Federal banking regulators this week testified before Congress on agency proposals to update policies on bank mergers.
Hearing Focus: During the House Financial Services Subcommittee on Financial Institutions and Monetary Policy hearing, Chairman Andy Barr (R-Ky.) raised concerns about the impact of regulatory burdens on community bank mergers and acquisitions. He also decried FDIC and OCC sluggishness in authorizing mergers that meet agency standards.
Recent Proposals:
The FDIC in March proposed revisions to its statement of policy on bank merger transactions incorporating ICBA-advocated provisions, including applying statutory factors to mergers resulting in nonbanks, such as credit unions and industrial loan companies.
The OCC previously proposed changing OCC rules on business combinations involving national banks and federal savings associations and adding a new policy statement to clarify the agency’s review of applications under the Bank Merger Act.
Testimony: During the hearing, FDIC Deputy General Counsel James Anderson said greater attention to the financial stability risks that could arise from a merger involving a large bank is warranted. Acting Senior Deputy Comptroller Ted Dowd said the OCC’s proposed policy statement seeks to provide more information and clarity for applicants.
ICBA View: In a comment letter to the FDIC last year, ICBA laid out its plan for revising merger policies, including faster reviews of community bank mergers and incorporating credit unions into the Herfindahl-Hirschman Index. In separate 2023 and 2022 comment letters to the Justice Department, ICBA said the department should consider competition from credit unions and nonbanks when evaluating bank mergers.
