Overview
Title
To specify when the record is complete on certain acquisition applications related to depository institution holding companies, and for other purposes.
ELI5 AI
In H. R. 1900, also known as the “Bank Failure Prevention Act of 2025,” the bill makes sure that when a company asks for permission to take over a bank, they get a quick "yes" or "no." If the people in charge of making the decision take too long, it's like an automatic "yes" is approved.
Summary AI
H. R. 1900, titled the “Bank Failure Prevention Act of 2025,” aims to clarify the process for determining when an application involving depository institution holding companies is complete. The bill requires the Board to inform applicants within 30 days if their application is complete, or if additional information is needed, with a possible extension for complex cases. It also mandates a final decision on applications within 90 days from initial submission, regardless of completeness at submission, and applications are automatically approved if no decision is made within this period. The bill ensures that only information provided by the applicant is considered when assessing application completeness.
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AnalysisAI
The bill titled “Bank Failure Prevention Act of 2025” is designed to provide clarity and structure regarding when a record is considered complete on acquisition applications pertaining to depository institution holding companies. The legislation outlines specific procedures and timelines for the Board responsible for reviewing these applications, aiming to improve transparency and efficiency in the decision-making process.
General Summary
The bill’s primary objective is to amend existing rules to ensure that the Board promptly communicates whether an application is complete. It establishes a timeframe within which the Board must notify applicants, determines completeness, and decides on the applications. Crucially, it stipulates that the decision must be made within 90 days of the application submission. If no decision is rendered within this period, the application is automatically approved. The bill applies to both bank holding companies under the Bank Holding Company Act of 1956 and savings and loan holding companies under the Home Owners' Loan Act.
Summary of Significant Issues
One significant issue highlighted in the bill is that should the Board fail to act within the specified 90-day period, applications are automatically granted. This could potentially result in oversight issues, allowing applications to be approved without thorough review. Moreover, the bill prohibits considering third-party information when determining application completeness, which could potentially neglect valuable insights from external sources. The bill also mentions the possibility of extending the initial 30-day notice period for unusually complex applications but does not clarify what constitutes such complexity. Lastly, there is redundancy in the language, as similar procedural descriptions are repeated for different types of holding companies.
Impact on the Public and Stakeholders
Broad Public Impact: For the general public, the bill could lead to more predictable and efficient procedures for handling acquisition applications related to depository institutions. This has the potential to enhance the stability and reliability of financial institutions people rely on for banking and investment services, potentially contributing to greater consumer confidence in these institutions.
Stakeholder Impact:
Depository Institution Holding Companies: These companies might benefit from clearer timelines and procedural expectations, leading to less uncertainty in the application process. However, the automatic approval could pose risks if the oversight is inadequate, which could negatively affect the financial stability of these institutions if unqualified applications are granted.
Regulatory Bodies/Board: The Board tasked with reviewing applications might face pressure to make timely decisions, potentially increasing the workload. The requirement to deny or approve within 90 days, regardless of the completeness of the application, might strain resources and operational capacity. The exclusion of third-party information from considerations could hamper the comprehensive assessment of applications, potentially affecting the quality of decisions made.
Third Parties: Organizations providing external insights, such as financial analysts or consultants, might see their roles diminished due to the exclusion of third-party information from the application review process. This could potentially undermine applications' overall evaluative depth.
Overall, the bill aims to streamline the acquisition application process for depository institutions, but its potential shortcomings raise concerns about whether it sufficiently safeguards against inadequate review or leverages all available information for decision-making.
Issues
The provision in Section 2(a)(4)(C)(ii) and Section 2(b)(8)(B) that allows applications to be deemed granted if the Board does not act within the specified time frame could lead to oversight issues and insufficient review of applications, potentially resulting in unqualified approvals.
The exclusion of third-party information as stated in Section 2(a)(4)(B)(iv) and Section 2(b)(7)(D) when determining the completeness of an application could overlook valuable external insights that might impact the decision-making process.
The language regarding the extension of the 30-day period for unusually complex applications in Section 2(a)(4)(B)(ii) and Section 2(b)(7)(B) is unclear as it does not define 'unusually complex', potentially leading to arbitrary or inconsistent extensions.
The repetitiveness in language across the Bank Holding Company Act and the Home Owners’ Loan Act amendments in Section 2(a) and Section 2(b) may contribute to unnecessary complexity, suggesting that simplification could improve clarity and reduce redundancy.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill provides its official title, which is the “Bank Failure Prevention Act of 2025”.
2. Complete record on an application Read Opens in new tab
Summary AI
This section outlines changes to how bank holding companies and savings and loan holding companies' applications are processed. Specifically, it lays down timelines by which the Board must notify applicants if their application records are complete, and it enforces deadlines for the Board to make decisions on these applications, ensuring they are resolved within 90 days from the initial submission date.