Banking and Finance Law Daily Wrap Up, BANK HOLDING COMPANIES—Senator Rounds introduces the ‘Merchant Banking Modernization Act’, (Sep 10, 2025)
Organizations Mentioned:Independent Community Bankers of America | South Dakota Bankers Association | U.S. Chamber of Commerce
The bill proposes to expand the holding period for merchant banking investments.
United States Senator Mike Rounds (R-S.D.), a member of the Senate Committee on Banking, Housing, and Urban Affairs, has introduced the “Merchant Banking Modernization Act.” The proposed legislation (S. 2663) would amend the Bank Holding Company Act of 1956 to “generally permit holding merchant banking investments of up to 15 years.”
Senator Rounds stated that access to capital “remains a barrier for entrepreneurs to start up and grow their business, especially in rural states like South Dakota.” Noting that the bill would expand the holding period for merchant banking investments “from 10 to 15 years,” he explained that the Merchant Banking Modernization Act “seeks to bridge the financial gap between small, often rurally-based, businesses that are not privy to the type of investments larger, more established, companies are able to access.”
Support for the bill. Several Republican Senators joined Rounds in supporting the proposed legislation, including Senate Banking Committee Chairman Tim Scott (R-S.C.), Thom Tillis (R-N.C.), Bill Hagerty (R-Tenn.), Kevin Cramer (R-N.D.), Steve Daines (R-Mont.), Markwayne Mullin (R-Okla.), Rick Scott (R-Fla.), Ted Cruz (R-Texas), and John Cornyn (R-Texas).
Moreover, according to a Sept. 9, 2025, press release from Sen. Rounds’ office, the U.S. Chamber of Commerce, Independent Community Bankers of America (ICBA), and South Dakota Bankers Association have voiced their support for the Merchant Banking Modernization Act. In its own press release commending Rounds for the proposed legislation, ICBA stated that the measure “will result in more capital flowing to small businesses that are hampered by the Federal Reserve’s 10-year limitation,” will provide “more flexibility to community banks in offering merchant banking services in support of their local economies,” and will facilitate “job creation and economic growth.”
Companies: Independent Community Bankers of America; South Dakota Bankers Association; U.S. Chamber of Commerce
LegislativeActivity: BankHolding BankingFinance BankingOperations CapitalBaselAccords CommunityDevelopment FederalReserveSystem FedTracker FinancialStability GCNNews SecuritiesDerivatives SouthDakotaNews