Bipartisan agreement emerges on bank resolution reform

Core Insights - Bipartisan bills aimed at limiting the acquisition of failed banks by the largest financial institutions have passed the House Financial Services Committee, signaling a collaborative effort to address issues highlighted by recent bank failures [2][6]. Legislative Developments - The bills must still pass the full House and Senate and receive presidential approval, facing a tight legislative schedule ahead of the midterm elections [2]. - One significant bill, authored by Rep. Mike Flood, R-Neb., proposes to waive the least-cost resolution requirement of the FDIC when such a requirement would lead to increased bank consolidation [4][6]. Key Provisions - The least-cost resolution requirement mandates the FDIC to select the bid for a failed bank that results in the least loss to the Deposit Insurance Fund, but the new bill allows for exceptions in cases where larger banks would benefit disproportionately [4][6]. - Rep. Maxine Waters, D-Calif., supports the reform but emphasizes the need for provisions to prevent large institutions from manipulating the bidding process [5]. Additional Measures - The committee also passed other bipartisan measures, including a bill requiring the FDIC and Office of the Comptroller of the Currency to study modified bids in the failed bank bidding process [5]. - Another bill aims to restrict the use of concentration limit exceptions, which were previously utilized in JPMorgan's bid for First Republic Bank [5].