Senate passes CRA resolution on OCC merger rule

WASHINGTON — The Senate on Wednesday voted 52-47 to approve a Congressional Review Act resolution overturning a Biden-era rule updating the review of bank mergers that eliminated an expedited review process, among other provisions. 

The measure in the Senate was introduced by Sen. John Kennedy, R-La., and joins a companion bill in the House by Rep. Andy Barr, R-Ky. The CRA resolution is pending in the House, but it is expected to pass and be signed into law by President Donald Trump.

“Big government shouldn’t stand in the way of healthy bank mergers that occur in the free market and serve consumers and job creators,” Kennedy said in a statement. “In order to stabilize the banking industry and protect the Americans who depend on strong banks, Congress should quickly reverse the Biden administration’s bureaucratic rule.” 

It will likely join a queue of other financial policy CRAs awaiting Trump’s final signature, including one that overturns the Consumer Financial Protection Bureau’s cap on overdraft fees and another rule that would have heightened the bureau’s oversight of nonbank financial firms. 

Its passage would not only overturn the rule, finalized under the leadership of former acting Comptroller of the Currency Michael Hsu, but it would prohibit the agency from issuing a substantially similar one in the future unless Congress authorizes it, potentially making it much more difficult for the OCC to pursue bank merger rules in the future.

On Thursday, the Office of the Comptroller of the Currency adopted an interim rule that would amend that rule passed by the Biden administration anyway. It “restores the streamlined application and expedited review to the OCC’s procedures for evaluating applications under the Bank Merger Act,” the agency said. 

“The OCC’s actions today reduce burden and uncertainty for banks and supports a regulatory framework for bank mergers that is effective and not excessive,” said acting Comptroller of the Currency Rodney Hood. “Making it easier for well-managed and well-capitalized banks to merge promotes competition and facilitates economic growth and innovation.”

Both actions come after the Trump administration approved Capital One’s $35.3 billion acquisition of Discover, a move that will create the largest credit card lender in the country. 

The regulatory landscape for banks is likely to further get easier when it comes to M&A. Barr has also introduced a bill that would tighten the timeliness requirements for the Federal Reserve to consider bank mergers and introduce much tougher standards for the central bank to meet once a merger application is submitted.

The board of the Federal Deposit Insurance Corp. voted earlier this year to nullify bank merger standards finalized in 2024, which would have heightened scrutiny on bank merger policy in general. Specifically, the 2024 guidance would have put particular emphasis on assessing the post-merger institution’s financial stability and its ability to meet the needs of low- to moderate-income individuals.

Hood has said that he plans to talk to the Justice Department to reduce merger standards, and suggested that the OCC would revisit a key measure of consolidation that regulators use to measure the competitive effects of mergers, known as the Herfindahl-Hirschman Index, specifically by adding credit union data. 

And Jonathan Gould, who awaits a final confirmation vote to lead the OCC from the full Senate, is also expected to take a more permissive stance toward bank merger guidelines.