Policy on bank mergers tops agenda for March 21 FDIC Board meeting

A long-awaited, proposed statement of policy on bank merger transactions is the top item on the agenda for next week’s open meeting of the Federal Deposit Insurance Corp. (FDIC) Board.

The proposed policy statement is expected to offer changes to the FDIC’s current Statement of Policy on Bank Merger Transactions. The action is driven in part by a 2021 executive order by President Joe Biden (D) that focuses on the impact of competition on the marketplace and, more specifically, seeks adoption of a plan for the revitalization of merger oversight under the Bank Merger Act and the Bank Holding Company Act (BHCA).

The Democratic members of the FDIC Board in late 2021 attempted to issue a request for information on the agency’s framework for addressing mergers, but that effort was thwarted amid disagreement with the outgoing chair, Jelena McWilliams, a Republican. Instead, the board, with Martin Gruenberg (D) since appointed chairman, issued an RFI in March 2022.

In its RFI, the FDIC said that “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),” it said. According to the letter, the RFI is intended to inform the agency’s understanding and any potential policymaking regarding bank mergers.

This January, the Office of the Comptroller of the Currency (OCC) issued its own proposed rule and policy statement on bank mergers that would (1) remove provisions related to expedited review; and (2) remove the OCC’s streamlined business combination application.

In its notice of proposed rulemaking, the national bank regulator stated that any business combination subject to a filing is a significant corporate transaction requiring OCC “decisioning,” which should not be deemed approved solely due to the passage of time. Regarding removal of the streamlined business combination application, it said the Interagency Bank Merger Act Application (IBMA) provides the appropriate basis for the OCC to review a business combination application.

Next week’s FDIC Board meeting, announced late Thursday, will be held at 10 a.m. March 21 and will be viewable by members of the public via webcast, the agency said.

March 21 FDIC Board meeting agenda

Notice of RFI (in Federal Register)