The U.S. House Financial Services Committee’s Financial Institutions Subcommittee convened a hearing chaired by Andy Barr to scrutinize the Federal Deposit Insurance Corporation’s (FDIC) resolution process for failed banks and to explore reform options aimed at supporting banks of all sizes. The agenda set out in Barr’s opening remarks included promoting competition in FDIC resolutions, including potential changes to the bidding process for failed-bank assets and liabilities to improve community banks’ ability to acquire all or part of a failing institution, and reassessing how the least-cost test may constrain participation. The hearing also focused on funding and deposit policy, with Barr highlighting perceived misalignment in the regulatory treatment of brokered, reciprocal and custodial deposits and pointing to hearing-related legislation intended to remove barriers to banks’ access to diverse deposit funding. A further theme was “right-sizing” the capital framework for small and mid-sized banks and reinforcing tailoring based on size, risk profile and complexity, alongside concerns raised about post Dodd-Frank capital and liquidity requirements and bank merger review practices. Witnesses were scheduled to provide views on the proposed reforms and on legislation referenced as attached to the hearing.
U.S. Financial Services Committee 2025-09-09
U.S. House Financial Services Committee holds hearing on FDIC failed bank resolutions and regulatory tailoring for smaller banks
The U.S. House Financial Services Committee’s Financial Institutions Subcommittee held a hearing to examine the FDIC's resolution process for failed banks and explore reform options. Key topics included promoting competition in FDIC resolutions, reassessing the least-cost test, and addressing regulatory treatment of deposit types. The hearing also discussed "right-sizing" the capital framework for small and mid-sized banks and concerns about post Dodd-Frank requirements.