H.R. 6547 · On the floor · Finance and Financial Sector

Least Cost Exception Act

Sponsor: Mike Flood (R-NE)

What it does

• Allow the FDIC to waive its least-cost resolution requirement and use alternative methods when resolving failed banks if the alternative does not involve a global systemically important bank (G-SIB).
• Permit FDIC to select the least-costly non-G-SIB resolution method if the cost difference versus a G-SIB purchase and assumption falls within a maximum threshold established by rule.
• Require any person purchasing assets or assuming liabilities under an alternative resolution to pay an assessment to the FDIC Deposit Insurance Fund.
• Mandate the FDIC to issue a report on each use of the exception detailing the economic impact and cost differences between the chosen alternative and the least-cost option.

Official summary

Least Cost Exception Act This bill allows the Federal Deposit Insurance Corporation (FDIC) to waive the least-cost resolution requirement for failed insured depository institutions and use alternative methods of resolution, particularly alternatives that do not involve global systemically important banks (G-SIBs). Under current law, the FDIC must use the resolution method (such as a deposit payoff or the purchase and assumption of a bank’s assets and liabilities) that costs the FDIC's Deposit Insurance Fund the least to implement when an insured depository institution fails. The bill provides an exception to this requirement if the following criteria are met: the alternative method is the least costly of all alternatives that do not involve a G-SIB and that do not exceed the cost of liquidation; the difference in cost between the selected alternative and the cost of a resolution involving a purchase and assumption by a G-SIB is less than a maximum cost as established by rule; if the alternative involves a person purchasing assets or assuming liabilities, that person must pay an assessment to the FDIC; and it is determined that the risks to the fund are outweighed by the benefits…

Latest action

Feb 2, 2026: Placed on the Union Calendar, Calendar No. 405.

Committee: House Financial Services