If the FDIC reopens its policies on bank mergers, it should consider competition from credit unions and other nonbank institutions that perform bank-like functions, FDIC Vice Chairman Travis Hill said.

Hill Remarks: Speaking at the Cato Institute, Hill also said regulators should address some of the underlying causes of consolidation, including the rising cost of compliance and the dramatic decline in de novo activity since the 2008 financial crisis.

ICBA Input: ICBA last week met with Hill to discuss the surge in credit union acquisitions of community banks. In a comment letter to the FDIC last year, ICBA laid out its plan for revising merger policies, including incorporating credit unions into the Herfindahl-Hirschman Index.

DOJ Outreach: In a comment letter this week on the Justice Department’s proposed merger guidelines, ICBA said the department should consider competition from credit unions and nonbanks when evaluating bank mergers. It previously called on DOJ to revise its policies on bank mergers to better address credit unions and other nonbank competitors.

Recent DOJ Remarks: Assistant Attorney General Jonathan Kanter earlier this year said the DOJ is working to update its bank merger review process to focus more on larger institutions. Responding to questions following his remarks, Kanter reportedly said credit unions would be accounted for in updated standards if they are relevant to the dynamics of competition of a particular transaction, and ICBA told Politico that the review is appropriate.