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ICBA told the FDIC that its bank merger review process requires significant revisions to be streamlined and equitable to community banks.
Flawed Merger Reviews: In a comment letter responding to the FDIC's proposed statement of policy on bank merger transactions, ICBA said the current merger review process is flawed, outdated, and fragmented. For instance, the process over-scrutinizes mergers between community banks while insufficiently analyzing mergers by too-big-to-fail institutions, ICBA said.
ICBA Recommendations: Among its recommendations to improve the FDIC’s proposal, ICBA said:
The banking agencies should take a unified approach to the Bank Merger Act, rather than each agency proposing its own sets of guidelines interpreting the same statutory factors.
The FDIC should adopt measures to support clarity and predictability, reduce existing burdens on community banks, and provide expedited approvals for small community bank mergers.
The FDIC should expand the scope of information to realistically reflect the bank’s “true” competition and permit a small bank de minimis exception.
Institutions with more than $100 billion in total consolidated assets should be subject to heightened scrutiny.
Recent OCC Comments: In a comment letter last week on the OCC’s proposal to amend Bank Merger Act rules, ICBA similarly called for unified, interagency bank merger guidelines, an interagency statement of policy, and the preservation of expedited reviews and streamlined applications.
Background: The FDIC in March proposed revisions to its statement of policy on bank mergers incorporating certain 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 and adding a new policy statement to clarify the agency’s review of applications under the Bank Merger Act.
Previous ICBA Comments: 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.