House Committee Advances Bills to Redefine Banking Rules and Ease IPO Pathways

A series of newly advanced bills in the U.S. House of Representatives signal a potential turning point in banking regulation and public market access, with proposals aimed at tailoring oversight based on risk and easing the way for companies—particularly emerging and tech-driven firms—to go public.

Late last week, the House Financial Services Committee approved several measures designed to modernize outdated frameworks and align regulations more closely with the operational realities of financial institutions and startups alike. If enacted, these bills could significantly influence how financial institutions are supervised and how fast-growing firms approach initial public offerings (IPOs).

Making IPOs More Accessible

One key piece of legislation, the Encouraging Public Offerings Act of 2025, proposes changes to the 1933 Securities Act, broadening companies’ ability to “test the waters” before formally submitting registration paperwork to the Securities and Exchange Commission (SEC). This would allow businesses—especially startups and FinTechs—to gauge investor interest before committing to an IPO process, improving market readiness and reducing premature filings.

Another measure, the Helping Startups Continue to Grow Act, would extend the eligibility period and revenue ceiling for companies classified as “emerging growth companies,” allowing more businesses to benefit from simplified disclosure requirements. The legislation raises the annual revenue threshold from $1 billion to $3 billion and extends the classification period from five to ten years after an IPO.

These reforms come as several tech firms prepare for public debuts and highlight growing momentum for more flexible capital market entry pathways tailored to the modern innovation economy.

Tailoring Banking Oversight

Beyond capital markets, regulatory reform is also being considered for the banking sector. The TAILOR Act of 2025 calls on federal banking regulators to match regulatory requirements to each financial institution’s size, business model, and risk profile. This approach aims to prevent a one-size-fits-all regulatory burden, especially for smaller or niche institutions that may not pose systemic risks.

The bill also considers downstream effects by requiring regulators to assess how new rules might impact third-party service providers—many of which play key roles in digital finance ecosystems.

Additionally, the Financial Institution Regulatory Tailoring Enhancement Act raises the asset threshold for banks subject to stricter capital requirements. Institutions with less than $50 billion in assets would be exempt from leverage and risk-based capital rules typically applied to larger players, effectively reducing compliance costs for mid-sized banks.

Speeding Up Merger Approvals

Another proposal, the Bank Failure Prevention Act, addresses the slow pace of bank merger reviews. It would require the Federal Reserve to act on applications within 91 days or have them automatically approved. It also restricts regulators to considering only information submitted by the applicant when determining whether an application record is complete, a move aimed at curbing delays caused by external feedback or bureaucratic bottlenecks.

Looking Ahead

As these bills head toward a full House vote, they reflect a broader effort to align financial oversight with a rapidly changing industry landscape. By streamlining regulatory burdens and modernizing outdated processes, lawmakers are positioning financial institutions and innovators to operate with greater agility—while still maintaining guardrails to manage risk. Whether these reforms will clear the Senate or face pushback remains to be seen, but they mark a significant step toward reshaping the future of financial regulation and access to capital.

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