WASHINGTON, D.C. – Today, Congressman Roger Williams’ bill, the Merchant Banking Modernization Act, passed markup in the House Committee on Financial Services by a vote of 35-17. This legislation amends the Bank Holding Company Act of 1956 by extending the holding period for merchant banking investments from the Federal Reserve’s 10-year limit to a statutory minimum of 15 years, ensuring small businesses have the capital they need to grow and succeed.
“Small businesses are the backbone of the American economy, but many struggle to secure access to capital,” said Congressman Williams. “Current federal regulations force financial holding companies to exit their merchant banking investments too early, often before a project is complete. My bill gives businesses and their banking partners more time to unlock long-term investments, create jobs, and fuel economic growth in communities across America.”
Clickhereto view the bill.
Background:
- Under current law, financial holding companies may make merchant banking investments, but the Federal Reserve limits these investments to a 10-year holding period.
- Many small business projects, from planning and permitting to building and stabilizing, require more than a decade to complete. Forced early exits can disrupt growth and harm entrepreneurs.
- The Merchant Banking Modernization Act sets a statutory floor of 15 years for holding merchant banking investments, aligning financing timelines with real-world business needs.
- By modernizing outdated rules, the bill expands access to capital for Main Street businesses, supports community banks and financial holding companies, and strengthens job creation at the local level.
Supporting Organizations: American Bankers Association, Texas Bankers Association, Consumer Bankers Association, and Independent Community Bankers of America.
