Public comments on a bank regulator’s proposal to rescind its September 2024 bank merger policy statement, and reinstate its prior policy statement on an interim basis, are due April 10, according to a notice in the Federal Register Friday.
The Federal Deposit Insurance Corp. (FDIC) in early March said its board voted to rescind the statement and that it planned a broader reevaluation of the previous policy statement.
“The FDIC expects to request comment on all aspects of the regulatory framework governing the FDIC’s review of bank merger transactions in connection with a future proposal to comprehensively revise its merger policy,” the agency said in Friday’s Register notice.
Among the reasons given for the rescission were changes issued in September (and effective about a month later) that made the FDIC’s bank merger review process “less transparent and less predictable, leaving prospective applicants unclear about their prospects for approval and the resources and time they will need to allocate to the merger application process.”
The bank merger policy was created under the Bank Merger Act (BMA), the agency noted, which prohibits an insured depository institution (IDI) from engaging in a bank merger transaction except with the prior approval of the responsible federal banking agency. It said the FDIC acts on merger transactions involving IDIs in which the acquiring, assuming, or resulting institution is FDIC-supervised; and those that involve an IDI – federally chartered or not – and any non-insured entity.
The bank merger policy statement preceding the September revision was last updated in 2008. It does not, the agency noted, directly address an evaluation factor added to the BMA under the 2010 Dodd-Frank Act related to the risk to the stability of the United States banking or financial system, but it said it has articulated its approach to evaluating this factor in the context of merger transactions in its Applications Procedures Manual.
The Office of the Comptroller of the Currency (OCC) has its own, separate bank merger rule that applies to national banks and federal savings associations. This rule was also revised last September. That revision added an appendix with a policy statement on how the agency reviews merger requests under the BMA. It took effect Jan. 1.
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