FDIC, OCC detail merger proposals at House hearing

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.