H.R. 6556 — Failing Bank Acquisition Fairness Act

This section narrows exceptions to federal deposit concentration limits for interstate bank mergers and acquisitions. It permits such transactions involving one or more institutions in default or in danger of default, or facilitated by FDIC assistance, only when the responsible agency finds, based on clear and convincing evidence, that the deal is necessary to prevent significant economic disruption or significant adverse effects on financial stability and the FDIC has received no qualified bid from an eligible non-prohibited company. It defines “qualified bid,” “well capitalized,” and “well managed” for these purposes.

This section requires the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, or the Federal Deposit Insurance Corporation, jointly with the FDIC, to submit a written report to the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs within 30 days after waiving a concentration limit for an acquisition of a bank in default or in danger of default or involving FDIC assistance under section 13 of the Federal Deposit Insurance Act. The report must include a justification for the waiver, a description of alternative bids considered, an explanation for rejecting alternatives, and recommendations to improve competition in future resolutions, and the agencies must post the report on their websites, subject to redactions for confidential information.

This section prohibits the Federal Deposit Insurance Corporation from considering any bid that would violate interstate banking restrictions in sections 18(c)(13) or 44(b)(2) of the Federal Deposit Insurance Act or acquisition limits in sections 3(d)(2), 4(i)(8), or 14 of the Bank Holding Company Act of 1956 when determining whether an exercise of authority is the least costly option for the Deposit Insurance Fund.

This section reduces the dollar amount specified for the Discretionary Surplus Fund under section 7(a)(3)(A) of the Federal Reserve Act by $2,000,000, effective September 1, 2036.