Senate approves legislation to reverse OCC prohibition on fast-tracked merger appraisals
In recent developments, the Office of the Comptroller of the Currency (OCC) has faced a challenge to its September 2024 rule that ended expedited merger reviews for banks. This rule, aimed at increasing transparency in the merger evaluation process, has raised concerns among community banks and some lawmakers.
The rule, which has resulted in a more thorough and lengthier analysis of proposed bank consolidations, has been criticised for potentially slowing down the process and adding regulatory scrutiny. Community banks, which often rely on the expedited review process to merge more quickly and navigate regulatory approvals with less delay, are particularly affected by this change.
Rep. Andy Barr, R-KY, has introduced a House bill to nullify the OCC rule, arguing that it unintentionally limits community banks' ability to compete in the marketplace. Similarly, Republican lawmakers in both houses of Congress have introduced resolutions to overturn the OCC rule through the Congressional Review Act, stating that the regulator is reaching beyond its mandate.
Sen. Elizabeth Warren, D-MA, wrote to the OCC's acting chief, Michael Hsu, accusing the OCC of talking tough but failing to follow through after proposing the halt to expedited reviews. The Senate voted on Wednesday to overturn the rule, with a 52-47 vote, and Sen. John Kennedy, R-LA, introduced a companion resolution in the Senate.
However, as of mid-2025, explicit Congressional efforts to overturn this rule are not documented in available sources. Broader federal banking regulatory reforms like the GENIUS Act, enacted in June 2025, have been enacted but do not specifically address the merger review process.
Meanwhile, Fed Gov. Michelle Bowman has advocated for an approach to bank regulation that acknowledges the banking system's role in business formation, economic expansion, and opportunity. The updated OCC rule puts greater focus on the agency's effort to weigh the financial stability risk of approving a deal against the risk of denying it. Rep. Barr has been advocating for a "shot clock" to prevent banking transactions from dragging out.
The Federal Deposit Insurance Corp. Acting Chair Travis Hill has prioritized reducing the timeline of bank merger approvals. The Capital One-Discover deal was approved, but Discover is required to address three consent orders stemming from a price misclassification issue with a penalty of roughly $1.5 billion.
These developments highlight the ongoing debate surrounding bank regulation and the role of expedited merger reviews in promoting competition and supporting community banks. As the situation evolves, it is crucial to monitor these discussions and their potential impact on the banking sector.
- The rule change implemented by the Office of the Comptroller of the Currency (OCC) regarding expedited merger reviews for banks is a subject of discussion in the realm of politics, as evidenced by House bills and Senate resolutions being introduced to either nullify or overturn the rule.
- The focus on financial stability and regulatory scrutiny, as observed in the updated OCC rule, is a significant aspect of the broader business and finance discourse, particularly in relation to its potential effects on community banks' competitiveness and growth.
