Congress Seeks to Overturn Bank Merger Rule: Understanding S.J. Res. 13
On May 22, 2025, a piece of legislation known as S.J. Res. 13, was published, signaling a potential showdown between Congress and the Office of the Comptroller of the Currency (OCC) regarding the rules governing bank mergers. This resolution aims to disapprove a specific rule crafted by the OCC related to the review process under the Bank Merger Act. Let’s break down what this means and why it matters.
What is S.J. Res. 13?
S.J. Res. 13 stands for Senate Joint Resolution 13. It’s a specific type of resolution used in Congress to express opinions or make temporary laws. In this case, it’s designed to disapprove a rule issued by a government agency, the OCC.
The core of S.J. Res. 13 utilizes a specific mechanism called the Congressional Review Act (CRA). The CRA (chapter 8 of title 5, United States Code) allows Congress to review and potentially overturn certain agency regulations within a specific timeframe after they are finalized. If both houses of Congress pass a resolution of disapproval (like S.J. Res. 13) and the President signs it (or Congress overrides a presidential veto), the rule is effectively nullified.
What’s the Rule They Want to Overturn?
The resolution targets a rule created by the OCC concerning the “review of applications under the Bank Merger Act.” This means the OCC has likely updated or changed how it assesses and approves proposed mergers between banks.
- The Bank Merger Act: This law provides the framework for regulators to review and approve (or deny) bank mergers. The goal is to ensure that mergers don’t harm competition, threaten the stability of the financial system, or negatively impact consumers and communities.
- Why the OCC’s Rule Matters: The specific details of the OCC’s rule are crucial. It likely outlines the criteria, data, and processes the OCC uses to evaluate merger applications. Changes to these rules can have a significant impact on the types of mergers that are approved and the conditions placed on those mergers.
Why is Congress Disapproving the Rule?
Without knowing the specific details of the OCC’s rule, it’s impossible to pinpoint the exact reasons Congress might disapprove. However, here are some likely possibilities:
- Concerns about Competition: Congress might believe the OCC’s new rule makes it too easy for large banks to merge, leading to less competition and potentially higher prices for consumers.
- Financial Stability Concerns: Lawmakers might worry that the rule allows for mergers that increase systemic risk, making the financial system more vulnerable to shocks.
- Community Impact Concerns: The OCC’s rule could be seen as failing to adequately consider the potential negative impacts of mergers on local communities, such as job losses or reduced access to financial services.
- Lack of Transparency/Consultation: Congress may feel the OCC didn’t adequately consult with stakeholders or provide sufficient transparency in developing the new rule.
- Economic Philosophy: Different political views on the appropriate size and concentration of the banking sector might play a role. Some in Congress may favor stricter merger enforcement to prevent “too big to fail” institutions, while others may believe that mergers can create efficiencies and innovation.
What Happens Next?
For S.J. Res. 13 to become law, it must:
- Pass both the Senate and the House of Representatives: The resolution needs to secure a majority vote in both chambers of Congress.
- Be signed by the President: If the resolution passes both houses, it’s sent to the President for approval. The President can sign it into law, veto it, or allow it to become law without their signature by not acting on it within a certain timeframe.
- Overriding a Presidential Veto (If Necessary): If the President vetoes the resolution, Congress can override the veto with a two-thirds vote in both the Senate and the House.
Implications of S.J. Res. 13 Passing:
If S.J. Res. 13 is enacted, the OCC’s rule regarding bank merger applications will be nullified. This would mean:
- The OCC would need to revert to its previous rules or develop a new rule (subject to Congressional review).
- It would send a strong signal to the OCC (and other regulatory agencies) that Congress is paying close attention to their rulemaking and is willing to intervene if necessary.
- It could potentially slow down or halt pending bank mergers that were being considered under the new OCC rules.
Conclusion:
S.J. Res. 13 represents a significant effort by Congress to assert its oversight authority over the OCC and the rules governing bank mergers. It highlights the ongoing debate about the appropriate size and structure of the U.S. banking industry. The outcome of this resolution will have important implications for the future of bank mergers and the overall financial landscape. To fully understand the stakes, it is crucial to examine the specifics of the OCC’s rule that S.J. Res. 13 seeks to overturn.
The AI has delivered the news.
The following question was used to generate the response from Google Gemini:
At 2025-05-22 08:37, ‘S.J. Res. 13 (ENR) – Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Office of the Comptroller of the Currency of the Department of the Treasury relating to the review of applications under the Bank Merger Act.’ was published according to Congressional Bills. Please write a detailed article with related information in an easy-to-understand manner. Please answer in English.
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