A request for information (RFI) on the Bank Merger Act – which covers policy on bank merger transactions, including those between an insured depository institution and a noninsured institution – was issued Friday by the federal bank deposit insurer.
An attempt in December to issue a similar RFI was blocked by then-chairman of the Federal Deposit Insurance Corp. (FDIC) Board Jelena McWilliams. An appointee of former President Donald Trump (R), she subsequently resigned later that month, reportedly in response to the effort by other board members – all Democratic appointees – to issue the RFI.
In a financial institution letter (FIL), the FDIC said the latest RFI seeks information and comments “regarding the application of the laws, practices, rules, regulations, guidance, and statements of policy (together, regulatory framework) that apply to merger transactions involving one or more insured depository institution, including the merger between an insured depository institution and a noninsured institution.” Comments will be due 60 days after publication in the Federal Register.
According to the letter (FIL 11-2022), “significant changes” over the past several decades in the banking industry and financial system necessitate a review of the regulatory framework. “The FDIC is interested in receiving comments regarding the effectiveness of the existing framework in meeting the requirements of section 18(c) of the Federal Deposit Insurance Act (known as the Bank Merger Act).” The letter asserts that the RFI is intended to inform the agency’s understanding and any potential policymaking in bank mergers.
In December’s action, a draft RFI first emerged through a joint statement of two of the three Democrats on the board, would said it would respond to a July 2021 executive order by President Joe Biden (D) on competition that calls for, among other things, a specific look at current practices and submission of a plan for the “revitalization of merger oversight” under the Bank Merger Act (BMA) and the Bank Holding Company Act (BHCA).
The statement from the two Democratic appointees – Martin Gruenberg (now acting FDIC chairman following McWilliams’ resignation) and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra – pronounced that the board had voted to release the RFI for public comment (a third Democratic appointee, Acting Comptroller of the Currency Michael Hsu, later issued a separate statement essentially concurring with the other two board members).
However, the FDIC also later that day issued a statement (attributed to no individual in particular) that there had not been a “legitimate” vote to issue the request. That FDIC statement, which was posted online and emailed to subscribers, is no longer linked on the agency’s website.
Further, during that day’s FDIC Board meeting, Chopra moved to address the issue, but McWilliams reportedly ruled that effort out of order.