Federal Legislation
Congress Enacts Bank Merger Restrictions
February 02, 2026
Congress has enacted the Failing Bank Acquisition Fairness Act, which imposes new restrictions on waivers of concentration limits for mergers involving failed or failing banks. The Act requires that such waivers be granted only when necessary to prevent significant economic disruption or financial instability and when no qualified bids from smaller, well-capitalized institutions exist. Federal banking agencies including the FDIC, Federal Reserve Board, and OCC must report to Congress on waiver justifications, enhancing transparency and oversight. The legislation also limits consideration of bad faith bids in FDIC least cost determinations to promote fair competition and slow the concentration of banking assets among the largest institutions.
- Why this matters: Procurement professionals and contractors in the financial services sector should anticipate increased scrutiny and regulatory oversight in bank merger transactions involving failing institutions.
- The Act encourages competitive bidding from smaller banks, potentially expanding opportunities for regional and community banks in acquisition processes.
- Federal agencies involved in banking regulation will have enhanced reporting responsibilities, which may affect timelines and procedural requirements for merger approvals.
- Organizations engaged in financial institution consulting, legal advisory, and compliance services may see increased demand to support clients navigating the new regulatory framework.
The responsible agency determines, based on clear and convincing evidence, that consummation of the proposed acquisition is necessary to prevent significant economic disruption or significant adverse effects on financial stability, and the Corporation has not received any qualified bid from another institution that is not subject to the prohibition.
— Failing Bank Acquisition Fairness Act text
Agencies
Federal Deposit Insurance Corporation, Board of Governors of the Federal Reserve System, Comptroller of the Currency, Committee on Financial Services, Committee on Banking, Housing, and Urban Affairs
Locations
Sources
- H. Rept. 119-475 - FAILING BANK ACQUISITION FAIRNESS ACT · congress · Feb 02
- H. Rept. 119-475 - FAILING BANK ACQUISITION FAIRNESS ACT · congress · Feb 02