Senate approves measure reversing OCC blockade on swift merger approval process
The United States House of Representatives has passed a resolution to overturn a rule by the Office of the Comptroller of the Currency (OCC) regarding bank merger reviews. This decision, introduced by Republican lawmakers, is expected to rollback stricter bank merger review policies put in place by the previous administration.
The OCC's rule, proposed by acting chief Michael Hsu in 2023, aimed to increase transparency in the merger evaluation process. However, it has been met with criticism from some quarters, particularly Republican lawmakers who argue that it unintentionally limits community banks' ability to compete in the marketplace.
Sen. John Kennedy, R-LA, introduced a companion resolution, and the measure passed in the Senate on Wednesday by a 52-47 vote. The House followed suit, passing the resolution, and if signed by President Donald Trump, the OCC would be barred from issuing a "substantially" similar rule.
The OCC's rule was a rollback of a 1996 policy that deems bank deals as approved on the 15th day after the end of a comment period unless the regulator removes the filing from expedited processing. The Capital One-Discover deal, approved with the condition that Discover addresses three consent orders stemming from a price misclassification issue, was one of the deals that fell under this rule.
The price tag for addressing these consent orders is approximately $1.5 billion in penalties. Jeremy Kress, an associate professor of business law at the University of Michigan, argued against the Capital One-Discover deal, suggesting it allows Capital One to absorb a problematic institution.
The OCC approved 43 mergers in 2021, 30 in 2022, and 23 in 2023. Fed Gov. Michelle Bowman has advocated for an approach to bank regulation that acknowledges the banking system's role in driving business formation, economic expansion, and opportunity.
The FDIC also rescinded its 2024 bank merger policy in May 2025 and reinstated its prior, long-standing bank merger guidance from 1998, aiming to streamline and restore predictability to the bank merger process. Sen. Elizabeth Warren, D-MA, wrote to Hsu, accusing the OCC, even after proposing the halt to expedited reviews, of talking tough but failing to follow through.
Rep. Andy Barr has been advocating for a "shot clock" to prevent banking transactions from dragging out for at least a year. The Senate and House have each passed resolutions to overturn, through the CRA, a Consumer Financial Protection Bureau final rule that would cap overdraft fees at $5. The FDIC Acting Chair Travis Hill has prioritized curtailing the timeline of bank merger approvals, and Barr's House bill is pending a similar vote.
- The controversial OCC rule on bank merger reviews, met with criticism from Republican lawmakers and some business circles, is aimed at increasing transparency but has been argued to inadvertently hinder the competition of community banks.
- The ongoing debates in politics and general-news surrounding the OCC rule include discussions about a possible overturn of the rule by President Trump, as both the Senate and House have passed resolutions to do so through the Congressional Review Act.
