The Federal Reserve is not tracking the information needed to improve the efficiency and timeliness of processing applications for community bank mergers and acquisitions, the Fed Office of Inspector General concluded in a new report.
The OIG evaluated the Fed’s approach to processing community bank applications for bank mergers, applications and changes in bank control. It noted that while the Fed’s Division of Supervision and Regulation, or S&R, implemented measures in 2022 to increase efficiency, “processing times for all application types, including merger and acquisition applications for community banking organizations, increased from 2021 to 2024.”
The OIG concluded that the division did not collect sufficient information to enable its management to improve the processing and efficiency of bank applications. Specifically, the FedEZFile system fails to capture key information, “which hinders management’s ability to pinpoint improvement opportunities,” according to the report. It also found that interviewees cited several internal practices, such as insufficient delegation practices, as contributing to processing delays.
The lack of data also affected the OIG’s ability to make recommendations for how to improve the application process.
“We believe that tracking and documenting key internal milestones in FedEZFile and enhancing S&R’s monitoring capabilities can help management identify root causes of delays and make informed decisions about banking application process changes,” the report states.
