WASHINGTON — President Donald Trump on Friday night signed a rule that formally eliminates the Office of the Comptroller of the Currency’s stricter evaluations of sure bank mergers.
Trump signed the Congressional Review Act decision Friday nullifying the Office of the Comptroller of the Currency’s Biden-era rule that acquired rid of an expedited rule course of for small banks, amongst different provisions.
The OCC, then led by performing Comptroller Michael Hsu, stated the adjustments elevated transparency within the merger overview course of. The adjustments got here as half of a broader push by the Biden administration to scrutinize mergers.
The CRA decision was launched by Sen. John Kennedy, R-La., within the Senate and Rep. Andy Barr, R-Ky., within the House. It handed by each chambers of Congress largely on social gathering strains final month.
“Small banks rely upon mergers to develop, innovate, and higher serve their communities,” stated House Financial Services Committee Chairman French Hill, R-Ark., in a press release. “This decision restores competitors, client alternative, and a extra balanced regulatory strategy.”
Trump’s signing of the decision not solely nullifies the OCC’s Biden-era merger guidelines but in addition bars the company from enterprise any “considerably related” rulemakings sooner or later with out the approval of Congress. Whether a rule would meet that “considerably related” normal, nonetheless, would probably be as much as a court docket to resolve.
The OCC itself already rolled again some of these Biden-era guidelines underneath the management of performing Comptroller Rodney Hood, who was tapped to steer the company on an interim foundation in February. In May, the OCC issued an interim last rule rescinding a coverage assertion that mandated monetary stability guidelines for any bank merger creating an establishment with $50 billion in belongings or extra.
Republicans within the 119th Congress have used CRA to nullify different Biden-era bank regulatory guidelines. In mid-May, Trump signed the Republican-led Congressional Review Act decision overturning the Consumer Financial Protection Bureau rule that will have restricted many overdraft charges. At the identical time, he signed a separate CRA decision for the CFPB’s bigger participant rule, which might have let the bureau’s examiners decide whether or not digital cost suppliers that course of not less than 50 million transactions annually adjust to the Electronic Fund Transfer Act, in addition to different client safety legal guidelines.
And Republicans are pursuing different avenues to revive the shot clock on bank mergers. Barr has additionally launched a invoice that will put timing guardrails on the Federal Reserve in relation to bank merger approval, tightening the timeliness necessities for the Fed to contemplate bank mergers and introduce a lot more durable requirements for the central bank to satisfy as soon as a merger software is submitted.
“Bank mergers create competitors and effectivity within the banking system,” Barr stated after Trump signed the CRA decision. “By eliminating this rule, we are going to take away pointless guardrails on the bank merger course of that make smaller and medium-size banks much less aggressive. This is one other win for President Trump, who’s making our economic system stronger by chopping authorities red-tape and unleashing the free market.”
The signed CRA decision additionally represents a win for banks, who’ve supported the concept of shortening turnaround instances for bank merger approvals and who supported the preliminary CRA introductions.
“The ABA submitted intensive feedback on the proposed rule in April 2024,” the American Bankers Association stated in a letter to House management in May. “The company’s last rule, nonetheless, didn’t deal with a number of of the issues outlined in ABA’s feedback. Instead, the OCC created unhelpful new requirements that lack transparency and essential predictability that replicate a level of bias in opposition to mergers.”
