On May 20, federal merger policy took a sharp turn as the FDIC voted to rescind its 2024 merger guidelines, and the U.S. House passed a Congressional Review Act (CRA) resolution to repeal the OCC's 2024 merger rule.
The FDIC's now-rescinded guidelines emphasized heightened scrutiny of mergers involving banks with over $50 billion in assets, limited use of conditional approvals, and expectations for public input. With unanimous board approval, the FDIC reverted to its pre-2024 framework, pending a broader review of its merger oversight policies.
On the same day, the House passed S.J. Res. 13, a CRA resolution seeking to nullify the OCC's 2024 rule that had eliminated expedited merger review procedures and proposed a new policy framework for assessing potential supervisory or competitive concerns. The CRA resolution must still be passed by the Senate and signed by the President to take effect.
Key provisions in the FDIC and OCC's 2024 merger framework:
- Heightened scrutiny for large transactions. The rescinded policies required detailed analysis of financial stability risks and community impact for mergers resulting in banks over $50B or $100B in assets.
- Restrictions on conditional approvals. The 2024 FDIC policy stated that statutory deficiencies could not be resolved solely through conditions, prompting industry concerns about deal uncertainty.
- End of expedited reviews. The OCC's 2024 rule eliminated fast-track review pathways, increasing timelines for smaller and low-risk mergers.
- Expanded public input. Both agencies had encouraged greater use of public hearings and comment processes, particularly for mergers involving significant asset growth or community impact.
Putting It Into Practice: The rollback of the FDIC's 2024 merger guidelines and the potential repeal of OCC's 2024 merger rule signal a decisive shift in federal oversight of bank consolidation, particularly for community and mid-sized institutions. Additional reversals of agency rulemakings under the CRA framework are likely to follow (previously discussed here).
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