Bill Summary
The "Bank Competition Modernization Act" aims to amend existing banking legislation, specifically the Federal Deposit Insurance Act, the Bank Holding Company Act of 1956, and the Home Owners' Loan Act, to streamline the evaluation process for proposed banking mergers and acquisitions involving institutions with less than $10 billion in assets.
Key provisions of the Act include:
1. **Competitive Factor Considerations**: The Act modifies existing regulations to exempt proposed transactions that would result in institutions with less than $10 billion in assets from scrutiny regarding potential monopolistic effects or substantial lessening of competition. This means that regulatory agencies will not assess whether these smaller transactions could harm competition within the banking sector.
2. **Threshold Adjustment**: The Act establishes a mechanism for adjusting the $10 billion asset threshold annually based on changes in the nominal gross domestic product (GDP) of the United States. This adjustment aims to keep the threshold relevant in the context of economic growth.
3. **Application to Various Entities**: The revised provisions apply to different types of banking entities, including banks, bank holding companies, and savings and loan holding companies, ensuring a consistent approach across these institutions.
In summary, the legislation seeks to promote competition and ease regulatory burdens on smaller banking institutions by allowing more flexibility in mergers and acquisitions involving entities below a specified asset threshold.
Possible Impacts
The **Bank Competition Modernization Act** could affect people in several ways:
1. **Increased Access to Banking Services**: By allowing mergers and acquisitions that result in institutions with less than $10 billion in assets without the same level of scrutiny regarding monopolistic practices, smaller banks may be encouraged to merge or consolidate. This could lead to a more diverse range of banking services, particularly in underserved areas, thereby increasing access to credit and financial products for consumers who may have limited options.
2. **Enhanced Competition Among Smaller Banks**: The legislation could lead to a more competitive environment among smaller banks and financial institutions. With fewer regulatory hurdles for mergers, these institutions may be able to pool resources, reduce costs, and innovate their service offerings. This could ultimately benefit consumers by providing more competitive interest rates and lower fees, as smaller banks strive to attract customers in a more competitive landscape.
3. **Potential Risks of Reduced Oversight**: While the bill aims to promote competition, it may also lead to concerns about reduced oversight of smaller institutions. If smaller banks are allowed to merge without significant regulatory scrutiny, there could be a risk of creating entities that are still too large to fail, which might lead to potential financial instability. Consumers could face greater risks if these institutions engage in reckless lending practices or if their financial health deteriorates without adequate regulatory checks.
Overall, while the legislation aims to foster competition and potentially improve service offerings, it also raises questions about the balance between encouraging market activity and ensuring sufficient oversight to protect consumers and the financial system.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5262 Reported in House (RH)]
<DOC>
Union Calendar No. 317
119th CONGRESS
1st Session
H. R. 5262
[Report No. 119-365]
To amend the Federal Deposit Insurance Act, the Bank Holding Company
Act of 1956, and the Home Owners' Loan Act to require the consideration
of certain entities and factors when evaluating proposed acquisitions,
mergers, consolidations, assumptions of liabilities, or transfers of
assets, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 10, 2025
Mr. Fitzgerald introduced the following bill; which was referred to the
Committee on Financial Services
November 4, 2025
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on
September 10, 2025]
_______________________________________________________________________
A BILL
To amend the Federal Deposit Insurance Act, the Bank Holding Company
Act of 1956, and the Home Owners' Loan Act to require the consideration
of certain entities and factors when evaluating proposed acquisitions,
mergers, consolidations, assumptions of liabilities, or transfers of
assets, 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 ``Bank Competition Modernization
Act''.
SEC. 2. COMPETITIVE FACTOR CONSIDERATIONS.
(a) In General.--Section 18(c) of the Federal Deposit Insurance Act
(12 U.S.C. 1828(c)) is amended--
(1) in paragraph (4)(C)--
(A) in clause (i), by striking ``or'' at the end;
(B) in clause (ii), by striking the period at the
end and inserting ``; or''; and
(C) by adding at the end the following:
``(iii) the proposed merger transaction
would result in an entity with less than
$10,000,000,000 in assets.''; and
(2) by adding at the end the following:
``(14) For Merger Transactions Resulting in Institutions With Less
Than $10,000,000,000 in Assets.--
``(A) In general.--Notwithstanding paragraph (5), if a
proposed merger transaction would result in an institution with
less than $10,000,000,000 in assets, then the responsible
agency shall not consider whether such merger transaction
would--
``(i) result in a monopoly, or would be in
furtherance of any combination or conspiracy to
monopolize or to attempt to monopolize the business of
banking in any part of the United States; and
``(ii) have the effect in any section of the
country of substantially lessening competition, tending
to create a monopoly, or in any other manner
restraining trade.
``(B) Threshold adjustment.--
``(i) In general.--At the end of each year for
which the nominal gross domestic product of the United
States increases (a `covered year'), the Corporation
shall adjust the dollar figures described in
subparagraph (A) and paragraph (4)(C)(iii) by a
percentage equal to the percentage increase (if any)
between--
``(I) the nominal gross domestic product of
the United States for the year, during the
preceding 5 years, with respect to which the
nominal gross domestic product of the United
States was the highest; and
``(II) the nominal gross domestic product
of the United States for the covered year.
``(ii) Determination of gdp.--In this paragraph,
the Corporation shall use nominal gross domestic
product statistics determined by the Bureau of Economic
Analysis.''.
(b) For Bank Holding Companies.--Section 3(c) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1842(c)) is amended by adding at the end
the following:
``(8) For proposed transactions resulting in companies with
less than $10,000,000,000 in assets.--
``(A) In general.--Notwithstanding paragraph (1),
if a proposed acquisition, merger, or consolidation
under this section would result in a company with less
than $10,000,000,000 in assets, then the Board shall
not consider whether such acquisition, merger, or
consolidation would--
``(i) result in a monopoly, or would be in
furtherance of any combination or conspiracy to
monopolize or to attempt to monopolize the
business of banking in any part of the United
States; and
``(ii) have the effect in any section of
the country of substantially lessening
competition, tending to create a monopoly, or
in any other manner restraining trade.
``(B) Threshold adjustment.--
``(i) In general.--At the end of each year
for which the nominal gross domestic product of
the United States increases (a `covered year'),
the Board shall adjust the dollar figure
described in subparagraph (A) by a percentage
equal to the percentage increase (if any)
between--
``(I) the nominal gross domestic
product of the United States for the
year, during the preceding 5 years,
with respect to which the nominal gross
domestic product of the United States
was the highest; and
``(II) the nominal gross domestic
product of the United States for the
covered year.
``(ii) Determination of gdp.--In this
paragraph, the Board shall use nominal gross
domestic product statistics determined by the
Bureau of Economic Analysis.''.
(c) For Savings and Loan Holding Companies.--Section 10(e) of the
Home Owners' Loan Act (12 U.S.C. 1467a(e)) is amended by adding at the
end the following:
``(8) For proposed transactions resulting in companies with
less than $10,000,000,000 in assets.--
``(A) In general.--Notwithstanding subparagraphs
(A) and (B) of paragraph (2), if a proposed transaction
under this section would result in a company with less
than $10,000,000,000 in assets, then the Board shall
not consider whether the transaction would--
``(i) result in a monopoly, or would be in
furtherance of any combination or conspiracy to
monopolize or to attempt to monopolize the
savings and loan business in any part of the
United States; and
``(ii) have the effect in any section of
the country of substantially lessening
competition, tending to create a monopoly, or
in any other manner restraining trade.
``(B) Threshold adjustment.--
``(i) In general.--At the end of each year
for which the nominal gross domestic product of
the United States increases (a `covered year'),
the Board shall adjust the dollar figure
described in subparagraph (A) by a percentage
equal to the percentage increase (if any)
between--
``(I) the nominal gross domestic
product of the United States for the
year, during the preceding 5 years,
with respect to which the nominal gross
domestic product of the United States
was the highest; and
``(II) the nominal gross domestic
product of the United States for the
covered year.
``(ii) Determination of gdp.--In this
paragraph, the Board shall use nominal gross
domestic product statistics determined by the
Bureau of Economic Analysis.''.
Union Calendar No. 317
119th CONGRESS
1st Session
H. R. 5262
[Report No. 119-365]
_______________________________________________________________________
A BILL
To amend the Federal Deposit Insurance Act, the Bank Holding Company
Act of 1956, and the Home Owners' Loan Act to require the consideration
of certain entities and factors when evaluating proposed acquisitions,
mergers, consolidations, assumptions of liabilities, or transfers of
assets, and for other purposes.
_______________________________________________________________________
November 4, 2025
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed