Reforming the bank merger process and promoting parity between state banks and national banks are the aims of two proposals issued Thursday by the federal bank deposit insurance agency.
The Federal Deposit Insurance Corp. (FDIC) Board issued the proposals for 60-day comment periods.
According to the FDIC, the former proposal affects the review process for merger transactions under the Bank Merger Act (BMA). The agency said it broadly would impose discipline around timelines and “modernize the framework to better reflect today’s banking environment.”
More specifically, the agency said “notable reforms” include:
- Accounting for credit unions and centrally booked deposits in the competitive effects analysis;
- Establishing a letter filing process with “deemed approval” for “de minimis merger transactions;”
- Tailoring other merger filing requirements to reduce burden and processing times;
- Limiting and clarifying the FDIC’s discretion to remove a filing from expedited processing;
- Reforming the agency’s approach to evaluating the statutory factors under the BMA.
The latter proposal, the agency said, changes the effect of state laws on some out-of-state state banks. “Under the proposed rule, when host state laws do not apply to a national bank, those laws would similarly not apply to an out-of-state state bank providing services in the host state, regardless of whether the state bank has a branch in the host state,” the agency said. However, as under federal statute, the law of the state bank’s chartering state would still apply.
The proposal also would not affect the interest rates state banks are permitted to charge with respect to any of their loans, also as provided for under federal law, the FDIC said.
In other action, the FDIC Board rescinded its 2016 statement on development and communication of supervisory recommendations. The board noted that a final rule adopted Sept. 1 “ended the use of matters requiring board attention and supervisory recommendations for examination findings, and will instead issue matters requiring attention.”
However, the agency said, it “continues to emphasize a balanced approach to supervision that comprehensively assesses financial risk to institutions and the Deposit Insurance Fund and conformance with banking and banking-related laws and regulations.”
FDIC Board of Directors Approves Proposed Rule on State Bank Parity
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