Reintroduction of Bill To Speed Up BHCA and HOLA Applications

The Trump Administration has made clear that it intends to lessen the barriers to bank merger and acquisition activity. As we previously noted, the FDIC has moved to lower some of the impediments to mergers under its 2024 Policy Statement. Now, Congress is stepping in to further advance that process. HR 1900—reintroduced by Rep. Andy Barr (R-KY) and referred to the House Committee on Financial Services on March 6, 2025—would significantly reform the application and approval process for acquisitions by bank holding companies and savings and loan holding companies by curtailing the timing for the Federal Reserve to act on these applications. We understand that the text of the bill, once made public, will be the same bill text as the version introduced in 2024.

The Federal Reserve would have 90 days total to approve or deny applications under the Bank Holding Company Act (BHCA) or Home Owners' Loan Act (HOLA), even if it asks for more information during that period. If it does ask for more information, the Federal Reserve must detail all additional information for the record to be complete.

The bill's streamlined process and strict deadlines aim to spur action on key applications. The enhanced clarity in communication and deadlines would reduce the risk of regulatory uncertainty, which may delay critical acquisitions/restructurings and lead to added contractual costs. It would benefit existing bank consolidation as well as newcomers, whether fintechs or otherwise, that want to acquire a bank. It should be considered to be in the same spirit as H.R. 478 (the "Promoting New Bank Formation Act"), introduced on January 16 by Rep. Barr, that would allow for a three-year phase-in period for de novo financial institutions to comply with federal capital standards.

Overview of the Bill

Rep. Barr first introduced the bill in 2024, but it failed to advance. With momentum building in favor of bank mergers among the federal banking agencies, Barr has reintroduced the bill as chairman of the House Financial Services Committee.

With 4,500 banks in the United States and fast-moving tech advances, the need for banks to securely scale—or otherwise adapt—to thrive is clear. Having a clear, transparent, predictable, and prompt review process is key to fulfilling those expectations.

At its core, the bill seeks to clarify and modify the processes for determining when an application is complete by amending the BHCA and HOLA. Under its current practice, the Federal Reserve can effectively hold up an application indefinitely by never deeming it complete.

1. Timelines for Applications

   The bill mandates specific timelines and communication protocols for applications. Notably, it introduces the following steps:

   • 30 days for notice to applicant. The Federal Reserve must notify the applicant within 30 days of receiving an application about whether the record is complete or if additional information is required. In cases where the application is complex, the Federal Reserve may extend the notice period for an additional 30 days.
   • 30 days to deem the record complete. If the Federal Reserve requests more information and the applicant submits the requested additional information, the record will be considered complete unless the Federal Reserve identifies material deficiencies within 30 days of receiving the response.
   • Exclusion of third-party information. The determination of whether a record is complete must be based only on information provided directly by the applicant, excluding any third-party reports, views, or recommendations. We read this as seeking to curtail the role of commenters, who nevertheless would still be able to submit their comments.
     
     
2. Timelines for Decision

The bill establishes clear deadlines for the approval or denial of acquisition applications:

• 90 days to decide. The Federal Reserve would be required to make a determination on an application no later than 90 days from the date of the initial submission, regardless of whether the application record was deemed complete or the Federal Reserve requests more information.
• Automatic approval. If the Federal Reserve does not make a determination within the 90-day period, the application would automatically be deemed approved.

Conclusion

HR 1900 aims to enhance the efficiency and predictability of bank holding company and savings and loan holding company applications. It is further evidence of the pro-industry priorities of the Trump Administration and its supporters in Congress. We anticipate that industry will welcome the amendments proposed by the bill as providing a more predictable process around which market participants can plan.

Welcome next steps—which can and should take place within the federal banking agencies without congressional action—would include:

• Updating and harmonizing merger guidelines designed for today's banking landscape of digital banking, non-bank competitors, including fintechs and, perhaps, de novo new banks, including those with "novel" charters.
• Reforming the CAMELS supervisory ratings system so it is more objective, allowing merger opportunities to be evaluated without the sometimes unrestrained leverage examiners have over banks.

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Should you need additional analysis or guidance in connection with planning how to respond to or navigate these changes, the DWT financial services team is prepared to assist.