Under a new law signed by Mississippi Gov. Tate Reeves, only FDIC-insured banks can acquire or merge with Mississippi-chartered state banks. The law requires the state’s commissioner of banking and consumer finance to issue a cease-and-desist order against any transaction not compliant with this new requirement.
“A bank chartered by the State of Mississippi may, with the approval of the commissioner, sell or transfer all, or substantially all, of its assets, liabilities, and businesses only to another bank, savings bank, savings and loan association or other entity, in a transaction agreed upon, adopted and approved in accordance with Article 12, Chapter 4, Title 79, Mississippi Code of 1972, and provided that the buyer or transferee is a financial institution insured by the Federal Deposit Insurance Corporation,” the law states.
“The Mississippi Bankers Association thanks Gov. Tate Reeves, Lt. Gov. Delbert Hosemann and Speaker of the House Philip Gunn for supporting Mississippi’s banks by supporting this important bill,” said MBA President and CEO Gordon Fellows. “We were glad to see this legislation through the Mississippi Legislature by unanimous vote, and we appreciate the efforts of many bankers who worked to support the MBA’s efforts in passing this new law.”
The law comes as credit union acquisitions of community banks continue to pick up. Several other states—including Colorado and Iowa—have laws in place prohibiting or limiting nonbank acquisitions of state banks and their assets and liabilities.