The FDIC board today unanimously voted to rescind a 2024 statement on bank mergers that expanded the factors taken under consideration when the agency reviews merger applications. They instead reinstated the policy that was in effect before the changes.
The FDIC board last year voted along party lines to implement the revised and expanded policy. Among the changes, the policy stated 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. Although the American Bankers Association has long advocated an updated analysis of competitive factors when regulators review merger applications, the association questioned the board’s decision at the time, saying the new statement did not provide the needed transparency, greater predictability and more timely merger approvals that banks need.
In March, the three sitting members of the current FDIC board proposed reinstating the former policy. The board adopted the change at its meeting today. In a financial institution letter, the FDIC said it expects to seek additional comments as it continues reviewing bank merger policy.
In a statement, American Bankers Association President and CEO Rob Nichols welcomed the board’s decision to rescind “last year’s flawed merger policy statement.”
“We hope this rescission, along with the OCC’s recent action on mergers, provides regulators an opportunity to ensure future decisions on bank merger applications are made promptly and are subject to clear standards,” he said. “We look forward to working with policymakers as they develop a revised merger framework that will strengthen our financial system and enable banks of all sizes and business models to flourish.”
