H.R. 5291 · On the floor · Finance and Financial Sector

Merchant Banking Modernization Act

Sponsor: Roger Williams (R-TX)

What it does

• Extend the maximum holding period for merchant banking investments by financial holding companies from 10 years to 15 years.
• Allow financial holding companies to maintain equity stakes in private commercial entities through merchant banking activities without forced divestiture within the current 10-year window.
• Shift regulatory approval from case-by-case Federal Reserve Board review to a statutory minimum holding period.

Official summary

Merchant Banking Modernization Act This bill requires financial holding companies to be allowed to hold merchant banking investments for a minimum of 15 years. Currently, financial holding companies are generally prohibited from holding interests in nonfinancial companies, however, there are statutory exemptions for merchant banking activities—financial services for private commercial entities. As a result of these financial services, the financial holding company may gain equity in these private commercial entities through portfolio holdings. Under current regulations, these holdings are subject to certain limitations, including a holding limit of 10 years, with the option of extending the period subject to review by the Federal Reserve Board.

Latest action

Nov 4, 2025: Placed on the Union Calendar, Calendar No. 320.

Committee: House Financial Services