The FDIC board today unanimously adopted a resolution to require that agency staff update the board on any pending bank merger and deposit insurance applications that have been outstanding for 270 days, or roughly nine months. The resolution was brought by Vice Chairman Travis Hill, who noted that the number of applications still under review after 270 days has steadily grown in recent years.
“A long application review process is costly for a variety of reasons,” Hill said. “In the case of mergers, it adds uncertainties for employees and customers, it makes post-merger integration more challenging and it can be dangerous if one of the merging entities is in a vulnerable condition.”
Under the resolution, once an application becomes pending for more than 270 days after receipt, it is automatically placed on the agenda of the next FDIC board meeting. Also, staff briefings on the application would be automatically placed on the agenda at subsequent board meetings every three months until a final decision is made.
In a statement, ABA President and CEO Rob Nichols expressed support for the intent behind the resolution. “Regarding merger and deposit insurance approvals, we agree with the board’s common-sense vote to ensure that proposed deals are not allowed to languish for more than nine months,” Nichols said. “Timely and fair consideration of these applications is not too much to ask of a federal agency. We do urge the FDIC to continue its practice of protecting banks’ confidentiality by not issuing detailed public statements on why merger applications are denied or withdrawn.”
