The FDIC board today approved a proposal to rescind a 2024 statement on bank mergers that expanded the factors taken under consideration when the agency reviews merger applications. If adopted, the proposal would reinstate on an interim basis the merger policy statement that was in effect before 2024 “as the agency conducts a broader reevaluation of its bank merger review process,” according to the FDIC.
The FDIC board last year voted 3-2 in favor of a final statement on bank merger policy, with the three Democratic members (former Chairman Martin Gruenberg, former Acting Comptroller Michael Hsu, and former CFPB Director Rohit Chopra) supporting it. Among the changes, the policy states that when reviewing a proposed merger’s competitive effects, the FDIC can consider concentrations on products and services beyond those based on deposits, such as the volume of small business or residential loan originations. Though the American Bankers Association supports consideration of broader competition, it was among the groups that questioned the board’s decision, saying the statement did not provide the needed transparency, greater predictability and more timely merger approvals that banks need.
Three Republicans now make up the FDIC board with two seats vacant. Acting FDIC Chairman Travis Hill — who voted against the statement as FDIC vice chairman — had previously said he wanted to replace the policy “to ensure that merger transactions that satisfy the Bank Merger Act are approved in a timely way.”
In a financial institution letter, the FDIC said it is inviting public comment on the proposal. The agency also plans to issue a future proposal to comprehensively revise its merger policy at a later date and will solicit further comments at that time.
