Congress Voids Treasury Rule on Bank Mergers: What This Means for Financial Oversight

This joint resolution is short, sweet, and surgical: it zaps a specific rule proposed by the Office of the Comptroller of the Currency (OCC) regarding how the agency reviews applications when banks want to merge. Think of the OCC as the federal regulator that keeps an eye on national banks and federal savings associations. The rule they proposed was essentially an update to their playbook for handling big bank mergers under the Bank Merger Act. Congress is using its authority under the Congressional Review Act to formally disapprove this rule, which was published back in December 2023. The bottom line? That specific change to the merger review process is now null and void, and the OCC has to stick to the old rules.

The Merger Rule Reset Button

When Congress uses this procedure to disapprove an agency rule, it’s like hitting a reset button—but only on that one specific regulation. The OCC’s proposed update, which would have changed the criteria or process for scrutinizing bank mergers, is now off the table. For the average person, this sounds like inside baseball, but it matters because bank mergers affect everything from the interest rates on your mortgage to the fees at your local ATM. When a big bank buys a smaller one, it changes the competitive landscape. By rejecting the new rule, Congress is basically saying, "We prefer the existing process for reviewing these deals."

Back to the Old Playbook

Since the new rule is gone, the OCC must now revert to the previous standards and processes it used for reviewing bank merger applications. This means that banks planning to merge will be evaluated under the regulatory framework that existed before the December 2023 proposal. If you are a small business owner relying on a community bank, or a consumer concerned about consolidation in the banking sector, the status quo remains in place—at least for now. The groups that supported the OCC's proposed changes, whatever they were, now have to wait for a different regulatory attempt, while those who liked the existing rules get to keep them.

Why Congress Gets Involved

This move highlights the ongoing tension between Congress and federal agencies. Agencies like the OCC have the expertise to write detailed regulations, but Congress retains the power to veto them if they disagree with the policy direction. For the OCC, this is a procedural setback; they spent time and resources developing a rule, only to have it overturned. For us, it’s a reminder that even the most technical, jargon-filled rules governing giant financial institutions are ultimately subject to legislative oversight. It ensures that significant shifts in financial regulation—like changes to how bank mergers are approved—don't happen without a direct check from elected officials.