking ecosystem that is the envy of the world.

Under the current administration, there has been a negative posture towards mergers where many have been substantially delayed with little transparency from Democrat-appointed regulators. The Bank Failure Prevention Act will end the opaque, ambiguous process by requiring the Federal Reserve to act on merger applications within 90 days, seeking to mitigate the likelihood of bank failures by allowing for healthy mergers and acquisitions. Mergers increase competition and make the banking system more dynamic.  Allowing institutions to meet economies of scale through mergers fosters a vibrant economy and generates cost savings that are passed down to consumers.

"In the face of an administration that seems to fear healthy competition and growth in our banking sector, this bill sends a clear message: It's time to cut through the bureaucratic delays,” said Rep. Andy Barr. “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. This legislation is a step towards a more dynamic, diverse, and competitive banking environment, free from unnecessary regulatory paralysis.”

“The wave of regulations on mid-sized and regional banks from the Biden Administration is bound to lead to consolidation to overcome the compliance burden of these rules.  At the same time, Biden regulators review proposed bank deals at a glacial pace, leading to a relatively high degree of uncertainty about outcomes. The Bank Failure Prevention Act will ensure bank regulators make a timely decision on mergers to bring certainty to bank competition and consumer needs,” said Rep. Fitzgerald (WI-05).

The Representatives sent a letter to the federal financial regulations calling attention to this issue last year.