Any bank creeping up on the $10 billion-asset threshold might want to think twice about making that next acquisition.

The House Financial Services Committee has already approved legislation that would put only banks with $10 billion of assets or more under the purview of a new consumer protection regulator, and it is considering a bill that would require all banks above the $10 billion mark to shoulder the cost of rescuing systemically important institutions should they fail.

How Congress arrived at the $10 billion figure for resolving big-bank failures is unclear, but, at mid-tier banks, the outrage was palpable. "If Goldman Sachs does something screwy, why should I have to pay?" Gerald H. Lipkin, the chairman and CEO at the $14.2 billion-asset Valley National Bancorp said to American Banker. "You're going to hit me on the head because some regulator didn't do his job?"

"I don't think we can solve this issue by drawing a line in the sand, but if we have to draw a line in the sand, I think it should be $100 billion, because that is where the risk-taking happened," said Dick Evans, the chairman and CEO at the $16 billion-asset Frost Bank in San Antonio.

Jeff Davis, an analyst at FTN Equity Capital Markets Corp., suggests that the size cutoff might even give banks in, say, the $8 billion or $9 billion range, pause about getting much bigger. "I think if it passes there will be less lending," he said. "It will certainly encourage any bank that doesn't have really large aspirations to stay put."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.