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FDIC Proposes Revisions to Statement of Policy on Bank Mergers


The Federal Deposit Insurance Corp. (FDIC) is seeking public comment on a proposal that would “update, strengthen and clarify” its approach to evaluating bank mergers. 

The FDIC board of directors voted Thursday (March 21) to approve a Federal Register notice seeking comment on proposed revisions to the agency’s statement of policy (SOP) on bank mergers. The revisions will be open to public comment for 60 days after its publication in the Federal Register, the FDIC said in a Thursday press release

“Given the rapid pace of change and consolidation in the banking industry today, it is vital that the FDIC provide guidance on how it would apply the critical statutory factors under the Bank Merger Act relating to competition, financial resources, the convenience and needs of communities, financial stability and money laundering,” FDIC Chairman Martin J. Gruenberg said in the release. “We look forward to receiving thoughtful public comment on the proposal.”

The SOP was last amended in 2008, and the proposal would address legislative and other developments that have occurred since then, according to the release.

The proposed revisions include the establishment of the statutory factor regarding risk to the stability of the U.S. banking or financial system, the release said.

The revised SOP also describes the types of applications that are subject to FDIC approval, addresses statutory factors, highlights statutes that apply to interstate mergers, and spotlights statutes that apply to applications from non-banks or non-traditional banks, per the release.

“While historical performance provides insight into the evaluation of these factors, the Statement of Policy affirms that the evaluations are forward looking,” Gruenberg said in a statement released Thursday.

Acting Comptroller of the Currency Michael J. Hsu said Thursday that he supports the proposal and its publication in the Federal Register, adding that it aims to provide greater transparency around how the agency reviews applications under the Bank Merger Act.

“Bank merger applications exist along a spectrum — they are neither all good, nor all bad,” Hsu said in a statement. “By faithfully applying on a case-by-case basis the Bank Merger Act statutory factors, the diversity and dynamism of the U.S. banking system can be maintained and strengthened.”

The Office of the Comptroller of the Currency (OCC) introduced a proposal in January to update its own rules for business combinations for national banks and federal savings associations, connected to the Bank Mergers Act (BMA).

The OCC said at the time that it hopes to bring more transparency to its review of transactions under the BMA.