H.R. 6556

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6556 Engrossed in House (EH)]

<DOC>

119th CONGRESS
2d Session
H. R. 6556

_______________________________________________________________________

AN ACT

To prohibit the use of certain concentration limit exceptions with 
respect to mergers involving a failed bank unless the applicable agency 
determines such use is necessary to prevent significant economic 
disruption or significant adverse effects on financial stability, and 
for other purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Failing Bank Acquisition Fairness 
Act''.

SEC. 2. CONCENTRATION LIMIT EXCEPTIONS ONLY AVAILABLE TO AVOID SERIOUS 
ADVERSE ECONOMIC OR FINANCIAL EFFECTS.

(a) Concentration Limits With Respect to Deposits.--
(1) Federal deposit insurance act.--The Federal Deposit 
Insurance Act (12 U.S.C. 1811 et seq.) is amended--
(A) in section 18(c)(13)--
(i) by amending subparagraph (B) to read as 
follows:
``(B) Subparagraph (A) shall not apply to an interstate merger 
transaction if--
``(i) such interstate merger transaction involves 1 or more 
insured depository institutions in default or in danger of 
default and the responsible agency determines, based on clear 
and convincing evidence, that consummation of the proposed 
interstate merger transaction is necessary to prevent 
significant economic disruption or significant adverse effects 
on financial stability, and the Corporation has not received 
any qualified bid from a company that is not subject to the 
prohibition in subparagraph (A); or
``(ii) the Corporation provides assistance under section 13 
to facilitate such interstate merger transaction and the 
responsible agency determines, based on clear and convincing 
evidence, that consummation of the proposed interstate merger 
transaction is necessary to prevent significant economic 
disruption or significant adverse effects on financial 
stability, and the Corporation has not received any qualified 
bid from a company that is not subject to the prohibition in 
subparagraph (A).''; and
(ii) in subparagraph (C)--
(I) in clause (i), by striking 
``and'' at the end;
(II) in clause (ii), by striking 
the period at the end and inserting a 
semicolon; and
(III) by adding at the end the 
following:
``(iii) the term `qualified bid' means an application, 
proposed application, or bid from a company where--
``(I) if applicable, the company, any affiliate 
insured depository institution, and any affiliate 
depository institution holding company is well 
capitalized and well managed, as of the date of the 
application, proposed application, or bid; and
``(II) upon consummation of the transaction, the 
resulting insured depository institution is well 
capitalized;
``(iv) the term `well capitalized'--
``(I) with respect to an insured depository 
institution, has the meaning given such term in section 
38(b) (12 U.S.C. 1831o(b));
``(II) with respect to a bank holding company, has 
the meaning given such term in section 2(o)(1)(B) of 
the Bank Holding Company Act of 1956 (12 U.S.C. 
1841(o)(1)(B));
``(III) with respect to a savings and loan holding 
company, has the meaning given such term in section 
238.2 of title 12, Code of Federal Regulations; and
``(IV) with respect to a company that is not an 
insured depository institution, bank holding company, 
or savings and loan holding company, means maintaining 
equity capital that the Corporation determines is 
commensurate with the capital maintained by an insured 
depository institution that is well capitalized; and
``(v) the term `well managed' has the meaning given such 
term in section 2(o)(9) of the Bank Holding Company Act of 1956 
(12 U.S.C. 1841(o)(9)).''; and
(B) in section 44, by amending subsection (e) to 
read as follows:
``(e) Exception for Banks in Default or in Danger of Default.--
``(1) General exception.--The responsible agency may, 
without regard to paragraph (1), (3), (4), or (5) of subsection 
(b) or paragraph (2), (4), or (5) of subsection (a), approve an 
application under subsection (a)(1) for approval of a merger 
transaction if--
``(A) the merger transaction involves 1 or more 
banks in default or in danger of default; or
``(B) the Corporation provides assistance under 
section 13(c) to facilitate such merger transaction.
``(2) Concentration limit exception.--The responsible 
agency may, without regard to subsection (b)(2), approve an 
application under subsection (a)(1) for approval of a merger 
transaction if--
``(A) the merger transaction involves 1 or more 
banks in default or in danger of default and the 
responsible agency determines, based on clear and 
convincing evidence, that consummation of the proposed 
interstate merger transaction is necessary to prevent 
significant economic disruption or significant adverse 
effects on financial stability, and the Corporation has 
not received any qualified bid from another institution 
that is not subject to the prohibition in subsection 
(b)(2); or
``(B) the Corporation provides assistance under 
section 13(c) to facilitate such merger transaction and 
the responsible agency determines, based on clear and 
convincing evidence, that consummation of the proposed 
interstate merger transaction is necessary to prevent 
significant economic disruption or significant adverse 
effects on financial stability, and the Corporation has 
not received any qualified bid from another institution 
that is not subject to the prohibition in subsection 
(b)(2).
``(3) Qualified bid defined.--In this subsection, the term 
`qualified bid' has the meaning given that term in section 
18(c)(13)(C).''.
(2) Bank holding company act of 1956.--The Bank Holding 
Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended--
(A) in section 3(d), by amending paragraph (5) to 
read as follows:
``(5) Exception for banks in default or in danger of 
default.--
``(A) General exception.--The Board may, without 
regard to subparagraph (B) or (D) of paragraph (1) or 
paragraph (3), approve an application pursuant to 
paragraph (1)(A) if--
``(i) the application is for an acquisition 
of 1 or more banks in default or in danger of 
default; or
``(ii) the application is for an 
acquisition with respect to which assistance is 
provided under section 13(c) of the Federal 
Deposit Insurance Act.
``(B) Concentration limit exception.--The Board 
may, without regard to paragraph (2), approve an 
application pursuant to paragraph (1)(A) if--
``(i) the application is for the 
acquisition of 1 or more banks in default or in 
danger of default and the Board determines, 
based on clear and convincing evidence, that 
consummation of the proposed acquisition is 
necessary to prevent significant economic 
disruption or significant adverse effects on 
financial stability, and the Corporation has 
not received any qualified bid from another 
institution that is not subject to the 
prohibition in paragraph (2); or
``(ii) the application is for an 
acquisition with respect to which assistance is 
provided under section 13(c) of the Federal 
Deposit Insurance Act and the Board determines, 
based on clear and convincing evidence, that 
consummation of the proposed acquisition is 
necessary to prevent significant economic 
disruption or significant adverse effects on 
financial stability, and the Corporation has 
not received any qualified bid from another 
institution that is not subject to the 
prohibition in paragraph (2).
``(C) Qualified bid defined.--In this paragraph, 
the term `qualified bid' has the meaning given that 
term in section 18(c)(13)(C) of the Federal Deposit 
Insurance Act.''; and
(B) in section 4(i)(8), by amending subsection (B) 
to read as follows:
``(B) Exception.--Subparagraph (A) shall not apply 
to an acquisition if--
``(i) such acquisition involves an insured 
depository institution in default or in danger 
of default and the Board determines, based on 
clear and convincing evidence, that 
consummation of the proposed acquisition is 
necessary to prevent significant economic 
disruption or significant adverse effects on 
financial stability, and the Corporation has 
not received any qualified bid (as defined in 
section 18(c)(13)(C) of the Federal Deposit 
Insurance Act) from another institution that is 
not subject to the prohibition in paragraph 
(2); or
``(ii) the Federal Deposit Insurance 
Corporation provides assistance under section 
13 of the Federal Deposit Insurance Act to 
facilitate such acquisition and the Board 
determines, based on clear and convincing 
evidence, that consummation of the proposed 
acquisition is necessary to prevent significant 
economic disruption or significant adverse 
effects on financial stability, and the 
Corporation has not received any qualified bid 
(as defined in section 18(c)(13)(C) of the 
Federal Deposit Insurance Act) from another 
institution that is not subject to the 
prohibition in paragraph (2).''.
(b) Concentration Limit With Respect to Consolidated Liabilities.--
Section 14(c) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1852(c)) is amended--
(1) by redesignating paragraphs (1), (2), and (3) as 
subparagraphs (A), (B), and (C), respectively;
(2) by striking ``With the'' and inserting the following:
``(1) In general.--With the''; and
(3) by adding at the end the following:
``(2) Limitation.--The Board may provide written consent 
for an acquisition described in paragraph (1)(A) or in 
paragraph (1)(B) only if the Board determines, based on clear 
and convincing evidence, that consummation of the proposed 
acquisition is necessary to prevent significant economic 
disruption or significant adverse effects on financial 
stability, and the Corporation has not received any qualified 
bid (as defined in section 18(c)(13)(C) of the Federal Deposit 
Insurance Act) from another institution that is not subject to 
the prohibition in subsection (b).''.

SEC. 3. CONGRESSIONAL NOTIFICATION AND JUSTIFICATION FOR WAIVERS.

(a) In General.--Whenever the Board of Governors of the Federal 
Reserve System, the Comptroller of the Currency, or the Federal Deposit 
Insurance Corporation waives a concentration limit under section 
18(c)(13)(B) or section 44(e) of the Federal Deposit Insurance Act or 
under section 3(d)(5), section 4(i)(8)(B), or section 14(c)(2) of the 
Bank Holding Company Act of 1956, in connection with the acquisition of 
a bank or insured depository institution in default or in danger of 
default, or in connection with an acquisition with respect to which the 
Federal Deposit Insurance Corporation provides assistance under section 
13 of the Federal Deposit Insurance Act, the waiving agency and the 
Federal Deposit Insurance Corporation, jointly, shall, not later than 
30 days after such waiver, submit a written report to the Committee on 
Financial Services of the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs in the Senate containing--
(1) a justification for the waiver, including an analysis 
of why it was necessary to prevent significant economic 
disruption or significant adverse effects on financial 
stability;
(2) a description of alternative bids or outcomes 
considered, including efforts to solicit and encourage bids 
from entities that would not require a waiver;
(3) an explanation of why alternative bids were not 
selected, if applicable; and
(4) any recommendations for legislative or regulatory 
changes to improve competition in future insured depository 
institution resolutions.
(b) Public Disclosure.--The waiving agency submitting a report 
under subsection (a) and the Federal Deposit Insurance Corporation 
shall make the report publicly available on their respective websites, 
subject to redactions for confidential supervisory information and any 
other information described under section 552(b) of title 5, United 
States Code.

SEC. 4. LIMITATION ON CONSIDERING BAD FAITH BIDS IN LEAST COST 
DETERMINATION.

Section 13(c)(4) of the Federal Deposit Insurance Act (12 U.S.C. 
1823(c)(4)) is amended by adding at the end the following:
``(I) Limitation on considering bad faith bids.--In 
making a determination under this paragraph of whether 
an exercise of authority is the least costly to the 
Deposit Insurance Fund, any application, proposed 
application, or bid that would result in violation of--
``(i) section 18(c)(13) or 44(b)(2), or
``(ii) section 3(d)(2), 4(i)(8), or 14 of 
the Bank Holding Company Act of 1956,
shall not be considered a possible method for meeting 
the Corporation's obligation under this section for 
purposes of subparagraph (A).''.

SEC. 5. DISCRETIONARY SURPLUS FUND.

(a) In General.--The dollar amount specified under section 
7(a)(3)(A) of the Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is 
reduced by $2,000,000.
(b) Effective Date.--The amendment made by subsection (a) shall 
take effect on September 1, 2036.

Passed the House of Representatives July 14, 2026.

Attest:

Clerk.
119th CONGRESS

2d Session

H. R. 6556

_______________________________________________________________________

AN ACT

To prohibit the use of certain concentration limit exceptions with 
respect to mergers involving a failed bank unless the applicable agency 
determines such use is necessary to prevent significant economic 
disruption or significant adverse effects on financial stability, and 
for other purposes.