The FDIC board proposed reforming the process by which it reviews merger transactions under the Bank Merger Act, including accounting for credit union member shares.
Credit Union Provision: The proposed rule is designed to clarify and reform the FDIC’s approach to evaluating competition in the context of a merger transaction, including by accounting for credit union shares in the competitive effects analysis.
Credit Union Commentary: The proposal says credit unions and community banks tend to provide similar products and services within a relevant geographic market. It notes that legal and regulatory restrictions on credit unions have eased over time, resulting in shrinking differences between banks and credit unions.
Additional Provisions: The proposal also would:
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Tailor merger filing requirements to reduce burden and processing times.
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Reform the FDIC’s approach to evaluating the statutory factors under the BMA.
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Establish a letter-filing process with “deemed approval” for “de minimis merger transactions.”
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Limit and clarify the FDIC’s discretion to remove a filing from expedited processing.
Input: Comments on the proposal are due within 60 days of publication in the Federal Register.
ICBA View: ICBA has repeatedly called on regulators to significantly revise its bank merger review process to streamline it for community banks while addressing competition from credit unions, including in:
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Comments to the National Credit Union Administration on its policy related to merging credit unions into banks.
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Comments to the FDIC on proposed updates to its statement of policy on bank mergers.
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Comments to the bank regulators under the latest Economic Growth and Regulatory Paperwork Reduction Act review.